[HN Gopher] Launch HN: Coinrule (YC S21) - Automated Trading Mad...
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Launch HN: Coinrule (YC S21) - Automated Trading Made Easy
Hi HN Community, Today's beginner investors are stuck with zero-
interest rate accounts and passive investing. That might work for
some but if you are interested to explore more active investing
opportunities, you will soon find yourself out-traded by funds and
bots who control much of the market volume. We are Gabriele,
Zdenek and Oleg, founders of Coinrule https://coinrule.com/. We met
back in 2017 when we were building our previous startups and met at
Masschallenge, an accelerator program, in London. At that time all
three of us were experimenting with cryptocurrencies investing and
soon found that unless we used automation, we could not compete in
a 24/7 market. That's when we started to think of a solution, now
called Coinrule. Coinrule helps beginner investor build automated
rules for trading strategies, currently for cryptocurrencies but
later also for other assets - it runs on top of cryptocurrency
exchanges and uses an IFTTT-style interface. It's like Zapier for
investing. The Cryptocurrency world came along with a lot of
controversies, at the same time it gave many makers a possibility
to start deconstructing finance. Also for us, cryptocurrencies are
a good place to try and build a more equal way of managing your
savings. We are part of this market and believe in it. Our
ultimate goal is to make trading more accessible and to expand
Coinrule to equities, FX and later also to DeFi to give beginner
investors the opportunity to manage their funds in a market full of
speculators. When we first started investing, we approached it
from two beliefs: 1) you are unlikely to grow a portfolio without a
small percentage of it allocated to more active investments and 2)
tools in the market today are made by traders for advanced traders.
Many of our users have learned, grown and improved as traders over
the past year of using Coinrule and that's what we think really
matters. Of course we understand that the HN community has a lot
of cryptocurrency sceptics and we respect that. The cryptocurrency
market is still full of scams and bad actors. Whether you like it
or not though, it is now big enough that it is here to stay.
Despite the bad reputation, there are also many genuine and hard
working people trying to build technology that matters. We believe
that it is worthwhile to try make cryptocurrencies an easier place
to navigate for these 'normal' people. If one of our users does not
have the right mindset or could be vulnerable and should not be
trading, we tell them that. Coinrule today is registered with the
UK's Financial Conduct Authority, has transacted over $500m and is
run by an international and diverse team. Building a product, as
you all know, is hard so we'd appreciate comments and feedback.
We'd love to hear anything that helps make Coinrule better, simpler
and fairer. Please try us out at https://coinrule.com! Happy to
answer any questions and hear your feedback in the comments!
Author : ogiberstein
Score : 35 points
Date : 2021-07-15 11:12 UTC (11 hours ago)
| peterthehacker wrote:
| I stumbled upon a security issue with your site. I was reading
| this LP trying to understand what this product does and saw this
| quote
|
| > Military-grade encryption and security
|
| Then I checked your site's CSP policy on Mozilla Observatory:
|
| https://observatory.mozilla.org/analyze/coinrule.com
|
| coinrule.com scored 0/100 (F), because your site does not have
| the Content Security header implemented. I'd expect a software
| product focusing on security to have a strong CSP.
| ogiberstein wrote:
| Thanks for letting us know, I will look into it!
| kulkarnic wrote:
| > When we first started investing, we approached it from two
| beliefs: 1) you are unlikely to grow a portfolio without a small
| percentage of it allocated to more active investments
|
| I wish you all success, but this assumption goes against about a
| half-century of academic research. You might say "but it's
| crypto!" But the law of averages is brutal, and it is agnostic to
| whether we're in a crypto world or not -- if some fraction of
| market participants get an above-average return, mathematically,
| some must get a return that is below-average.
| lend000 wrote:
| Active investing is not the same as day trading. Most people do
| not realize that "passive investing" is basically zero sum
| (albeit harder to calculate because of being stretched over
| long periods where inflation becomes significant), just like
| short term trading. Value creation only comes from active
| investing (long term focused, but active and researched). The
| kind of active investing that Warren Buffett does is more
| similar to what VC's and private equity firms do than someone
| who buys and holds an index, spreading their money evenly
| across all big companies without any regard to which companies
| are deserving of investment.
| kulkarnic wrote:
| Passive investing isn't zero sum - it's positive sum. If you
| could buy a fraction of earnings from every business in the
| economy (i.e. both businesses that currently exist, and
| future businesses that are founded in the future), then you
| get a rate of return that is roughly the growth in GDP.
|
| Concentrated portfolios are also positive-sum, and have
| returns higher than passive investing if you are smart or
| lucky.
| lend000 wrote:
| Passive investment has been a good strategy for collecting
| wealth, but it adds no value to society. Instead of
| efficiently placing capital to generate new wealth, you are
| spreading just as much capital to companies that will fail
| or squander their current valuation as companies that will
| succeed and should have more capital. It's only more
| profitable than mutual funds because ETF's have lower fees
| due to special tax rules around rebalancing.
|
| Putting your money in the bank is probably a better
| contribution to the economy (because banks have trading
| desks dedicated to more efficiently allocating capital),
| although it is a terrible personal investment strategy in
| today's low interest, inflationary environment.
|
| I just want people who demonize active investing to
| understand that their passive investment strategies
| contribute less or equal value to society, contrary to
| popular belief.
| ogiberstein wrote:
| Thanks for the feedback. I am not sure if markets are a zero-
| sum game though? If the sector grows, the whole pie can become
| bigger, right?
| sadosystems wrote:
| (I think) His point is not that investing is a zero sum
| activity but that active trading basically is. For me to make
| money day trading someone needs to loose money. The total
| "growth of the pie" is a slow process that you capitalize on
| by buying and holding.
| ogiberstein wrote:
| Fair enough! We do have quite a few users also running
| medium and longer-term focused strategies such as
| accumulations on dips
| kulkarnic wrote:
| Yes, that is what I meant. Thank you for expressing it more
| clearly!
| freshmuse wrote:
| Hi Everyone, I am Gabriele, CEO and cofounder of Coinrule. Happy
| to answer any of your questions.
| mchakravarti7 wrote:
| Hi! This is very interesting - I had a question but more so on
| the business side. I don't know much about finance, but what
| made you decide on a fixed fee pricing model than a take rate
| model like a hedge fund.
| ogiberstein wrote:
| Good question - I'll jump in for Gab as its his mum's
| birthday today :)
|
| With fixed fee pricing we are seen by regulators as a
| Software provider rather than a trading platform. The other
| point is that user funds sit on the exchanges and we have no
| withdrawal rights for greater account safety, so it's easier
| for us to just charge a fixed fee.
| vineyardmike wrote:
| > With fixed fee pricing we are seen by regulators as a
| Software provider rather than a trading platform
|
| Is this a well established rule? I had a few startup ideas
| related to fintech, and this would be a very interesting
| change in the value proposition.
| ogiberstein wrote:
| Hm not sure how well established as a rule this is - we
| got this advice from a fintech-proficient lawyer though
| gigatexal wrote:
| What is the point of opening this up to individual speculators?
| Wouldn't it be better to launch a fund like an etf that ran the
| best or set of really good (historically backtested) ones and we
| lay people can just buy and sell shares of it?
| ogiberstein wrote:
| You can create your own 'bundles' of coins and rebalance them
| using Coinrule. Some of our template strategies have been
| backtested (see here for a few of them:
| https://help.coinrule.com/en/collections/2700051-template-
| ru...).
|
| That said, we are also going to add other asset classes in the
| future and this will allow users to get in and out of ETFs
| easily.
| guillegette wrote:
| Feature request: Allow to connect TradingView alarms to this. TV
| alarms allows for webhooks to be called. If you guys allow that
| to be a trigger for the rules, then you don't have to worry about
| adding indicators. TV has by far the best collection of
| indicators, strategies, etc, so why not just supporting the
| alerts?
|
| Alternatively, maybe somehow support TV indicators? Not sure if
| "pine" (I think is the name of the language) is open source.
| ogiberstein wrote:
| Great point! We are working on this integration this sprint and
| will have it on staging by end of day tomorrow. Hoping to
| deploy next week! :)
| jakearmitage wrote:
| I would never trust a service like this, but at the same time,
| I'm curious on how to setup the opposite of their motto: "compete
| with professional algorithmic traders and hedge funds. coding
| required!".
|
| Does Fidelity offer an API of some sort so that I can login with
| my normal credentials and buy/sell? I'm assuming the strategies
| being used here, like "Ride the Trend", are basically the same
| ones available here: https://github.com/enzoampil/fastquant
|
| So, given that the previous statements are true, do I just need
| some Yahoo! Finance API + FastQuant and then MyBank API to
| autotrade for myself? What else would be involved?
| molsongolden wrote:
| Some brokerage accounts do come with API access. People have
| used Interactive Brokers to build trading bots for a long time
| now and there is also https://alpaca.markets/ which is
| developer-focused.
| ogiberstein wrote:
| We are big fans of Alpaca, it's great! Will probably use it
| when we expand to stocks as well.
| ogiberstein wrote:
| Hi Jake - some of the traditional finance platforms (like IG)
| have APIs but not sure how high quality they are. You could
| probably hack something together if you are good enough with it
| though - keep in mind you still have to keep adjusting
| parameters, testing strategies on an ongoing basis etc etc.
| It's plenty work
| Grustaf wrote:
| Cool stuff! I started building something similar back in 2018 or
| so, we ran a crypto quant fund.
|
| We actually found some very good arbitrage opportunities using
| derivatives, that didn't even need automation, so we used that.
| But I figured it would be cool with a tool for people to make
| their own strategies.
| ogiberstein wrote:
| Thanks! :) Why did you guys stop?
| Grustaf wrote:
| In the beginning we were making 8-12% a month, just
| arbitraging derivatives so very low risk (except platform
| risk etc). But after a few months it started shrinking, and
| shrank down to 2-3%. Still very good for a traditional fund
| when annualised, but we only managed a few million from
| friends and family so it didn't really make sense for us
| financially any more.
| rvz wrote:
| How does it compare to Mudrex? [0] Also congratulations on being
| registered with the FCA and on your recent funding round.
|
| Also:
|
| > Of course we understand that the HN community has a lot of
| cryptocurrency sceptics and we respect that. The cryptocurrency
| market is still full of scams and bad actors. Whether you like it
| or not though, it is now big enough that it is here to stay.
|
| Exactly. Although the cryptocurrency market is still a wild west,
| the direction it is going is more regulation. For the sceptics,
| it is going to be very hard for them to ignore and I'm sorry,
| cryptocurrencies are here to stay. Like it or not.
|
| > If one of our users does not have the right mindset or could be
| vulnerable and should not be trading, we tell them that.
|
| That also goes for trading forex or stocks and using complex
| instruments like CFDs.
|
| [0] https://mudrex.com/
| ogiberstein wrote:
| Thanks!
|
| Re Mudrex, they are more of a strategies marketplace nowadays
| and we want to allow people to build their own 'rules'. We're a
| bit more like Zapier for trading, they are a bit more of an
| investments marketplace.
| freshmuse wrote:
| Hi Rvz, also one note to be extremely precise and informative:
| we are in FCA Temporary Crypto Asset Registration list as the
| framework in stil being finalises by the financial authority,
| and even if we don't a license to operate on the market we are
| anyway in the process of getting a full license to be able to
| expand the product offering in the future.
| cwkoss wrote:
| Is there a mechanism for back-testing strategies?
|
| If so, do you/how do you correct for slippage?
| ogiberstein wrote:
| We currently test rules manually and post results here:
| https://help.coinrule.com/en/collections/2700051-template-ru...
| and also in our community on telegram. The automated
| backtesting is coming later this year - correctly capturing for
| slippage is tough; we will be using historical order book data
| provided by Kaiko to make this as realistic as possible though
| worik wrote:
| People!! Stay away from this!!!
|
| I am unsure about the sincerity of the authors of this software
| but in the general case the purpose of these systems is to bring
| dumb money into markets. Efficient markets are impossible to make
| money (risk adjusted positive returns) out of by active investing
| by definition.
|
| Dumb money is not efficient and lets the smart money (people who
| dedicate their lives to this) make money.
|
| Do not be the dumb money!!
|
| If you want to make money work on your skills and get a job.
| vntok wrote:
| All of this is of course patently false. Be aware worik and
| others will try to keep you from joining markets under dubious
| pretenses like protecting you or caring about your individual
| financial sanity. Don't listen to anh of them. Don't gamble
| more than you can afford to lose and you shall be fine.
| worik wrote:
| Stay out of those markets.
|
| Here is a thought: What paid for all those shiny towers in
| Wall Street? Transaction costs from people "...joining
| markets".
|
| Have you heard the joke about the customer's yacht?
| redorb wrote:
| Lots of those shiny towers were built by wide bid/ask
| spreads.. now a days liquid (good markets trade)
| proportional to stock price to basically pennies.
|
| I do agree I wouldn't join an automated trading platform
| without a high level math degree and market understanding
| though.
| bpodgursky wrote:
| This is the best NIMBY take I've read yet!
|
| "New construction is bad because it's all financed by fraud
| and theft from the proletariat!"
| ogiberstein wrote:
| I would argue that the efficient market hypothesis is
| problematic at best and I also disagree with the
| characterization of our users as 'dumb money'. We are in fact
| quite lucky to have some very smart users with us. There are
| many ways you can use Coinrule, not all of them must be
| entirely short-term oriented!
|
| That said, it's absolutely your good right to disagree with our
| value proposition.
| worik wrote:
| "I would argue that the efficient market hypothesis is
| problematic "
|
| It is well established by research. It is has a good
| theoretical foundation. It is problematic for this business,
| true.
| colesantiago wrote:
| > If you want to make money work on your skills and get a job.
|
| OK, fine. During the pandemic, I picked up and studied trading,
| and made more money doing that than my actual job (assistant
| teacher at a university).
|
| I know the next step I'm going to take.
| cwkoss wrote:
| Everyone in the market made money last year. Did you at least
| outperform the S&P?
|
| S&P gained 16.26% in 2020, roughly 3x average annual gains.
| yumraj wrote:
| Everyone makes money in a rising market.
| [deleted]
| stove wrote:
| I was intrigued by the "Test Rule Performance on Historical Data"
| feature on the home page. I thought signing up would let me play
| with the performance of your sample rules but I can't seem to
| figure that out. Is that possible?
|
| Also, that home page block could be more informative. It shows me
| a dollar value but not what asset it was actually applied to.
| ogiberstein wrote:
| Thanks for the feedback - yes we need to improve that!
|
| We currently test rules manually and post results here:
| https://help.coinrule.com/en/collections/2700051-template-ru...
| and also in our community on telegram. The automated
| backtesting is coming later this year
| culopatin wrote:
| Do you need to be a genius to do your taxes as an individual
| after using this tool?
| ogiberstein wrote:
| Hah good point! I think something like https://tokentax.co/ can
| still help you do it quite easily because you can export all
| the transactions from the exchange.
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