Defensive
Article on the defensive approach for PinoAPI.
Why pick Defensive?
Defensive is all about protecting your capital, keeping your gains, and gradually growing your wealth. It is a popular choice for users looking to create passive income, users with lifestyles that don't allow for many hours of screen time, or simply users who are not comfortable taking risks every day.
The setup:
High timeframe analysis (1D, 1W and Monthly).
Instruments with good fundamentals and volume.
Idle with risk presets Low or Medium.
Did you know? When combined with a low-risk preset, idle makes liquidation theoretically impossible.
The goal:
Our goal for this setup is to run in a passive way that requires little to no manual interaction over a longer period of time.
The budget:
For this example setup we will be running a balance of $25.000.
Expectations:
When using Idle, we should manage our expectations in a way that does not expect high returns, as time will be our biggest obstacle along the way. After all, we are trading in a defensive way, and our main goal is to protect our capital.
Outcome:
We managed to run the setup for eight months in a row without any manual interaction, and on average, we realized a return of 3.5% per month, with a total of gained interest of +$7,919* annually (+$12,776*).
Scenarios:
In the HODL Zone, the market may take longer to return to the Trading Zone, resulting in lower returns or potentially even losses. Traders should be patient and avoid making rash decisions, but they may also need to adjust their strategy if the HODL Zone persists for an extended period.
Changes in market conditions or fundamentals may render the analysis invalid, making it difficult to continue using the same instruments and presets. Traders may need to re-analyze the market and make adjustments to their strategy to adapt to the new conditions.
Uncertainty in the market may lead to increased risk and potential losses. Traders should minimize their risk by exiting their positions and reassessing the situation. They can always re-enter the market once the uncertainty has subsided.
Market volatility increases beyond what the defensive strategy is capable of handling. In such cases, the preset risk level may not be sufficient, and the trader may need to adjust the risk presets or exit the position altogether.
Conclusion
Overall, the defensive approach aims to minimize risk and protect capital, but market conditions can change, and traders must be prepared to adjust their strategy accordingly. By monitoring the market and adjusting their risk management plan, traders can use the defensive approach to gradually grow their net worth in a way that requires little to no manual interaction and reduces the stress of participating in the market.
*Before fees
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