Launch HN: Coinrule (YC S21) – Automated Trading Made Easy
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!
53 comments
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> 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/
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.
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.
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.
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?
Also, that home page block could be more informative. It shows me a dollar value but not what asset it was actually applied to.
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
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.
Concentrated portfolios are also positive-sum, and have returns higher than passive investing if you are smart or lucky.
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.
You say that passive investment provides no value to society because it provides capital for failed and successful businesses equally. But there you said it: it contributes capital to companies that will succeed. How is this "No value to society"?
>It's only more profitable than mutual funds because ETF's have lower fees due to special tax rules around rebalancing.
No, it's the other way around. It's because ETFs have been found to be more profitable on average than mutual funds, that it was heavily incentivized to invest in them. ETFs are profitable for structural reasons, because it's really hard to beat the market on average.
Because pumping up the market value of a "bad" company contributes negatively (not zero) to the economy. Any benefits that a future innovative company would reap from your capital are canceled out by the same benefits that their wasteful competitors reap for talent and secondary stock offerings (which can be spent on anything, potentially bidding up prices of raw materials, real estate, etc. for the "good" companies).
Is it a perfect 1:1 cancellation? Probably not, but it requires too much data for either of us to calculate it directly. But a fair assumption is that blindly investing in the entire stock market via a passive index, even if you are hugely wealthy, has negligible benefit to GDP, compared to active investing (assuming you are good at it).
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.
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.
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.
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?
"New construction is bad because it's all financed by fraud and theft from the proletariat!"
I do agree I wouldn't join an automated trading platform without a high level math degree and market understanding though.
That said, it's absolutely your good right to disagree with our value proposition.
It is well established by research. It is has a good theoretical foundation. It is problematic for this business, true.
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.
S&P gained 16.26% in 2020, roughly 3x average annual gains.
Alternatively, maybe somehow support TV indicators? Not sure if "pine" (I think is the name of the language) is open source.
> 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.
If so, do you/how do you correct for slippage?