What The Five Star System On Covesting Means
The Covesting copy trading module is one of the most interesting innovations in the cryptocurrency arena over the last several years.
13:35 14 June 2021
It has thrived since its inception and is scaling across the trading community quickly.
The peer-to-peer trading community brings together those who want to test their skills and become strategy managers with those who hope to pick and choose the winners of the ranks and make money from their experience and talent.
Followers get to focus on metrics and little more, while strategy managers are left to compete in markets for capital growth for both themselves and their followers. Using the award-winning trading platform PrimeXBT, Covesting strategy managers can trade crude oil, gold, crypto, the S&P 500, and much more under one roof.
Strategy managers hope to stand out amongst the ranks by rising to the very top of the Covesting fully transparent leaderboards, which gives followers peace of mind that what they see is what they get. The way to the top is via profits but always going for the biggest win to claim all the fame is also a fast track to losses.
Simply put, every win streak comes to an end, and finding a diamond in the rough amongst a sea of competition can be challenging in typical circumstances. But thanks to the Covesting five-star rating system, followers can also pick from a select few who care more about capital protection than fast, runaway success.
The five-star rating system is five separate stamps that say the trader has adhered to certain standards set forth by the development team behind the module. Each one is earned separately and for entirely different reasons.
The vast range of necessary requirements ensure that any traders earning all five stars are as well rounded as it gets – so they are ready for whatever markets can throw at them. Here’s what the five stars of Covesting entail.
Equity Star: “The manager’s equity is more than or equal to 0.5 BTC”
The equity star as we’re calling it, makes certain that the strategy manager has skin in the game and isn’t just playing with other people’s money. Any respectable strategy manager takes their follower’s capital as seriously as their own. This star shows who is invested and who isn’t.
Activity Star: “Over the past 60 days, the number of trading days (presence of trading activity) is greater than or equal to 30
What good is a massive trading account packed with 50 BTC worth of margin to allocate but no activity? Very little, so the activity star as we’re dubbing it keeps traders on their toes and active within a reasonable amount of time. There’s enough time built in should life or vacation get in the way of trading, but not so much where a holiday turns into a disappearing act.
Allocation Star: “Over the past 30 days, the margin level did not fall below 60%, and the trading volume was more than 0”
Even if an account did have 50 BTC, it would be risky to open up a position with most of it in one go. If the market moved even a little, it could result in a margin call, or worse, liquidation. By never even allowing a margin call to come close, traders can show that they aren’t playing games with risk and take it to heart.
Aversion Star: “For the last 30 days, the ratio of the profits of closed positions to unprofitable ones was at least 70 / 30”
Avoiding loss and booking profits is how any skilled trader builds their capital and way to success, and strategy managers must be no different. Any profits booked are better than letting a loss stack up, and this star makes sure that traders keep that in mind at all times and their win and loss ratio within reason. It also helps weed out any traders that just so happened to get lucky with one profitable trade.
Turnover Star: “Over the past 30 days, the turnover has been greater than or equal to 50 BTC”
Being active and careful is good and all, but there is a level of being too careful, and this star ensures no one is sitting on their thumbs or going in with only tiny positions that don’t amount to much realized profits for their followers.
Why The Five Star Rating System Matters
Understanding the achievement related to all five stars and the significance of each also is a perfect example why any trader earning all five is also worthy of a following.