With so many Set options you can choose, it may be hard to immediately understand how to make an informed decision when buying a Set. This article will break down everything you need to know before making the buy decision for a Set.
TokenSets currently hosts two types of Sets, the Social Trader Sets, and the Robo Sets.
- Social Trader Sets - Sets that are created and rebalanced by a person using their own trading/asset management strategy. These Sets allow you to get access to a trader's edge.
- Robo Sets - Sets that rebalance based on strict rules written into the Set's code itself. These Set's trades are automated and remove some of the uncertainty that comes with human managed Sets.
Social Trader Sets
On the Explore Page, you can view all of the Social Trader Sets available. On this page, you'll be able to view high level information such as the:
- Trader of the Set
- Market cap
- Performance since, 1 day, 1 week, 1 month, 3 months, and since inception
When you click on one of these Sets, you'll be guided to the Set's page, where you can view more detailed information.
If you scroll down, you'll be able to view the "About" section where most of the important information is shown, including a description about the Set, the strategy that it runs, links to more information, disclaimers, as well as key facts below the description that will help inform your buying decision such as:
- Buy fee - The percentage fee taken when you buy a Set.
- Max drawdown - The max amount of loss that was incurred by holding the Set. A metric to mainly gauge risk for a Set's strategy.
- Total trades - How many trades the Set has made. Sets usually rebalance at around 0.55% slippage per rebalance. Each trade will most likely incur a small amount of slippage equivalent to that amount.
- Trades per month - The average number of trades the Set makes a month.
- Creator's balance in their Set - The amount of money the Set creator him/herself has in their own Set. A good way to gauge how serious a trader is about their own Set.
By reading through the information for Sets you're interested in, and understanding the details about each Set, you can create an informed opinion about which Set is right for you based on the trading strategy executed and the risks involved.
On the Explore Page, you can view all of the Robo Sets available. Simply navigate to the page and click on "Robo Sets" near the top of the Sets list. Robo Sets rebalance based on indicators such as the 20 day moving average, the 26 day exponential moving average, RSIs, and more. We won't go into too many details about what each Set does in this article, but if you want to learn more about what each Robo Set does in detail, they all have their own corresponding articles on how their trading algorithms work in their Set descriptions. You can find most of the articles here in the Trend Trading section in the help center. Here are a few examples from the collection:
- How the ETH 20 Day Moving Average Crossover Set Works
- How the ETH 26 Day EMA Crossover Set Works
- How the ETH 60/40 Crossover Set Works
Moving on, in the Explore view, you'll be able to view high level information such as the:
- Strategy - For example: Trend trading, buy and hold, range bound, and inverse strategies.
- Market Cap - The total dollar value of a Set's total supply.
- Price - The price of 1 Set
- Performance - The historical return on a 1 day, 1 week, 1 month, 3 month, and since inception time horizon.
Some of these Sets contain cTokens which earn you interest when it's weighted in a stable asset. You can tell if it has a cToken inside if the name of the Set has "Yield" in it, and if the Set's icon has a c symbol on the bottom left.
When you click into one of these Sets, you'll be able to read the description about the Set, and any key facts about the Set further down the page. The main key facts are:
- Set description - An explanation on how the Set works on a high level. There's a link to more details in each of the Set's descriptions.
- Rebalancing criteria - The parameters that need to be met in order to initiate a rebalance.
- Key facts - A list of key information you'll want to know about the Set including, inception date, rebalancing phase, time of last rebalance, rebalance tolerance, and links to the Set's Etherscan page.
- Historical performance - A price chart that shows the historical performance of each Set against its benchmark. This chart also shows all of the rebalances that have taken place over time.
Each Robo Set has its own set of rules that it uses to trade which can affect how well it performs in a given market. Generally, trend trading Sets are good for upward and downward trending markets, and generally less performant when markets go sideways, buy and hold Sets do the best when there's a bull market, and range bound Sets do well when the market is neutral and bouncing within a specified range.
Using this information, you can create an informed decision on whether or not to buy a chosen Robo Set. If you've found a certain Set you'd like to buy, and want to learn how to buy a Set, you can view this tutorial here: How to buy a Set