Launch HN: Coinrule (YC S21) – Automated Trading Made Easy

[ogiberstein]

Hi HN Community,

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!

[kulkarnic]

> 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

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.

[lend000]

Active investing is not the same as day trading. Most people do not realize that "passive investing" is basically zero sum (albeit harder to calculate because of being stretched over long periods where inflation becomes significant), just like short term trading. Value creation only comes from active investing (long term focused, but active and researched). The kind of active investing that Warren Buffett does is more similar to what VC's and private equity firms do than someone who buys and holds an index, spreading their money evenly across all big companies without any regard to which companies are deserving of investment.

[ogiberstein]

Thanks for the feedback. I am not sure if markets are a zero-sum game though? If the sector grows, the whole pie can become bigger, right?

[rvz]

How does it compare to Mudrex? [0] Also congratulations on being registered with the FCA and on your recent funding round.

Also:

> 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/

[ogiberstein]

Thanks!

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.

[freshmuse]

Hi Rvz, also one note to be extremely precise and informative: we are in FCA Temporary Crypto Asset Registration list as the framework in stil being finalises by the financial authority, and even if we don't a license to operate on the market we are anyway in the process of getting a full license to be able to expand the product offering in the future.

[peterthehacker]

I stumbled upon a security issue with your site. I was reading this LP trying to understand what this product does and saw this quote

> 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.

[ogiberstein]

Thanks for letting us know, I will look into it!

[guillegette]

Feature request: Allow to connect TradingView alarms to this. TV alarms allows for webhooks to be called. If you guys allow that to be a trigger for the rules, then you don't have to worry about adding indicators. TV has by far the best collection of indicators, strategies, etc, so why not just supporting the alerts?

Alternatively, maybe somehow support TV indicators? Not sure if "pine" (I think is the name of the language) is open source.

[ogiberstein]

Great point! We are working on this integration this sprint and will have it on staging by end of day tomorrow. Hoping to deploy next week! :)

[Grustaf]

Cool stuff! I started building something similar back in 2018 or so, we ran a crypto quant fund.

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.

[ogiberstein]

Thanks! :) Why did you guys stop?

[jakearmitage]

I would never trust a service like this, but at the same time, I'm curious on how to setup the opposite of their motto: "compete with professional algorithmic traders and hedge funds. coding required!".

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?

[ogiberstein]

Hi Jake - some of the traditional finance platforms (like IG) have APIs but not sure how high quality they are. You could probably hack something together if you are good enough with it though - keep in mind you still have to keep adjusting parameters, testing strategies on an ongoing basis etc etc. It's plenty work

[molsongolden]

Some brokerage accounts do come with API access. People have used Interactive Brokers to build trading bots for a long time now and there is also https://alpaca.markets/ which is developer-focused.

[stove]

I was intrigued by the "Test Rule Performance on Historical Data" feature on the home page. I thought signing up would let me play with the performance of your sample rules but I can't seem to figure that out. Is that possible?

Also, that home page block could be more informative. It shows me a dollar value but not what asset it was actually applied to.

[ogiberstein]

Thanks for the feedback - yes we need to improve that!

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

[gigatexal]

What is the point of opening this up to individual speculators? Wouldn’t it be better to launch a fund like an etf that ran the best or set of really good (historically backtested) ones and we lay people can just buy and sell shares of it?

[ogiberstein]

You can create your own 'bundles' of coins and rebalance them using Coinrule. Some of our template strategies have been backtested (see here for a few of them: https://help.coinrule.com/en/collections/2700051-template-ru...).

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.

[bawana]

I think they benefit by 'crowdsourcing' algo development. all coinrule has to do is follow the most profitable strategy from its customer base.

[freshmuse]

Hi Everyone, I am Gabriele, CEO and cofounder of Coinrule. Happy to answer any of your questions.

[mchakravarti7]

Hi! This is very interesting - I had a question but more so on the business side. I don't know much about finance, but what made you decide on a fixed fee pricing model than a take rate model like a hedge fund.

[cwkoss]

Is there a mechanism for back-testing strategies?

If so, do you/how do you correct for slippage?

[ogiberstein]

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 - correctly capturing for slippage is tough; we will be using historical order book data provided by Kaiko to make this as realistic as possible though

[culopatin]

Do you need to be a genius to do your taxes as an individual after using this tool?

[ogiberstein]

Hah good point! I think something like https://tokentax.co/ can still help you do it quite easily because you can export all the transactions from the exchange.

[worik]

People!! Stay away from this!!!

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.

[vntok]

All of this is of course patently false. Be aware worik and others will try to keep you from joining markets under dubious pretenses like protecting you or caring about your individual financial sanity. Don't listen to anh of them. Don't gamble more than you can afford to lose and you shall be fine.

[colesantiago]

> If you want to make money work on your skills and get a job.

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.

[ogiberstein]

I would argue that the efficient market hypothesis is problematic at best and I also disagree with the characterization of our users as 'dumb money'. We are in fact quite lucky to have some very smart users with us. There are many ways you can use Coinrule, not all of them must be entirely short-term oriented!

That said, it's absolutely your good right to disagree with our value proposition.