Absolutno v0.7.4 brings support for OKX signal bot along with some bug fixes.
Release notes:
– Added support for controlling OKX signal bots.
– Fixed: debug mode label was showing the wrong volume while only the BO was filled
– Fixed: Profit was wrongly calculated from initial capital instead of total volume from orders (BO + all SO volume)
Example setup
Let’s assume we have Absolutno configured using the following orders:
- BO = 1000 USDT
- SO = 5000 USDT
- Volume scale = 2
- 3 safety orders
- Total funds spot needed = 36K
This means that the order volume is spread using the following percentages:
- BO = 2.78%
- SO1 = 13.89%
- SO2 = 27.78%
- SO3 = 55.56%
This totals 100% of the allocation in the backtest.
If the bot runs with 1x then there wouldn’t be any problem in regards to liquidation no matter how deep the max drawdown ends up being.
Let’s assume now that we wanted to run the same bot but with 5K investment on an OKX signal bot and we wanted to find a use of leverage that is efficient while being relatively safe based on the past performance seen in the backtest (assuming past performance repeats which probable won’t! )
Let’s assume that we identified from the backtests that the individual max drawdown for each order was 48%, 41.8%, 33.16% and 18% (as shown in the table below). That gives us a max drawdown of around 3.9K when using 5x.
If the bot is funded with less than this amount of margin it will most likely get liquidated causing a full loss.
We need to find a good split between the margin used to fund the 4 orders vs the margin used as collateral to be able to fully tolerate the max drawdown (and maybe a bit more if you don’t want to be running short).
In the example below we can see that when we use 60% of margin for orders leaving 40% free while using 5x leverage we manage to increase the profits 3 times while always leaving around 1K margin unused in the account based on past performance.
The 0.05% spot daily profits came from the daily PNL from the backtests and the 0.149% is based on the total margin used for orders post leverage divided by the total margin given to the bot.
0.05% per day on (3K margin x5 = 15K) / total margin 5K = 0.15% pd
Min contract size
Most exchanges offering futures perpetuals inform traders about what’s their minimum contract size. For OKX BTCUSDT.P contract this is 0.01 BTC and for BTCUSDC.P is 0.0001 BTC unfortunately USDC is not available for the signal bot at the time I’m writing this. Currently 0.01 BTC is around 275 USD and it obviously can change dramatically depending on the price of BTC.
You must consider that the exchange will skip a signal attempting to open any deal for less than 1 contract = 0.01 BTC and it won’t fractions of 0.01 BTC which is equivalent to 1 contract.
Because of this this bot has a hidden risk: the SO size is 1.66% of investment which based on the total 5K margin assigned to the bot means around $83 margin which at 5X means a position of $416 and as of today this is 1.51 contracts. The bot won’t open 1.51 contracts, as far as I understand it will average down to 1 contract. The first risk is that BTC price goes high enough so that $416 is less than 1 contract in which case the bot will fail opening the base order. The signal most likely will be skipped. The same logic applies to safety orders if the sizes were too small too.
The best way to prevent the problem is to run the bot with enough funds so that no order gets dangerously close to less than one contract whichever coin you are using.
In practice the higher BTC goes the more margin it requires.
Absolutno OKX signal bot payload information
At the time of writing this article Absolutno 0.7.4 uses “percentage of investment” method to determine orders sizes.
Absolutno follows these steps to calculate the % sizes:
- it checks the total amount from all orders and translates them each to percentages. For example if BO = 100 SO1 200 SO2 300 = TOTAL 600 this means 16.6%, 33.3%. and 50%
- it uses the OKX parameter “margin % unused” and deducts that amount from the 100% of orders. If 40% is used this means the orders should only use 60%. This translates to 60% x 16.6%, 60% x 33.3% and 60% x 50%
- On each alert Absolutno will send these values helping you to leave free collateral aside.
