Senti-Bot in October 2024

Video Summary (Polish version)

What is a Senti-Bot?

Human emotions are terrible advisors, especially in the world of financial markets, where the stakes are high. The biggest funds know this – they harness the power of behavioral finance and track sentiment because they understand that emotions drive action.

Every 15 minutes, Senti-Bot constantly analyzes a huge amount of social media, guiding decisions based on investors’ raw emotions.

Our investment philosophy

During the development of the Senti-Bot tool, we followed the following investment principles:

• Senti-Bot’s main goal is to reduce losses, and generating profits is a secondary objective.
• Repeatability of results is key, so any improvement to the tool focuses on maximizing portfolio metrics such as Sharpe and Calmar ratios.
• Every decision in the Senti-Bot strategy must support long-term results.

Senti-Bot results

We want to share with you an analysis of Senti-Bot’s effectiveness in the cryptocurrency market, allowing you to compare it with other available tools. We present the gross results (in red), which do not include the cost of Binance exchange commissions, which allows you to accurately compare the effectiveness of our bot with other solutions. The total net gain since the beginning of the project is up to 278% (in blue)!

Senti-Bot’s main goal is to minimize losses first and only secondarily to generate profits. The chart below shows the maximum decrease in the value of the portfolio in October, the so-called “loss”. drawdown. Despite the declines, which reached 6.49% at the maximum point, the company managed to achieve a positive return.

Senti-Bot achieved its effectiveness, mainly by anticipatory exiting positions ahead of anticipated declines in Bitcoin’s price, discernible in emotions analyzed from social media. Evidence of the effectiveness of this approach was provided by the average values of transactions ending in profit and loss:

• The average profit per order is: +1,68%,
• The average loss per order is: -0,34%.

Bitcoin fell nearly 6% in September, and Senti-Bot saw a similar decline. However, the cryptocurrency rebounded significantly in the second half of the month, and the bot again successfully capitalized on the increases, ending the month with a gain of 8.9%. This was the fourth consecutive month in which the bot broke its previous record.

Senti-Bot performance indicators

We emphasize that the effectiveness of Senti-Bot should be considered over a period of more than one or two months.

Important elements of evaluating the effectiveness of our tool are measurements of such indicators as:

• Drawndown
• Profit Factor
• Sharpe ratio
• Calmar indicator

Drawdown

Drawdown is, simply put, the largest percentage reduction in the value of capital from its highest level. It is calculated by comparing the highest previous capital level with its current value.

The maximum drawdown (over the entire period) for the CryptoPulse BTCUSDT strategy was -19.11%, while in the Bitocin hodling it was already -29.6%.

Profit Factor

Another measure that deserves attention is the profit factor. The ratio is defined as the sum of all transactions with a profit divided by the sum of all transactions closed with a loss. A profit factor above 1.50 is considered good enough, and above 2.0 is considered ideal.

The Profit Factor for Senti-Bot was 1.39 at the end of September 2024. We can interpret this to mean that for every transaction the bot gained on average 39% more than it lost.

Sharpe ratio

In order to assess the ratio of the return achieved to the risk taken, we track two main indicators. The first is the Sharpe ratio, which measures risk-adjusted return (measured by average deviation). The higher the values of this indicator, the better the investment is considered. Investments for which the Sharpe Ratio is greater than 3.0 are considered among the best.

For Senti-Bot, the Sharpe ratio at the end of September was 4.01, which is significantly higher than for most mutual funds. This is significant because a higher Sharpe ratio means 4 times higher returns relative to risk, which continues to confirm the attractiveness of our investment strategy.

Calmar indicator

Calmar Ratio is the second main indicator of investment performance, which determines the ratio of the rate of return (calculated on an average annual basis) in relation to the maximum slippage. In general, the higher its value, the better. This is because it means by how many times the average annual cumulative rate of return exceeds the past slide. Values above 1 mean that the rate of return, was higher than the landslide.

At the end of September, Senti-Bot’s Calmar index was 5.26. Thanks to high profits, the bot has provided you with a result of more than 5 times its maximum drop in value.

Table – summary summary

We thank all our users for their trust and words of approval. We encourage you to follow Senti-Bot’s performance in the coming months!

SentiStocks team