How to create a DCA Futures Bot using signals built into 3Commas? Read more…

Introduction

In this article, we will show you how to create a DCA futures bot that will launch new trades using the built-in screener buy signal. TradingView.

For this tutorial, we will be using the popular exchange Bybit futures for frequent scalping small profits with leverage Cross, as well as built-in signals to buy the TradingView screener on multiple timeframes.

If you are interested in how the Buy / Sell signals of the TradingView screener are generated, you can read more about it. here, signals for 3Commas bot users are provided by a screener “Ratings” from TradingView, which is generated from the following technical analysis indicators: 

Parabolic SAR, Bollinger Bands, MACD, Momentum, Awesome Oscillator, Average Directional Index, Commodity Channel Index, Stochastic, Relative Strength Index and, finally, Simple & Exponential Moving Averages.

If each of the above 10 individual indicator conditions is true, for example, the MACD is above the signal line or the chart price is above the EMA and SMA, then the indicator’s result is evaluated as 1 (or “positive”). The values ​​are summed up, and if, for example, we end up with a value of 7 or higher, then this indicates a buy signal.

SМА is the arithmetic average of the closing prices of the instrument for a certain period.

EMA – Moving Average, which displays the average price of a financial instrument over a certain period of time.

Choosing a contract for trading

For this guide, we will choose the EOS / USD inverse contract as it recently tried to break the 200-day EMA resistance on the 4-hour timeframe before finally hitting it on November 16 and started an uptrend after breaking the last local high provided on the chart. In addition to this, Bitcoin / USD is also showing an uptrend, which is a good sign for altcoins in pairs against the dollar, as the tide is known to lift all boats:

This strategy should be considered high risk, just like any futures or spot transactions..

You will need to keep an eye on the charts, and if the price falls below the 200-day EMA, then you may want to stop the bot until the price breaks above this indicator again..

This bot was created to trade 150 EOS coins that were sent to the EOS wallet on the Bybit exchange. We will use small orders and a scalp cross leverage of 0.75% profit on each successful trade to accumulate more EOS with the EOSUSD reverse contract on Bybit.

We will configure the bot so that it uses safety orders and can cover a sharp drop in the price of EOS up to 30% without liquidation.

Since this bot will use the Cross leverage, any profit received and left on the exchange account will increase your trading funds and help prevent possible liquidation in the future..

In the future, you may want to better control and soften the possibility of liquidation, by regularly withdrawing certain profits in excess of 175 EOS to another wallet or exchange account.

Bot creation

Go to the main menu and select the tab DCA-Bot, and then press the button Create a bot:

We will create a “Simple” bot, as all futures bots can trade only one contract.

Make sure the tab is selected at the top of the page Advanced and that you chose the Title (Name) for your bot (it will be displayed in the journal, as well as in the My deals section and on the DCA-Bots page), select the exchange account (Stock exchange), the funds from which the bot will use:

Now we will look at the section settings Strategy; in this case the default settings are fine.

We will use LONG (3) since we want to buy coins at a low price and sell coins at a higher price to make a profit.

We only have one Quote option (QUOTE) as the currency in which we would like to make a profit, since this is a reverse contract, all profit will be accumulated in EOS. 

If this is one of your first bots, it might be worth keeping volumes starting and safety orders (4) below, however for this example, we will use 30 EOS as the volumes of both orders, these amounts are the actual sizes of orders placed on the exchange, including Cross (6) lever arm x50; this actually means that only 0.6 EOS of your trading funds will be used to place the start order and 0.6 EOS for the first safety order. 

In total, this bot will use about 7,355 EOS of your no-leverage funds if all DCA / Safety Orders are involved. As you gain more confidence in the strategies used, you may want to increase the level of risk per bot trade..

It is recommended to keep the type of the start order at the indicator Limit (5), as this ensures that the bot will open trades without price slippage, which is especially important when trading coins with low liquidity:

Next, we will set the condition for starting the deal this setting will tell the bot when to open a new deal for the selected coin. We will use signals TradingView Buy (7), as discussed earlier, on multiple timeframes. This should allow our bot to start new trades when the price of EOS rises, as we will strive to quickly “scalp” profits in small chunks. These trades are carried out on low timeframes, so they must close quickly and occur frequently enough:

You can view signals “Rating”  by TradingView here. To view the individual current rating, you will have to change each time interval to the one you selected in the section “Terms of the start of the transaction”.

Now we will set the parameters Take profit on our bot; we aim for repetitive short trades. Since “scalping” charts with a low time frame is quite risky, the key is to strive to close all trades as quickly as possible. Set the Target profitability value to 0.75% (8), and the value Calculation of yield – As a percentage of the total volume (9), since we would like the profit to be 0.75%, of the average price of coins bought by this bot:

We will not use settings Stop Loss for this bot, since we will rely on covering a significant price drop on the chart with safety orders (averaging the cost in dollars). Note: Trading on the futures exchanges is inherently risky, and while the returns can be quite high, it is important to keep the risks in mind. If the price of EOS drops sharply, you could be liquidated and lose your funds.

If you would like to use Stop Loss settings, please test them thoroughly with a Paper Trading account, however, the cryptocurrency market is known for its high volatility, so you may find that Stop Loss can actually increase your losses when compared to choosing quality charts. quickly recovering coins, even if they “sag” relative to the purchase price.

In this example, we will use 6 safety orders and set the value number of simultaneously active safety orders (10) by 2; this ensures that the funds required for 2 simultaneous safety orders will always be reserved in advance in the exchange order book as Limit Orders. 

Safety orders are used to reduce the average price of coins bought by a bot in the event of a price drop after opening a deal; it is also called DCA or Dollar Cost Averaging.

For the first used safety order, set Price deviation for placing a safety order (11) by 0.5%; Install Safety order volume multiplier (12) by 1.25; this means that the number of coins purchased through the safety order will increase by 25% with the creation of each subsequent order. This will help lower the average cost of each coin bought by the bot..

Install Safety order step multiplier (12) by 2; this means that the bot will double this value starting from the first price deviation and the execution of the safety order. Basically, our first safety order will be placed 0.5% below the trade opening price (start order), the second safety order will be placed 1% lower, and the third one 2% lower. This covers a 31.5% drop in the price of the coin after opening a trade and means that we can profit faster:

It is recommended to check the chart of the contract you are going to trade, find the last “high” of the price reached on the daily or weekly chart, specify a value in the range of 10% -15% below this value and enter it in the column Maximum trade open price (13) on the Advanced Settings page. The reason for this is to avoid the bot creating trades “at the top” of the trend, as these are typical points at which the price can reverse. You will have to manually check the chart periodically and evaluate whether to increase this value and let the bot continue to create trades as the price moves above the set point. If the price still breaks the previous high and the movement is confirmed, then you can raise this value to the next logical point, in accordance with your Technical Analysis.

We can check the amount of funds that our bot will use by looking at the tab Assistant (right) – please don’t miss this feature – it’s very useful!

In the window Assistant it will show how much money this bot will need to work correctly with the configured parameters, as well as the maximum price drop that your insurance deals can cover and the percentage of available free funds that the bot will use (always try to keep enough funds when trading with Cross leverage, as available funds will be used to avoid liquidation of your open position):

On the page Table the amount of funds during installation will be reflected Safety order volume multiplier, as well as the percentage of price variance that will be covered Safety order step multiplier.

Finally, one of the most useful features is the page Table shows in detail how the safety orders will be used.

Outcome

Just a few days after its creation, the bot’s results look promising! By the way, here you can always find our configured bot.!

Note: Trading on the futures exchanges is inherently risky, and while the returns can be quite high, it is important to keep the risks in mind. If the price of the asset you are trading drops sharply, you could be liquidated and lose your funds.

Mike Owergreen Administrator
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