I recently came across a new bot that’s fairly new on the scene developed by an Estonian company and it’s available in 2 languages Russian and English.
They have automatic trading bots for Bittrex, BitFinex, Binance, Bitstamp, KuCoin, Poloniex, GDAX, Cryptopia, Cex, Huobi and YOBIT. But it seems their platform goes beyond offering a trading bot, they provide other features like portfolio management and rebalancing, social trading (copy successful trades), smart trading (stop-loss and take profit and trailing stop loss features).
The interesting part of this bot is that it has a bot strategy that I came across before when I was using the now-defunct Traderdaddy.
The main algorithm is very simple. It basically buys low sells higher. The bot basically buys at the current rate and immediately sets a sell order 1 or 2% higher (depending on how you have set it) when the target is hit the sell happens almost immediately since the buy order is already lined up on the exchange.
But, but…what if the price drops? In that case, bot automatically places safety-orders, which are lower than the last buy-order price every X%. So basically the bot is automatically averaging down and thus moving your profit target lower. On the next bounce, the coin is sold with a profit.
Here is an example (courtesy of 3commas.io):
Suppose ETH costs $500 and trader with $1000 deposit wants to earn $10 using the bot. So here is the step-by-step algorithm:
Bot buys ETH at the rate of $500 on $100, that is 0.2 ETH
Bot places sell-order on his 0.2 ETH at the rate of $550, that is $110. So, if the rate will reach that point, a trader will take $10 profit.
Bot places safety-buy-orders on $100 at ETH rate of $450, $405, $364.5 (Step between orders is 10%)
Eth rate goes down to $440, which means that first safety order went through and bot just bought 0.2222 ETH at the rate of $450 ($100/$450). But trader still needs to make $10 profit (5% from 200$ — current amount spent on position). Bot automatically moves TakeProfit from $550 to $497.4 (+5% from average purchase price in $474.7). If that order will go through, the trader is going to get 0.4222 ETH * $497.4 = $210. Trader reaches his goal of $10 profit.
If the price goes down until next safety-order, the bot is going to repeat same actions as in the previous step.
At first glance, this looks like a very simple trading technique especially if you know most bots use complex TA algorithms to define entry and exit positions however this method is very effective if you take small profits and using a bot you can do many small profit takings which quickly adds up.
I did a few tests with the bot with very small amounts just to test the concept and you can see some of the targets took a few hours to reach others were reached within minutes.
Another good thing about this technique is that you can limit the number of simultaneous trades exposing only a small part of your assets at the same time. This type of trading is less vulnerable to BTC swings since most of your money will just stay in BTC and the averaging down will make sure you never sell at a loss.
However to avoid building up bags of averaged down coins eating up your BTC you need to have access to coin-pairs that do very well, in other words, coins that have good volume going on & are up-trending. 3commas takes care of this by integrating TradingView’s Crypto Signal Finder directly into their interface offering you to pick and setup trading-pairs with high potential for good returns.
Another interesting feature of 3commas is their SmartTrade feature, that allows you to manually place trades with a stop loss, profit target and trailing stop-loss. The neat thing IMHO about their implementation of trailing stop is that it activates automatically (if enabled) once your profit target is reached while keeping your target price as a minimum.
This site is definitely on its way to become a major contender to some of the more established bots out there and the features it implements are very well thought out. However, if you’re looking for a bot that has more features when it comes to TA strategies or integration of signals I’d recommend taking a look at Cryptohopper. If you want a system that manages your portfolio and has a sophisticated manual trading interface and a minimal yet powerful bot, then 3commas might be what you are looking for.
Their pricing offers a free trial
If you want more info on how to use 3commas have a look at the article below where I go over the most important features:
3commas — trading bot: How to use it?
At first, 3commas might seem a bit overwhelming and intimidating because all of the options it offers but let’s just go…
The above references an opinion and is for information purposes only. It is not intended to be investment advice and may contain affiliate links. Seek a duly licensed professional for investment advice.