How I select Managers on Genesis Vision

A 3 Step Process on Selecting Managers

Manager Level

One big misconception about manager level is that the higher level the manager is, the higher the expected returns. This is not true! The ONLY thing that manager level guarantees is how much money a manager can trade with. You should not look at manager level to determine if you should invest in a manger — there are other far more useful metrics to look at.

Beta

Simply defined, Beta is the market performance. You want to ensure that your Beta risk is diversified. You can do this by investing managers with different base currencies, such as BTC, ETH, USDT, or USD (FOREX). By selecting managers who trade in different currency pairs, you can effectively diversify your Beta risk. (Although most crypto base currencies are highly correlated)

TLDR: Spread your investments across multiple trading pairs and assets

Alpha

Alpha is risk-adjusted returns based on market volatility. If Beta is market performance, Alpha can be described as a manager’s performance within that market. There are several ratios to measure a manager’s Alpha that we will get into later, but for now, I want to focus on diversifying Alpha based on trading style.

When selecting managers, I think it is important to look what the manager’s behaviors are — you want to diversify in this aspect as well. Here are examples to consider:

Does this manager trade large cap or small cap crypto?

Does this manager make short-term or long-term trades?

Does this manager trade manually or is it an algorithmic bot?

Does this manager frequently trade currencies that several other managers you are invested in also trade?

TLDR: Invest in a portfolio of managers who are diversified in their trading pairs, market caps of coins traded, and trading styles

My Personal Approach

“CryptoConfucious, all of the good managers are taken, how can I select a manager?” I get asked this all the time.

This is how I do it. (full disclaimer, this is not investment advice, this simply how I choose managers)

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