Course 14

Different bot options

What you will learn:

  • What are some of the bot options or strategies on the market

I am pretty pumped to share this one part with you, because in a few minutes of reading you will be able to learn 6+ months’ worth of searching, discovering, trying, etc.

Below is then a list of some of the technics/bots I have used and learned about:

Regular buy or sell with fixed TP and SL

This one is great is you have super edge over the market. What is important for this one is to adjust your Risk/Reward appropriately. You should also link this to your win rate. For example if your R/R is very high (meaning your wins are much bigger than your losses) then you can get by with a small win rate. In the opposite, if your R/R is smaller, for example you risk 1 to gain 2, then you should have a win rate at least 55% and the higher the better of course. Otherwise you won’t make money. With this system, what I really like is that you are forced to put on the exchange your TP and your SL. This removes all the stress and emotions involved in trading. It also means that you have a plan, which is important in trading! Don’t enter into a trade and then decide when to exit. Always do this before – that bot is great for that. This one is great for oscillating market.

DCA Bot

This one is what 3commas is known for, the DCA (Dollar Cost Averaging) bot. What it does is it enters into a position, with a specific Take Profit level (same as the previous one), you can also have a Stop Loss in place, which is great so far, but in addition, you can lay Safety Orders in case the trade goes against you. Depending on your strategy, your risk level and how you set it up, a DCA bot can very extremely lucrative in strong trending market.

Grid bot

This one is available on 3commas as well, but you can easily code one into Alertatron. What it does is when the price goes down, it buys, buys, buys, … Then, when the price reverses up, it sells, sells ,sells, … It makes a lot of sense to understand that this bot is fantastic when the market ranges – which it does most of the time. If you use a grid on futures/derivatives, the trick with this bot is to find a range, enter around the middle of it, and then try to stop the bot before the price looks like it will go outside the range. It is very tricky because you basically have to take the loss if you accumulated too much on one side, and the price is really pushing against you, outside of the trading range. Given than the market is absolutely 100% random, having something like that which buys and sells all day long, is absolutely fantastic. My take is that I would not trade it on derivatives, to prevent taking a loss. I would instead trade on spot and so when the price goes outside of the trading range on the upside, you will have no position, so you simply need to readjust your grid to the upside. If the price goes down though, you have 2 options: either you take a lost (like on derivatives), or you just wait to the price to come back up. Let’s say you really screwed up and the price is all the way down and we enter a long bear market, well, you can hold all this time if you want, and take not loss at all. Capital preservation is key really in trading, but sometimes taking a loss makes more sense. If you take a 15% loss, and 15% is what you can make each month during a 6 month bear market, it makes more sense to take the loss and re-enter lower. Grid bot is what I use with the money I would usually have sitting at the bank.

QFL Bot

This is not necessarily a bot but rather a strategy. QFL is the acronym for Quick Fingers Luck. You can research him, he is a great trader and invented this trading strategy which consists of trading base breaks. QFL is actually the base of my second bot, Maddrix_club II. I actually never ran this one taking a loss, but I have identified placed where I could have lost a lot if I didn’t have one! I will sometime give access to this one but first I need to build in a Stop Loss or something, so people don’t get recked. The idea behind it is to trade long only, when a base, or a range where there have been a lot a trading, gets broken. Because the range is broken, people panic sell and it become a great opportunity to buy. So the QFL buys when it dips hard beyond the base. Then, since price almost always reverses up – sometimes not for long – you can now have all your buys in profit, and you can sell and make what QFL calls “free coins”. You can use this QFL Base break strategy with a little of the DCA (using safety orders) but with some Stop Loss like any regular trade. 3commas also has a QFl bot built in, so you receive signals directly from them.

PSAR Bot

PSAR bot, which is Maddrix_club I, is running as a DCA bot. The main particularity of it though is that it seeks to take very small profits, usually 0.10% to 0.20%. It uses also a lot of Safety orders, up to 10 (or more! Why not). This is a great passive bot because if you use it properly, meaning with proper position sizing, where you never risk to liquidate all your funds, you could use it on derivates on several pairs at the same time. Now you can get 0.25-5% a day !

Switch bot

A switch bot is pretty awesome. You are basically always in a trade, either long, or short. The goal is to identify tops and bottom. Then you long at a bottom and short at the top. The key with these bots is to avoid the chop at either top or bottom. The other key is to be in a super trending market. The SAR indicator is in theory helping you to do that because this is a Stop And Reverse indicator. On some pairs, the SAR works great on the 5 min TF or the 15 min. You can use the strategy indicator and you will see it is profitable! Nice! But don’t forget about fees slippage and delay in execution. The better traders actually talk about their switch bot, with the TBO switch.

Hard Coded bots

Then, you have plenty of bots that programmers have built out of Python, or other coding language, that they run from their local computer or a virtual one. These either come with a strategy (which they developed) or with just the tools to send the orders to the exchanges, and you bring your own strategy. I have tried one like that, it never really worked (the strategy). I’m not sharing any information because I don’t want to create any shadow for them. If I tell you something, it is good! It something wasn’t good, I just don’t share. In conclusion, I am not a fan of these bots because you don’t see what is inside. With a simple TradingView piece of code, you can create your own strategy, and with Alertatron or 3commas, you can hook it up to your exchange and you’re done.

Online bots

These bots are the same as the previous one (hard coded) except they are online. This is not the same as 3commas as 3C is more a platform with several services.