Smart Signals — What It Is and How It Works

Tessara · Beta · June 2026


The Short Version

Smart Signals is a new intelligence layer built into your Tessara bot. It does three things:

1. Makes entries smarter — before placing a buy, it reads real-time signals to decide how much to commit. Strong setup = larger position. Weak setup = smaller position. It always buys — it just sizes based on confidence.

2. Makes exits smarter (optional, off by default) — it continuously ranks every coin you're holding. If something better comes along and your weakest position is significantly underperforming, it can rotate capital out of the weak position and into the better one.

3. Protects the portfolio automatically — when market conditions deteriorate across multiple signals simultaneously, the bot pauses new buys on its own without you needing to intervene manually.

Most features are off by default. Your bot runs exactly as it does today unless you turn them on. The exceptions are Signal Score (entry sizing) and Automatic Buy Pause — both are on by default because they have no downside and protect you from the start.

This feature has been tested live on a real account before being made available to you. You're a beta user — you're getting early access and your feedback matters. If something seems off, let us know.


⚠️ The Most Important Thing to Understand

If you enable the rotation features, the bot will sometimes sell at a loss on purpose.

This is not a bug. It's the point.

Here's the logic: if you're holding a coin that's down 8% and showing every sign of going further down, and a different coin has a much stronger setup right now — the mathematically better move may be to take the smaller loss now, free that capital, and put it to work somewhere better.

The alternative is holding the losing position and hoping it recovers while better opportunities pass.

This is how experienced traders think about capital allocation. But it means you will see completed trades in your history that closed at a loss, and they will be labeled clearly as to why.

There are also cases where the bot will exit a position to cash even when there's no new coin to rotate into. This happens when signals are extremely strong — bad order flow, underperforming BTC, and low conviction all at once. In that scenario, the bot exits to protect the capital even without a destination. The freed cash sits idle until conditions improve or a new opportunity appears.

If you are not comfortable with intentional loss exits, leave the rotation features off. Signal Score and Automatic Buy Pause are safe for everyone — no exit risk involved.


What Each Feature Does

Signal Score (on by default)

Before every buy order, the bot calculates a 0–100 score based on:
  • Order flow — is buying pressure stronger than selling pressure on this coin right now?
  • Relative strength — is this coin performing better or worse than BTC at this moment?
  • Liquidity — how deep is the order book? Can we get in and out cleanly?
  • Market context — what is the broader market doing?
  • A high score (75+) means the bot buys a larger position (up to 1.25× normal). A low score means it buys a smaller one (as low as 0.35×). It never skips an entry entirely — it just sizes by confidence.

    Risk: none. This only affects how much is bought, not when things are sold.


    Automatic Buy Pause (on by default)

    When multiple market signals deteriorate at the same time, the bot automatically halts all buying. Existing sell orders, trailing exits, and rotation exits continue normally. Capital accumulates as positions close.

    There are two levels — both do the same things, they just trigger at different severities:

    Buy Pause (softer) — triggers on moderate deterioration. Yellow banner on dashboard.

    Full Defensive (stronger, rare) — triggers only in genuinely severe conditions. Red banner on dashboard. Longer minimum active period and stricter recovery requirements.

    What both modes do:

  • Cancel all open buy orders immediately
  • Stop all new buy orders
  • Let all existing sell orders, trailing stops, and exits continue normally
  • Capital accumulates in cash until conditions improve
  • Why cancel existing orders too? You might think a buy order sitting 5% below current price is safe — it's a better entry after all. But if the market falls to that level during a pause, it's falling because conditions are bad. You'd be buying into a deteriorating market, not catching a genuine dip. The right move: cancel the order now, let capital sit safely, and place fresh deliberate orders once conditions recover. Those fresh orders may well be at lower prices than the cancelled ones — but they'll be placed with intention when the environment is right again, not left over from before things went wrong.

    On resume: the grid recalculates fresh and places new orders based on current price levels. Cancelled orders are never reinstated.

    Both modes require two signals firing simultaneously — a single noisy signal can't trigger a portfolio-wide halt on its own. Once triggered, the pause stays active for a minimum of 2 hours (Buy Pause) or 4 hours (Full Defensive), then auto-resumes when conditions clearly improve with a confirmation window.

    You can always manually override — force resume or extend the pause — from the dashboard.

    Risk: none in terms of losses. This cancels pending orders but does not sell any existing positions.


    Relative Strength Rotation (off by default)

    The bot continuously ranks every coin you're holding by how it's performing relative to Bitcoin. The weakest-performing coin is always the first candidate to be replaced if something better comes along.

    Rotation fires when:

  • A new opportunity scores highly on the Signal Score
  • Your weakest held coin is significantly underperforming BTC
  • The position has been held for at least 2 hours
  • The portfolio isn't already having a rough day (rotation pauses automatically if you're down more than 6% on the day)
  • When rotation fires, the weak position is sold and the capital is redeployed into the better opportunity. The exited position is clearly labeled in your trade history with the reason.

    If signals are very strong but there's nothing to rotate into, the bot will exit the position to cash rather than hold a coin everything is signaling against. Capital sits idle until something better appears.

    BTC and ETH are protected by default — they require twice the normal weakness threshold before they can be rotated out. You can also manually protect any other coin in Settings.

    Built-in churn protection: The rotation system has four independent safeguards to prevent a feedback loop of losses:

  • Rotation-driven losses are capped at 2% of your portfolio per day (Soft rotations only). Full Override exits are exempt.
  • After 3 consecutive rotation losses of 2%+ each, rotations pause for 12 hours.
  • The worse the exit loss, the higher the required score on the incoming coin (e.g. a 7% exit loss requires a score of 80+ on the new coin, not just 65).
  • A hard cap of 12 rotations per day regardless of signals.
  • Risk: intentional loss exits possible. Only enable this if you understand and accept that.


    Conviction Decay (off by default)

    Positions that have been underwater for a long time with no signs of recovery gradually lose their "conviction score." When conviction drops low enough, the position becomes eligible for rotation — even if there's no competing opportunity yet (in which case a strong enough signal can trigger a cash exit).

    The decay rate is dynamic:

  • Faster decay when the coin is also showing weak order flow AND underperforming BTC — triple confirmation of trouble
  • Slower decay when the coin is showing positive buying pressure despite being underwater — might be quietly consolidating
  • Partial reset when a strong positive order flow day occurs while still underwater — the bot gives it more time
  • Full reset on a green daily close or when price recovers near cost basis
  • Risk: intentional loss exits possible. Pairs with Rotation — if rotation is off, decay scores are tracked but nothing acts on them.


    Correlation Limits (off by default)

    Prevents too much capital from piling into coins that all move together. The bot automatically identifies clusters of correlated coins (meme coins, layer-1s, DeFi tokens tend to cluster naturally) and limits any one cluster to 25% of your deployed capital by default.

    This is a capital limit, not a coin count limit. You can hold 10 meme coins if you want — as long as their combined position sizes don't exceed 25% of deployed capital. The bot figures out which coins are correlated automatically from price data, no manual setup needed.

    When a new coin would push a cluster over the limit, the bot either waits or rotates within the cluster (exits the weakest cluster member, enters the new one).

    Risk: may defer some entries. No forced loss exits — this only affects new entries going forward.


    What Gets Labeled in Your History

    Every trade now shows an exit reason:

    | Label | Meaning | |---|---| | ✅ Normal grid cycle | Standard grid trade — bot bought and sold as usual | | 🔄 Rotated out — weaker than new opportunity | Rotation system exited this position to deploy capital elsewhere | | 🔄 Rotated out — sustained sell pressure | Order flow indicated continued downside | | 🔄 Rotated out — position stale, conviction decayed | Held too long with no recovery signals | | 🔄 Rotated out — cluster capital rebalance | Too much capital concentrated in correlated coins | | 🔄 Defensive exit — no rotation target | All signals pointed to exit; bot sold to cash with no destination | | 🛑 Per-coin drawdown stop | Existing protection — coin hit its max drawdown threshold | | 🛑 Portfolio stop-loss | Existing protection — portfolio-level stop fired |

    For rotation exits, your history also shows: which override tier fired (Soft or Full), the relative strength score at the time, and the signal score of the incoming coin (if applicable).


    The Dashboard

    When Smart Signals is active you'll see:

  • Buy Pause banner — yellow or red, shown prominently when active, with specific trigger reason and conditions required to clear
  • Signal score per coin in the coin detail panel — color coded green (75+) / yellow / orange / red (0–24)
  • Relative strength rank — how each held coin is performing vs BTC, color coded
  • Conviction level — bar and number, for held positions; low conviction shows "Stale — eligible for rotation"
  • Cluster badge — which correlation cluster a coin belongs to and what % of capital that cluster represents
  • Smart Signals Health card — rotations today, average signal score, conviction distribution, largest cluster, buy pause status
  • Rotation History — full log of every rotation with from/to coin, amount, reason, scores, P&L on exit

  • Questions

    If you have questions about how Smart Signals is affecting your bot's behavior:

  • Why did the bot stop buying? → Check the Buy Pause banner on the dashboard. It shows exactly which conditions triggered it.
  • Why was a position sold at a loss? → Check the Rotation History log. It shows every rotation with full signal context.
  • Why is a coin showing a low signal score? → Hover the score in the coin panel for a breakdown of each component.

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