BTC Inverse SL
Sequence Wiki — Derivatives
Table of contents
Key terms on this page
Summary
Field | Detail |
|---|---|
Goal | Hold BTC / profits settled in BTC |
Type | Stop Loss |
Variants | 2.2x Stop Loss (2.2x Long / 2x Short) |
Margin | N/A - Available to accounts over 0.4 BTC |
Minimum | Min: 0.2 BTC / Max: up to 50% of your total balance (valued in BTC) traded across your active Sequence portfolio. A minimum of 0.4 BTC must be allocated across BTC-based strategies |
Exchanges | Bybit (Preferred), Bitget, Blofin, Binance |
Market | Long & Short market settings |
Description
This strategy trades on the inverse perpetual market. The strategy is designed to work in both bull and bear markets with a stop loss. It trades a much more aggressive strategy and tighter range. However, from time to time (once every 14 months in a bull-market, and once every 12 months in a bear-market) it is designed to lose a trade (whereas our other inverse and linear strategies are designed to be more passive). When it loses a trade, it will lose up to 25% of the account. This means that even accounting for the losing trades, the algorithm still yields much more than our classic strategy.
In backtesting (and live trading - started in Jan 2025), the strategy yields 3-4x what our classic 1.5x strategy has done:
Like all our strategies, it requires bidirectional volatility to close larger trades. While is seasonal, on other occasions it can come out of the blue. However, during times of relative calm and the market is trading up and down a few percent, the strategy will place smaller trades. In this way, you know that we are connected to your account.
The strategy is 100% automated and trades 24/7.
This strategy is restricted in some jurisdictions due to the use of .
Bull vs bear behavior
This strategy now trades both long and short.
In a bull market, the strategy accumulates BTC through trading 2.2x long.
In a bear market, the strategy switches to trading 2x short.
In a crab market, this strategy tends to perform the same as the 1.5x strategy - but when the market moves, it capitalizes much more on the market weakness/strength.
How to trade this strategy
This strategy is invite only and requires a Min 0.2 BTC / Max 50% of BTC balance that is being traded. It also requires a different risk disclosure and you must continue to trade the other strategies.
In the event of a event, the strategy will continue to trade for free until the principal prior to the liquidation event is recouped. However, all additional strategies that you are running will be invoiced as normal.
Why are we offering this strategy
BTC is changing as an asset class, and we have visibly declining volatility. This means that we need to adapt to the times and change the way that we are trading.
Historic Performance
Bybit - median cohort
2026
| Month | % Return |
|---|---|
| JanuaryFully transitioned to Short Mode | 1.69% |
| February | 6.82% |
| March | 2.19% |
| April | 2.86% |
| May | 1.26% |
2025
| Month | % Return |
|---|---|
| February | 3.08% |
| March | 6.18% |
| April | 2.73% |
| May | 1.04% |
| June | 2.67% |
| July | 0.86% |
| August | 0.91% |
| September | 1.90% |
| October | 3.84% |
| November | 1.34% |
| DecemberTransitioning to Short Mode | 2.06% |
Example Growth In Equity (Bybit - single account)
03/02/2025-01/05/2025
Example Volatility Return Profile (Bybit - single account)
03/02/2025-01/05/2025
Videos
Trade With Sequence
What is a DCA strategy
What are API keys
Derivatives Products
Spot vs Derivatives Markets
Risks
Algorithmic trading risks
⛔ Even when using low , due to the risk of asset , one has to contend with liquidation risk when markets react in irrational ways - e.g. a .
🟢 Entering positions using derivatives contracts priced in USD while holding BTC as carries convexity risk. While there is a small probability that any extra margin will be necessary while in an upward market trend, we always recommend keeping aside 100% of the balance being traded on a separate wallet in case the market goes against your trade, and out of our predefined safety net. A Margin Call will be sent soon before this extra margin is needed to push away risk when facing black swan types of events.
Exchange (custodial risk)
⛔ Bank Runs: As with the collapse of FTX, sudden withdrawals by clients can create extreme situations for any exchange with muddy custody practices
⛔ Thin order books: Smaller exchanges sometimes struggle with liquidity and trading volumes - this creates an inefficient marketplace
⛔ Personal Security: Hackers and scammers are getting more sophisticated. Personal operational Security (Opsec) is critical to the crypto industry
Mitigations:
🟢 : we only work with exchanges that do end-to-end Merkle-Tree proof of reserves, 1:1 backing of customer funds and are highly regulated.
🟢 Order volume + liquidity: The exchanges we work with have exceptional liquidity and trading volume - this gives the trading system the best chances of executing buy and sell orders
🟢 Top security: all our exchanges employ bank grade security. We recommend you use 2FA on all your exchange accounts and email account. We use SHA-256 HMAC cryptographic encryption with your critical data.
Protocol risk
⛔ Nascent Digital Assets: Crypto is new and highly volatile. It is after all, one of the reasons why we are trading these types of assets. The volatility is our friend :) That said, substantial protocols have been known to fail or encounter the heavy hand of legislation.
🟢 Trade only blue chip assets: Sequence only trades some of the top digital assets, with solid fundamentals and long trading histories. We believe in the asset class, however there is always the risk that the traded pair (BTC) goes to zero in USD terms.
Client self-trading risk
⛔ Touching the algo: Rule one of Sequence is to not touch the trades...
🟢 Valid API connection: So long as we have a valid API connection do not touch the trades! The system is designed to be programmatic and therefore automated. If you want to trade yourself, then you must do this on another account. Our team is always tracking to make sure the connection is valid and will be in touch if there is any issue.
Sequence USPs:
✅ We only profit, when you make money. Our goals are 100% aligned.
✅ Controlled By You: All of our products are 100% held by you, on your exchange account. You have complete control of your assets AT ALL TIMES.
✅ No lock up: With no contracts and no minimum period, you can cancel at any time
How to get started For next steps please see our following guide: Getting Started
More questions? 💌 support@tradewithsequence.com