NEAR Protocol Trading Bot: What to Test First
Before you point a trading bot at NEAR Protocol or any other coin that is trending right now, test four things first: real trading costs at today's spreads, a large enough sample of trades, how the strategy did on data it never saw, and how it behaves when the hype fades. A backtest that only looks good during a hot streak usually reflects the streak, not an edge. This guide shows how to run…
When testing a trading bot for NEAR Protocol or any trending coin, there are four essential factors to consider before implementing any strategy. Firstly, it is crucial to evaluate real trading costs, including spreads and fees, as they can significantly impact the bot's performance, especially during volatile periods. Secondly, ensure the backtest incorporates a substantial sample of trades; fewer than 30 trades should be treated as anecdotal, while 30-100 trades provide early signals but come with uncertainties.
More than 200 trades across different market conditions can start comparisons. Finally, test the bot's performance on data it has never seen before to determine its validity, and assess its behavior when the hype surrounding the trending coin subsides.
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