It is an improved version of the averaging investment methodology. Protects the invested capital and withdraws the profits when certain profit levels reached. Withdraw them when the capital is at risk.
In technical jargon, investments are protected by a trailing stop-loss where the activation level does not slip beyond the buy level of the investment.
Profits are protected at the profit levels by a trailing stop-loss that is activated in the future.
In the event of a falling market rate the entire investment is not closed, only the profit withdrawn first. Later, if the market rate falls further and the capital loses the level which originally set, the capital also withdrawn.
The capital protection and profits managed independently on the Binance exchange. Only when action required the offer will be done by the system.
Capital protection is implemented by the Profit Manager with a special trailing stop-loss offer. Once the capital protection reaches the current price level at the start of the investment, the activation value of the trailing stop-loss sale will no longer slide.
Let's see how the trailing stop-loss works through an example:
We would like to launch an investment and buy Bitcoins on a case-by-case basis for 1 BTC at an exchange rate of 10,000 USD. We want to protect the investment, so we set a 5% capital protection value. If the exchange rate drops down to 9,500 USD, the system will automatically sell the BTC to stable coin.
However, suppose that the exchange rate starts to rise before reaching the 9,500 USD price level or immediately after the investment and reaches 10,500 USD price level.
The activation level of the sliding stop-loss move upwards together with the exchange rate and rises to 10,500 USD x 0.95 = 9,975 USD.
If the market rate would reach 10,527 USD, the capital protection value stops sliding from there, since at this rate the capital protection would slide up to 10,527 USD x 0.95 ~ 10,000 USD, which already guarantees the protection of the entire capital.
The Profit Manager allows you to activate a stop-loss order in the future, i.e. when the value of the investment reaches the target price, the system starts to track the price with the risk level set.
If the uptrend breaks and the market rate falls, the system will automatically sell all cryptocurrencies where profit was made.
Example: We would like to buy Bitcoin for 1,000 USD at a price rate of 10,000 USD. Set an expected profit level of 20% and we only risk 10% of the profit, so if the price rise reaches 12,000 USD, the system will automatically activate the profit protection.
As we are willing to risk 10% of the achieved profit because the exchange rate might continue to rise, the system starts to track the exchange rate. If the market rate falls from the 12,000 USD level to 11,800 USD, the profit will be withdrawn.
Suppose we are lucky and the market rate rises to 12,500 USD. In case, the system will track the market rate rise from a distance of 200 USD and when the momentum breaks and the market rate falls back to 12,300 USD, 230 USD Bitcoin will be sold.
The system will also protect the investment after the profit realised, i.e. it will withdraw the capital at the percentage level we specify below the profit take profit level.
Example: We set a 10% capital protection, therefore if the market rate drops 10% from 12,300 USD (take profit) to 11,070 USD, the system will automatically sell the Bitcoin investment.
Activate both capital protection and expected profit level. The level of capital protection will be automatically adjusted after the profit withdrawn, thereby once the profit realised, the capital protected.
Now, through the previous examples, we set a 5% (trailing) capital protection and a 10% profit (now without profit risk for simplicity), and the market rate still starts at 10,000 USD.
When the market rate rises (up to 10,527 USD), the capital protection level slides at the point where the capital protection reaches its maximum (i.e. 10,000 USD, which was our starting rate).
Even if the market rate rises further, the capital protection remains at 10,000 USD, it means from this point the full capital protection ensured.
The first profit exception occurs at the level of 11,000 USD, where the system automatically recalculates and sets the new capital protection and profit levels, according to the parameters previously set. Thus, the new capital protection will be the price level of 11,000 USD x 0.95 = 10,450 USD, while the next profit level will be 10,000 USD x 1.1 = 11,000 USD.
Mainly, the capital protection only slides with the market rate until the selling price level of the capital protection reaches the initial price level (10,000USD). Thereafter, the capital protection will jump by 5% below the realised price level for each profit realisation, but since the capital protection is already secured, it will not slide further from there, even if the market rate rises further.
The invested capital will be redeemed into the specified cryptocurrency (USDT, BUSD or even BTC), whenever the capital is at risk and the capital protection order activated.
Additionally, capital can also be released when if we closes a portfolio manually.
In case the system sells the cryptocurrencies concerned at the current exchange rate and cancel any further regular purchase orders.