Getting Started with a Bitsgap COMBO Bot for Futures Trading
COMBO Bot for futures trading
Bitsgap’s trend-following bot combines Grid and DCA algorithms to operate on Futures trading. The bot utilizes the full potential of Grid technology to execute trades on every market move. Whereas DCA is the ultimate solution to apply the dollar-cost-averaging effect to optimize the entry price.
The COMBO Bot can follow the trend in both directions and generate returns endlessly, as both grid and DCA levels are automatically placed by the bot’s built-in trailing function. The automated trailing of the Stop-Loss follows the trend and hence secures generated returns.
Bot parameters & definitions
- Long - trading mode to generate returns as the price of a coin rises.
- Short - trading mode to generate returns as the price of a coin falls.
- Initial margin - the minimum required margin amount to launch the bot.
- Upper price - the initial upper limit price of the bot’s trading range.
- Lower price - the initial lower limit price of the bot’s trading range.
- DCA and grid step - the gap between the orders in percentage (minimum 0.1%, maximum 2%).
- DCA + grid levels - a total number of DCA and grid levels (10 - 40).
- Leverage - increased exposure to a coin with the use of borrowed margin. Your leverage can be 10x, meaning that the ratio of your margin to borrowed funds is 1/10.
- Cross margin - your entire balance is the margin to cover the position.
- Isolated margin - limited margin from your balance.
- Take Profit (optional) - a set price level at which the bot stops trading by closing the position and fixing the return.
- Stop-Loss (optional) - a set price level at which the bot stops trading by closing the position and fixing a loss. Stop Loss is trailing by default.
Additional information
- Maximum position - the maximum leveraged position opened by the bot.
- Maximum margin - the maximum amount of margin to be used by the bot.
- 1st order - the first order volume that opens the position.
- DCA orders - the amount and value of DCA orders.
- Grid orders - the amount and value of grid orders.
Example of editable parameters
- Number of grid levels 10-40
- Minimum bot step 0.1% (grid space), maximum 2%
- Bot’s leverage 1-10x.
- The bot has a default Trailing up and down, so it may increase the initial size of the investment. But no more than 3 times the initial value. The sole purpose of this logic is to allow traders to generate more returns as the price moves in a predicted direction and adjust the entry price if the price moves in the opposite way.
|
Number of grids |
Minimum DCA and grid step % |
Maximum DCA and grid step % |
Available Leverage |
Default settings |
|
10 - 40 |
0.1% |
2% |
1x - 10x |
Trailing Up and Down |
How is the bot launched, and how does it work?
1. After the activation, the bot uses 50% of the investment multiplied by the leverage to open a position. Depending on the type of bot, it will be a Short or Long position. The remaining 50% volume is used for DCA orders.
Attention
If the price goes beyond the initial trading range, then the bot can set additional orders by using an extra margin of up to 3x from the user's available balance.
|
Investment |
Leverage |
Bot type |
Current price |
Start position size |
|
$1000 |
10x |
Long |
$1700 |
2.9411 ETH |
How is it calculated?
-
($1000 / 100) x50 = $500 (half investment)
-
$500 x 10 (leverage) = $5000 (position volume)
-
$5000 / $1700 = 2.9411 ETH (position size)
2. Once a position becomes active, the bot will place a group of Take Profit orders, which will reduce the position (for the Short bot, it is buy orders, and for the Long bot, it is sell orders).
3. The remaining 50% of the investment will be distributed in the form of DCA averaging orders. DCA orders are always of the same type as the position.
For example, if the position is Long (buy), then DCA orders will also be indicated as green buy orders. If the position is Short (sell), then they will be indicated as red sell orders. When the bot executes a DCA order, it increases the size of the position and adjusts your entry price - the dollar-cost averaging effect.
4. The entry price of a position is the average purchase price (for the Long bot) or average sell price (for the Short bot) of the futures contract. The entry price will always fluctuate from executing orders that increase your position in size, as well as when the Trailing Up or Down takes place.
5. If the entire position is sold out in profit, the bot will use 50% of the investment to open a new set of DCA and grid levels around the current price.
6. Take Profit and Stop-Loss are always executed at the specified price.
For the Short bot, the Take Profit will always be at the bottom and Stop-Loss at the top since the Short-sell strategy aims to profit from a market decline.
For the Long bot, the Take Profit will be at the top and the Stop-Loss at the bottom since the Long-buy strategy aims to profit from a market rise.
Combo Bot's common scenarios
1. On Swings
If the price moves up, the price of the base currency increases (in BTCUSDT, the base is BTC). The bot will change orders to follow the rally. The total value of orders in the quote currency remains unchanged, but the volume of the base currency diminishes as the price increases.There is a possible situation when the size of the order in base currency shrinks to a value that is below the minimum order size required by your exchange. In this case, the system will continue to place orders, but their volume will be equal to the minimum required by your exchange. It means that the bot will go over your initial investment and start taking extra funds from your available futures balance.
2. Increase in position’s volume
If the price went in the opposite direction, for instance: If you have anticipated the trend to move upwards and you launched the Long bot, but instead, the price went down. In this case, only DCA (averaging orders) will be filled by the bot, and the orders set for taking profit (sell orders for Long bot) will remain open.
The bot will start increasing the position size until the moment when the volume of a position becomes more or equal to the Initial size of a position x 3 - when this happens, the bot will cancel all further averaging orders and will wait for the price to move above your P&L threshold and execute at least some orders for taking the profit.
New averaging orders (DCA) will be created as soon as the bot sells (for long) or buys (for short) enough of the base currency.
How to start a COMBO Bot?
Attention
Buying, selling, holding, and partaking in the futures trading of cryptocurrencies are activities that are subject to high market risk. The volatile and unpredictable nature of the price of cryptocurrencies may result in a significant loss. Bitsgap is not responsible for any loss that you may incur from price fluctuations or bot work when you buy, sell, hold, and leverage cryptocurrencies.Get stuck? Ask your question to our community on Telegram!