How does Long Short work?
Ira avatar
Written by Ira
Updated over a week ago

What does the above have to do with the new Long Short strategy? Long Short is an aggressive strategy aiming to capture alpha, or return, by trading ETH. Remaining calm through the market upticks and downturns will be essential in achieving success and not selling at a loss.

ETH, or Ether, has strong directional moves on both the long and short side, and Long Short is able to capture them with a target return of 40% to 50% per year in USDT. The strategy utilizes Futures on Binance and detects markers to formulate trade decisions.

Long Short serves as the 3rd strategy in the Stoic AI lineup following in Long-only and Fixed Income’s footsteps. Long Short leverages the high momentum and volatility of Ethereum to identify entry and exit points for daily long and short trades.

In layman’s terms, Long Short is a game-changing, automatic trading strategy that will knock the socks off any investor’s feet.

What are the Long Short statistics?

Parameters are quite strong with Long Short. Please see the below table for specifications:

Sharpe Ratio

2.64

Max Drawdown

7.96%

Calmar Ratio

7.66

Avg Daily Gains

0.17%

Avg Weekly Gains

1.17%

Avg Monthly Gains

5.01%

Profitable Days %

47.88%

What are the risks involved?

Like with all trading, there are risks associated with this strategy as past performance is no guarantee of future results. We cannot fully eliminate unprecedented events in the crypto market, though we actively manage these.

There are also liquidity risks, as the strategy trades actively and can incur larger than expected slippage in extremely volatile situations. Since Long Short is momentum based, there is a potential risk if the market unexpectedly moves sideways with little to no movement.

During market downturns, Long Short’s trading engine detects the bearish trend and starts short-selling ETH. To minimize the risk, we use stop losses to determine entry points.

What are the fees and the initial minimum investment?

A 5% management fee is charged on the initial $1000 minimum investment. The minimum investment can be larger but not smaller. Any additional deposits made at a later date would then be open to a 5% charge.

Annual Fee (subscription also available)

5%

Performance Fee

Minimum Deposit

$100

Lockup

NONE

Withdrawal

ANYTIME

What happens on the back end?

The Long Short crypto trading algorithm is always in a long or short trade based on proprietary trend calculations. Average hold period for a trade is 10-14 days, and position sizing is managed by our risk parameters. A stop is always in place for every open position, providing downside PNL protection.

Where is Long Short supported?

Any country or territory that allows access to Binance Futures is where Long Short is supported. Since the strategy operates inside of a Binance.com account with access to Futures, it is imperative to check if use is permitted or not where you live.

Are there any performance metrics to view?

Yes, please see the below table as it demonstrates the performance from January of 2021 through the middle of 2022:

Did this answer your question?