Welcome to our blog; this time, we embark on an exciting journey to discover the remarkable potential of automated take-profit for your vault. In the fast-paced decentralized finance (DeFi) world, finding ways to optimize your returns and manage risks can feel like navigating a complex maze. However, with automated take-profit, we have a game-changing tool that allows you to set target prices for your assets, effortlessly securing profits without the hassle of constant monitoring or manual intervention.
So, grab your favorite drink and join us as we dive into automated take-profit benefits and practical applications, uncovering how it can effortlessly enhance your investment strategy.
How Does Take Profit Work?
To set up Take Profit on your Vault, you must sign a transaction granting permission to the Automation smart contract to close Vaults based on your specified parameters.
Once the transaction is confirmed on the blockchain, our keepers (automated scripts) will monitor the subsequent OSM price against your Take-Profit trigger. When the trigger is hit, a keeper executes the trigger function by calling the Automation smart contract.
Take Profit functions by automatically closing your Vault once the collateral asset reaches your defined "Target Price." The automation smart contract initiates a series of transactions: taking a flash loan, repaying your Vault's debt, unlocking and swapping your collateral, repaying the flash loan, and finally, returning any remaining funds (collateral or DAI based on your selection) to your Vault owner's wallet address.
Let’s dive into three actionable items to help you set up your Automated Take-Profit
Define Clear Investment Goals:
Setting clear investment goals is crucial to align your automated take-profit strategy with your overall investment objectives. Consider your portfolio's desired returns, time horizon, and risk tolerance. Defining clear investment goals ensures your automated take-profit strategy is tailored to your needs.
Suppose you aim to achieve a 20% return on cryptocurrency investments over one year. You also have a moderate risk tolerance, willing to accept reasonable fluctuations in the market.
Based on these goals, you can set a target price for automated take-profit that aligns with your desired returns. For instance, if you hold Ethereum (ETH) in your portfolio and it's currently valued at $2,000, you might set a target price of $2,400 (20% increase) for automated take-profit. Once ETH reaches this target price, the automated take-profit feature will trigger, automatically selling your ETH for Dai and closing your Vault.
Conduct Thorough Market Research:
To set effective target prices for automated take-profit, it's essential to conduct thorough market research. Stay up to date with the latest market trends, news, and events that impact the price movements of your collateral asset. Analyse technical indicators, such as moving averages or support and resistance levels, to identify potential price targets.
Consider fundamental factors affecting the asset's value, such as supply and demand dynamics or regulatory developments. By staying informed and conducting comprehensive market research, you can make well-informed decisions when configuring the target price for automated take-profit.
Some examples of sources of relevant information:
Test and Fine-Tune:
Implementing an automated take-profit strategy should involve testing and fine-tuning to optimize effectiveness. Start with small positions or use a virtual trading environment to simulate real-market conditions without risking significant capital. Monitor the performance of your automated take-profit strategy and assess how well it aligns with your investment goals. Evaluate your target prices and parameters and analyze their performance under market conditions.
Adjust your target prices or parameters based on real-time market data and performance analysis. This iterative approach allows you to refine your strategy and improve its efficiency over time, maximizing the potential returns from automated take-profit. You can use off-chain free tools like TradingView to backtest your strategies.
Now, how do I set up Take Profit?
To set up Take-Profit, you must have an existing Borrow or Multiply Vault on Oasis.
- Go to the "Optimization" tab and select the Take Profit Banner
- Select to take your profits in ETH or DAI.
- Select your Target Collateral price with the Slider.
- Add Take-Profit, and confirm the transaction in your wallet.
In conclusion, automated take-profit is a game-changer in decentralized finance, offering unparalleled convenience, risk management, and efficient portfolio management. By clearly defining your investment goals, conducting thorough market research, and continuously testing and fine-tuning your strategy, you can unlock the full potential of automated take-profit for your position.
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