Introduction to Risk Analyzer
The Risk Analysis Module is an advanced tool designed to provide users with an instant market risk assessment for their selected crypto assets. This module performs a quantitative analysis based on technical indicators to determine an asset's risk level in current market conditions, its potential direction, and, accordingly, the recommended maximum leverage level. In the user interface (UI), this analysis is presented through an interactive "Risk Popup". The goal is to provide investors with complex data in an understandable and actionable format that can be interpreted in seconds.
How the AI Engine Works
Our Risk Analyzer is an AI-driven tool that offers dynamic, data-backed leverage recommendations for every token and coin on the market. It processes a massive amount of market data, going far beyond typical indicators. You can think of it as your personal market intelligence hub.
Our AI model meticulously analyzes a wide variety of data points to generate a comprehensive risk analysis for each asset, including the following:
Volatility Analysis (ATR): Measures market volatility and potential price swings.
Price Momentum (Momentum): Determines the general direction and strength of the price, generating signals about the trend's continuity.
Short-Term Price Movements: Captures sudden and sharp market movements to assess short-term risks and opportunities.
Volume Anomalies: Detects unusual trading volumes that could indicate significant shifts.
Whale Movements: Identifies large-scale transactions made by major investors, which often precede market trends.
On-Chain Metrics: Delves into the fundamental data of blockchain networks, such as transaction counts and unique active addresses.
Inter-Asset Correlations: Understands how different assets move in relation to each other to provide a perspective on the overall health of the market.
The Foundation of the Methodology: Quantitative Analysis
Although we often refer to it as "artificial intelligence," at the heart of the system is actually a rule-based, quantitative analysis algorithm. This algorithm objectively scores the state of the market using proven technical analysis indicators. This approach is more akin to expert systems than a machine learning model. Our advanced AI then processes this vast array of information to produce a final risk analysis and a risk score between 1 and 20 for each asset.
Data Source
The data analyzed by the system is fetched in real-time from a transparent and reliable source:
Time Interval: 1h (One-Hour) candles
Data Depth: limit=200 (Last 200 hours of data)
Scoring, Leverage, and Interpretation
The 1-20 score generated by the AI directly represents the recommended maximum leverage level. However, the interpretation of this score differs depending on the direction of the position you intend to open (Long or Short).
Leverage Adjustment for Long and Short Positions
The score produced by our analyzer primarily indicates the risk level and is designed for long (bullish) positions.
Long Positions: The recommended leverage is the score itself. For example, if the score is 15x, the recommended maximum leverage for a long position is 15x.
Short Positions: When the analyzer predicts a downtrend ("Bearish" or "Strong Bearish"), the score will naturally be lower. In this case, the ideal leverage for a short position is calculated with the formula:
Leverage_Short = 20 - Risk_Score.
A Practical Example:
Let's say the analyzer provides a "Bearish" comment for an asset along with a score of 8x.
This indicates that opening a long position against the current downtrend is risky and a maximum leverage of 8x should be used.
However, if you want to open a short position in the direction of the trend, the ideal leverage for you would be 20 - 8 = 12x. The low score implies that the risk for a short position is lower, and therefore, higher leverage can be used.
For our Auto-Trade users: This calculation is fully automated. The system will determine and apply the correct leverage to your trades based on the position's direction. You do not need to make any manual adjustments.
Additional Features
CMC Top 1000 Projects Module: We recommend you take a look at the module that pulls and scores data from the top 1000 projects on CoinMarketCap. This data is downloaded directly to your device.
Why Is This So Important?
This addition is a game-changer for many reasons:
Auto-Trade Enhancement: For users leveraging our auto-trading feature, this is a significant upgrade. The days of manually setting your leverage are over. The Risk Analyzer will automatically determine and apply the optimal leverage for your trades, seamlessly integrating its insights into your strategy. This ensures your automated trades are always executed with a data-driven risk profile.
Empowered Risk Management for All: Even if you're not a Prime user or don't utilize auto-trade, the Risk Analyzer provides immense value. Instead of sifting through dozens of disparate data points to assess market risk, you'll have the processed results of all this data presented directly and intuitively. This empowers everyone to make more informed decisions and manage their risk more effectively.
A comprehensive summary of the structure, not the entire code, but it can be reconstructed using this logic. Source code:https://github.com/mefai-dev/mefai/blob/main/RISKAI.txt
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