Decision Criteria in crypto trading and investment systems are the specific, quantifiable, and qualitative metrics or rules used to evaluate options and guide automated or discretionary actions. These criteria serve as parameters for initiating trades, adjusting portfolio allocations, or assessing the viability of new protocols. Their purpose is to provide an objective basis for systematic choice.
Mechanism
Within an algorithmic trading system, decision criteria are codified as logical conditions or mathematical functions that process real-time market data, technical indicators, and predefined risk thresholds. Information flow involves continuous ingestion of price feeds, order book depth, and on-chain metrics, which are then evaluated against these programmed rules. The output triggers specific order types or portfolio adjustments.
Methodology
The strategic approach involves defining, weighting, and refining these criteria through backtesting, optimization, and continuous performance monitoring. Methodologies include multi-factor models, statistical arbitrage rules, and smart contract audit outcomes. The aim is to systematize investment discipline, remove emotional bias, and consistently apply a logical framework to complex, volatile crypto markets.
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