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FAQ - Patache Digital’s Steady Strategies

What is the portfolio composition?

Portfolio composition is USDC + underlying strategy asset (ETH or BTC)

What is the goal of the Steady strategies?

The goal of the Steady strategies is to capture the upside of (ETH or BTC) price breakouts and manage the downside through trailing stops. The strategy takes a “risk first” approach where capital preservation is more important than capital growth.

How do the strategies work?

The Steady Strategies look for price breakouts and comprises two components: a work horse and a racehorse. The point of the workhorse is to nullify risk, capture a small profit/cover transaction cost and the point of the racehorse is to pursue a larger payoff opportunity. Please refer to the Steady Strategies Deep Dive for full details.

What time horizon should one have to allow the Steady strategies to be most effective?

The benefits of being in the Steady Strategies are expected to emerge over a medium to long term time horizon (6-12 months).

Who decides how to rebalance assets in strategy?

Trade management and portfolio management rules are built into the algorithm smart contract. Please refer to the Steady Strategies Deep Dive for details on how the strategies come up with trade recommendations.

How often is the portfolio rebalanced?

Expect 5-7 trades a month

Does the strategy help manage risk?

All trades come with a defined risk and capital allocation. Please refer to the Steady Strategies Deep Dive and Risk Management Discussion for full details. One risk mitigation component that’s important to highlight is that whenever trades are initiated by the strategy a corresponding price target and stop loss is also set. If the price target is met, a profit is taken, and what remains is assigned a trailing stop loss.

What is a stop loss and trailing stop loss?

A stop loss is an instruction to close out a trading position when the asset being traded reaches a set price. A trailing stop is a modification of a typical stop that can be set at a defined percentage or dollar amount away from an asset’s current market price.

Does the strategy work in all market conditions?

The trades that this strategy makes are long-only. Please refer to the Steady Strategies Deep Dive for full details.

What do the back testing statistics mean?

Back testing is not indicative of future performance, but it is helpful for comparing strategies and can give insights into the risk and return characteristics of the Steady Strategies (more on that in the Steady Strategies Deep Dive).

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