- Trading Bots
- DCA Futures Bot
- Getting Started with the Bitsgap DCA Futures Trading Bot
Getting Started with the Bitsgap DCA Futures Trading Bot
Introduction
Dollar-cost Šveraging (DCA) is a strategy designed to divide your investment among periodic buy or sell trades to get a better average entry price. This allows you to reduce the impact of volatility and price change on the overall position.
The main idea behind the DCA Bot is to repeatedly buy or sell small amounts of coins at different prices. This approach minimizes the market impact on your open position.
Our DCA Futures Bot is a powerful tool that utilizes the DCA strategy to its fullest potential. Tailor-made for futures trading, the DCA Futures Bot offers a great opportunity to generate returns in a relatively short period of time by using the leverage provided by your exchange.
If you are unfamiliar with how the DCA Bot operates, we highly recommend checking out our comprehensive guide to spot trading: Getting Started with the Bitsgap Dollar-Cost Averaging (DCA) Trading Bot. This article provides a step-by-step overview of the botās functionality for trading on spot market and offers valuable insights into how to make the most out of this powerful trading strategy.
Why should I choose the DCA Futures Bot?
Our DCA Futures Bot has the potential to become a game-changer for you. Here is a list of the powerful features it offers:
- Position Averaging - by buying or selling an asset at different price levels, the bot adjusts its entry price and reduces the impact of market fluctuations. Even if the price moves in an unfavorable direction, averaging helps to minimize losses, adjust the average position price, and capture profits more efficiently when the price reverses.
- Futures Market Flexibility - one of the key advantages of the DCA Futures Bot is its ability to operate in the futures market. This provides you with the opportunity to profit from both rising and falling trends, allowing you to adapt your strategy to any market situation. With the flexibility offered by futures trading, you can capitalize on various market conditions.
- Cycle Operation - unlike the COMBO Bot, the DCA Futures Bot works in cycles. Each cycle begins with the bot opening a position, followed by position averaging if the price moves against the initial position. The cycle concludes with the bot closing the position using a Take Profit or a Stop Loss order. Afterward, the bot reopens positions and repeats the cycle. This cycle-based operation provides you with greater flexibility when setting up your trading strategy.
- Leverage - you can take advantage of the leverage provided by your exchange. It enables you to increase the position volume and maximize potential profits. However, itās important to exercise caution and understand the risks that come with using leverage.
Attention
Higher leverage carries an increased risk of losses and position liquidation. While futures trading can yield excellent results, it is crucial to manage risks accordingly and choose a leverage level that is reasonable for your risk tolerance.
Taking advantage of the DCA Futures Botās unique features, you can enhance your trading experience, optimize your profits, and navigate through the dynamic world of futures trading with confidence and precision.
When can I use the DCA Futures Bot?
- Launch Long DCA Futures Bot in a Bullish Market
- In a bullish market, start the Long DCA Futures Bot. This strategy aims to capitalize on rising prices.
- As the price of the asset increases, the bot will lock in profits by selling a portion of the position.
- If the price experiences a temporary drop, the bot will take advantage of the opportunity to increase its position, aiming for a better entry price.
- By strategically adjusting the position and taking advantage of price fluctuations, the bot aims to optimize profits and navigate the bullish market effectively.
2. Launch the Short DCA Futures Bot in a Bearish Market
- In a bearish market, start the Short DCA Futures Bot. This strategy is designed to generate profits when prices decline.
- If the price of the asset decreases, the bot will generate profits by reducing a portion of the negative position.
- However, if the price starts to rise, the bot will average its position by strategically buying more of the asset.
- The bot will continue to monitor the price. Based on the settings, it will close the position at a profit when the price goes down again.
- By adapting to the bearish market conditions and effectively managing the position through averaging, the bot aims to optimize profits and navigate the market with confidence.
By utilizing the Long and Short DCA Futures Bots in their respective market scenarios, you can take advantage of price movements and increase your potential for profits while minimizing losses. These strategies enable you to actively engage in the market and make strategic decisions based on the prevailing market conditions.
How to start the DCA Futures Bot?
1. Select a bot type
To set up a new DCA Futures Bot, click the [Start new bot] button located in the top menu of the Bots page.
You will see a pop-up window displaying all available bots. Switch to the Futures section and select DCA Futures Bot.
2. Customize the bot settings
On the right side of the screen, you will find a menu to configure your first DCA Futures Bot. Here, you can choose the exchange, trading pair, and investment amount, as well as set advanced settings to customize your strategy.
2.1. Select the exchange and trading pair
Start by selecting the exchange and trading pair. Click on the āExchangeā field to choose your exchange. Then, proceed to the āPairā field and select your preferred trading pair (in Futures language: contract).
2.2. Select the Long or Short direction
Next, choose the strategy for your DCA Futures Bot: Long or Short.
- Long - the bot opens a buy position and closes it (fills a sell order) when a price rises to a chosen value, generating profit in the quote currency.
- Short - the bot opens a sell position and places a buy order below it. When the price falls and triggers a Take Profit order, the bot buys the base currency for less quote currency at a lower price. The quote currency remaining after the Take Profit order execution is your profit.
2.3. Specify the initial margin
Enter the initial margin you would like to operate with or use the slider to specify the percentage based on your balance. This represents your investment, excluding the leverage that will be allocated for trades from your available balance.
The Available for bot use window displays the amount of USDT available for starting the bot.
Note
The maximum investment amount is 95% of the available balance, considering all funds reserved for other bots.
2.4. Set the leverage and select the margin mode
Set the leverage and margin mode according to your preferences.
Leverage - determines how many times your initial investment is multiplied. The DCA Futures Bot allows leverage options ranging from 1x to 10x. Keep in mind that higher leverage means higher risk, especially in the volatile crypto market.
Margin mode - choose between Cross and Isolated modes.
- Cross considers the entire balance (excluding isolated margin positions) to maintain the position. It allows sharing margin balances across different positions and potentially prevents early liquidation. However, in case of liquidation, you may lose the entire margin balance, along with all remaining positions.
- Isolated considers only the isolated margin balance, initially equal to the position volume without leverage. If a position is liquidated in Isolated mode, only the isolated margin balance is lost. However, this margin mode carries a higher risk of liquidation and is better suited for more speculative positions.
Attention
If your exchange supports various Position modes, make sure to set the One-way mode in the futures trading settings to start your bot successfully. If the Hedge Mode is chosen, the system will display a configuration error.
2.5. Enable additional Take Profit and Stop Loss settings
You can also customize advanced settings in the "Manual Adjustment" section. For example, adjust the Take Profit level and enable the Stop Loss feature in the āPosition TP&SLā settings.
Take Profit (TP) - an order that closes the position and locks in the profit. You can set a Regular Take Profit that fills at a specified price change percentage or a Trailing Take Profit that follows the current price at a certain distance in a favorable direction, closing the position when the price reverts. Choose the condition the TP level is based on: average price, average price + indicatorsā signal, base order price, or base order price + indicatorsā signal.
Stop Loss (SL) - prevents further losses and closes the position when the price moves in the opposite direction. The Stop Loss level is calculated based on the weighted average position price. It closes the position by placing and filling a market buy or sell order, depending on the selected strategy (Long or Short).
Important information
Before proceeding, we recommend reading and following our suggestions to ensure your bot operates properly and aligns with your goals!
- The DCA Futures Bot cannot be started if there is an active Combo Bot, an open position, or a limit order on the same trading pair.
- To prevent bot errors or early liquidation, it is important to avoid manual trading on the same pair where the bot operates.
- Once the bot is launched, there is no option to change the Margin Mode settings. Even if you adjust them directly on the exchange, the bot will attempt to return to the initial settings.
3. Backtest
You can evaluate the botās performance based on historical market data for a selected period by conducting a Backtest. This feature helps you understand and optimize your bot settings for the chosen trading pair. To initiate backtest, click the [Backtest] button.
In the pop-up window, you will see the calculated bot results (Bot Profit) with the current settings for the past 30 days (default period), as shown in the example below.
Additionally, we recommend checking our Strategies section to set up and start your first DCA Futures Bot quickly and effortlessly. The widget displays a list of high-performing trading pairs based on their monthly backtest results.
You can filter the recommended strategies by backtest period (3 days, week, and month), availability, direction, and profit.
Attention
Backtest results show how a bot could have performed in the past. They are not a forecast, and the actual outcome may differ from the backtest results.
Once everything is set up, and you are ready to proceed, click the [Continue] button.
4. Review and confirm the settings
This is the final step before launching the bot. Take a moment to review all the selected settings.
Preview settings
- Bot type
- Exchange
- Pair
- Strategy
- Margin mode
- Leverage
- Investment (with and without the leverage)
- Base order settings (size, type)
- DCA orders settings (size, quantity, step)
- Amount and Step multipliers
- Take Profit and Stop Loss details (price change percentage, mode, order type)
- Risk management tools
If any changes need to be made, click the back arrow. Otherwise, click the [Start Bot] button to launch the bot.
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