Disclaimer: The information from this article and analysis is for informational purposes only. It is not intended to be an investment or financial advice. Seek a duly licensed professional for investment advice.
Our goal for this account is to find a smart passive income system with our crypto trading platform. After one month testing it (real money invested) with some of the available providers that you can find inside Zignaly, we have ended up the month with a nice 6.04% profit.
What is passive income?
Quoting the Wikipedia explanation:
Passive income is income resulting from cash flow received on a regular basis, requiring minimal to no effort by the recipient to maintain it.
For us the part of minimal to no effort is very important. For two reasons:
- We don’t have time for crypto-trading (most of our trades are for testing features, or problem-solving).
- We want to create a crypto trading platform where a user is able to make profits without the need of being an expert crypto-trader or having to spend days learning and testing.
If you check the following picture, you will find a couple of exciting things:
We see the first exciting data point on days Dec 27th and Jan 10th, two significant decreases in our balance, first 2.15% and then 1.57. Even though the first decline was large, the second decline was much worse. Bitcoin price, during this time, decreased by more than 10%, and all trades were affected. As you can see in the balance screenshot, many positions were closed by a stop loss and the ones that weren't, fell so much that some of them are there yet.
We found this interesting because the system recovered by itself and ended the month cycle with profits :)
The second exciting data point happened Dec 9th. There you can see how our USDC amount increased $20.17. That day we decided to convert our profit so far, $20.17, and reserve it. This amount won’t be using for trading anymore, from that moment we only had available for crypto trading whatever amount appear in the column Total ฿ - Total Ⓢ.
And even when not re-investing our profit, the month was profitable. We are running a rather conservative approach with this account, which is why we chose to reserve this portion of our profit. At the end of the cycle, you can see that the total we had reserved was $41.86.
We have downloaded the CSV file from the closed positions view:
Then, we have analyzed how these positions have performed. This analysis gives us some insight to tune a little bit our settings (however, parameters are based on past data, these don’t guarantee anything for the future, but still, we'll try) and increase our passive income a little bit more.
Total Positions: 1342
We used two providers that work with scalping strategies; community feedback has been very positive about these two providers, so we decided to give them a try. By using a scalping strategy, they open many positions with the goal of securing many small fprofits in very short time periods.
Total wins: 1281
This number isn’t useful, but it looks terrific :) 95.45% wins.
Total Losses: 61
Less than 5% were failed. However because we had a large stop loss when they failed, the loss was significant.
BTC Profit: 0.01454990
This profit can be different than the balance info because the figure depended on the value of the coins when they were converted and also because it doesn’t count the non-closed positions. These profits have already subtracted the exchange’s fee, or represent the net profit.
BTC Total Fees: 0.00587748
Looking into this info, we realized that our last positions weren’t using BNB to pay the exchange’s commission, which means we were spending more :( The commission is a significative number, so we can’t leave this happen again. Also, we need to find ways to reduce it. We have seen that with a high monthly volume of trading plus a higher BNB balance, we could decrease it a little bit.
Longer closing time from wins: 16 days
The position that took longer to close, and still was profitable, took 16 days. Very fall away from the average.
Average closing time from wins: 15 hours
These providers send signals aiming to get closed very quickly, and the average closing time probe it, 15 hours. We could even consider using the Time Based Autoclose option if we find many missing signals because we don’t have enough balance.
Lower fall from wins: -15.99%
The win that most fell, made by -15.99% and still was profitable, but this is not the rule as you can see below.
Average Lower fall from wins: -2.17%
This data is super exciting, we don’t need to risk so much, because all of them are around -2.17%, let’s see how far our wins fell:
- Wins that fell less than 1%: 468
- Wins that fell less than 2%: 765
- Wins that fell less than 3%: 967
- Wins that fell less than 5%: 1158
- Wins that fell less than 8%: 1236
- Wins that fell less than 10%: 1254
- Wins that fell less than 16%: 1279
Total wins with DCA: 263
The last thing that we have analyzed is DCA effectiveness. We had our doubts about it, because when your DCAs have been triggered and still the position has been closed by stop loss, that means that the percentage lost is way below your original buying price, and what it’s worse, the position size of these positions can be X times the one from your wins. So you would need a lot of wins to compensate a stop loss with DCA triggered. But as we can see here, we had 263 wins where the DCA was triggered. The DCA trigger action makes our wins bigger because the position size increase, so even when we are winning just a 1%, it's a 1% of X times our original position size. Also, without this option, these 263 positions could not have been profitable.
Analysis per provider
Finally, we are going to show this same numbers per provider.
CQS Scalping Free
Here, you can find more information about CQS Scalping Free.
- Total positions: 539
- Total wins: 521
- Total Losses: 18
- Wins Percentage: 96.66%
- BTC Profit: 0.00821005
- BTC Total Fees: 0.00259959
- Longer closing time from wins: 383 hours
- Average closing time from wins: 19 hours
- Lower fall from wins: -15.99%
- Average Lower fall from wins: -2.13%
- Wins that fell less than 1%: 184
- Wins that fell less than 2%: 309
- Wins that fell less than 3%: 402
- Wins that fell less than 5%: 474
- Wins that fell less than 8%: 506
- Wins that fell less than 10%: 511
- Wins that fell less than 16%: 520
- Total wins with DCA: 153
For more information about Entrix Signals, click on the link.
- Total positions: 803
- Total wins: 760
- Total Losses: 43
- Wins Percentage: 94.65%
- BTC Profit: 0.00633985
- BTC Total Fees: 0.00327789
- Longer closing time from wins: 333 hours
- Average closing time from wins: 13 hours
- Lower fall from wins: -13.57%
- Average Lower fall from wins: -2.19%
- Wins that fell less than 1%: 284
- Wins that fell less than 2%: 456
- Wins that fell less than 3%: 565
- Wins that fell less than 5%: 684
- Wins that fell less than 8%: 730
- Wins that fell less than 10%: 743
- Wins that fell less than 16%: 759
- Total wins with DCA: 110
Both of them have performed amazing and have been profitable; however, CQS Scalping Free looks a little bit ahead, with the configuration that we used.
About our settings, we have started using the providers’ recommendations, but with a stop loss, because we prefer to limit our risk.
With the info from this analysis we are going to tune it a little bit, mainly our stop loss.
We also have to check our position size, because we usually have around 20% of our available balance idle.
Besides positions from previous analysis, we had several ones open, most of them on negative:
The balance value, take into consideration the amount invested on them and converted to BTC at that day price.
Looking at them, we are going to close several ones.
How to make passive income
We know that just one month doesn’t guarantee anything, but being profitable at the first try has been amazing. We haven’t done anything special, just chose a couple of providers that people were talking about, put some cryptocurrencies, and leave Zignaly to do its job.
What do you think about our conclusions? Are you missing some analysis that we haven’t done? We love to hear your thoughts on this.