What is the best strategy?

This is typically the first question asked by many new users who have never engaged in algo trading (or even manual trading). Unfortunately, no single strategy can be regarded to be the best in an objective way. Each strategy has its own pros and cons, and the results vary according to the exchange, the stake currency, and the market type (spot or futures).

Furthermore, there is no consensus on what defines the “best” strategy. An ideal “best” strategy would involve a high number of trades, a high average profit percentage, a high win rate percentage, low drawdown, and consistent trading regardless of market conditions. However, such a flawless strategy does not exist publicly. Instead, you will need to make compromises based on your specific trading and risk management preferences. In my experience, it is possible to prioritize two of these desirable elements in your strategy. Choose the combination that aligns with your goals.

I strongly advise you to dedicate significant effort to finding the “best” strategy, as it involves your own hard-earned money. It is not mine, nor does it belong to strangers you encounter onlineā€”it is yours. Numerous strategies can be found on GitHub repositories and the Freqtrade Discord server. Backtest them rigorously, identify the ones that yield favorable results, and conduct extended dry runs to observe real-time performance and compare it to the backtest outcomes. If there are significant differences between the dry run results and the backtest results, it could indicate that the strategy has artificially optimized backtest performance.

You should only start live trading with a small quantity of money if you are confident with your strategy (check the minimum stake amount allowed by your preferred exchange as they vary). It is important to remember that the past does not always indicate the future, despite what some people may believe. Always control the risk.

For long-term success, it is also important to regularly evaluate and adjust your strategy. What worked in the past may no longer be successful in the present, particularly in the erratic crypto market. Continue experimenting with various concepts and methods to see what can help you refine your strategy.

Keep in mind that success involves commitment, ongoing learning, and adaptation. It’s not a straightforward or short trip. Be persistent, patient, and open to adjusting your strategy as you gain knowledge of the market and experience. Keep an open mind, read a lot, and experiment with various approaches to determine what suits you the best. You can gradually create and improve your trading strategy through this constant learning and experimentation process.

Few resources to help you on your journey

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