How to create a bot using common indicators built into 3Commas?

Introduction

So, you might be wondering how to create a bot to trade one of your favorite altcoins using one of the technical analysis indicators built into 3Commas? Well, we bring to your attention a guide on this topic.!

In this article, you will learn how to create an altcoin trading bot and use perhaps the most famous and respected indicator in the trading world – RSI (Relative Strength Index).

The RSI displays a value (usually in the form of a line chart) that indicates whether an asset is overbought (usually when it reaches levels above 70-80) or oversold (usually when it falls below 20-30 levels). When the RSI rushes towards these indicators, asset prices are known to reverse, sometimes only for a temporary “bounce”. It is these reversals that we will aim to catch with the help of our DCA-Bot..

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, this will allow you to trade one pair of coins.

In our example, we will select the LTC / USDT pair, we will also place 3 safety orders and $ 150 funds per trade.

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, and also select Plain in the bot type settings:

As an example, we will select “LTC / USDT” from the section Couples, however, you can select any pair from the dynamic section Recommended pairs; these are coins that are dynamically updated according to the most traded pairs on 3Commas in the last 24 hours. In addition, you can choose any pair using your own criteria, such as high trading volume, a daily candle closing above the 200-day moving average (200MA) rising, or pending a positive news event for the coin you were following:

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

We will use the strategy LONG, because we want to buy coins at a low price and sell them at a higher price in order to make a profit. 

We will accept profit setup Quote and we will make profit in USDT. 

If this is one of your first bots, then it might be worth saving the amounts starting and safety orders at 10 USDT, this bot will use 150 USDT in total if all DCA / safety orders are used. 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, 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 trade for the selected coin. We will use the trigger for an RSI-7 value less than 20 on the 5 minute timeframe. This should allow the bot to open a trade in the event of a sharp drop in LTC / USDT buying pressure pushing the price down. We will strive to quickly and frequently “scalp” small profits each time this condition is met. These trades should be fast and frequent enough, as they are used on the low timeframe of the chart:

If you are interested in visualizing the opening of trades by a bot, please pay attention to the final of this guide, where we will show you how to add the RSI indicator to the chart so that you can view its values..

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. we we will not use Trailing Take Profit for this bot. Please set the value Target profitability equal 0.5%, and the value Profitability calculationAs a percentage of the total volume, since we would like the profit to be 0.5% of the average price of coins bought by this bot:

we we will not use the Stop Loss settings for this bot. It is recommended to keep reserve funds in the account to help manually “redeem” the bot’s trades, which may result in a loss.

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 “sink” down to -10% of the purchase price.

With this bot we will use 3 Safety orders, and the same Number of simultaneously active safety orders; this ensures that the funds required for Safety Orders will always be reserved and cannot be accidentally spent on another trade and entered into a book order 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 by 0.5%. Install Safety order volume multiplier on 2; this means that the number of coins purchased through the safety order will double every time a new order is created. This will help to significantly reduce the average cost of each coin bought by the bot..

Install Safety order step multiplier on 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 3.5% drop in the price of the coin after opening a trade and means that we can profit faster:

We will not install Additional settings for this bot, since at the moment they are not needed.

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 a given 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 to support bots in manual mode).

On the page Table will reflect the amount of funds during installation 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 exactly how the safety orders will be used.

Outcome

Just a few days after its creation, the bot’s results look promising! By the way, you can easily find the bot itself by following this link!

And if you haven’t tried our platform yet, it’s time to do it!

Sign up to 3Commas and get 3 days of free access to all features, as well as a 50% discount when buying an annual subscription!

The publication may contain analytics and forecasts of the cryptocurrency market, which are associated with high risks. The information is presented for informational purposes only and should not be construed as a recommendation to buy or sell assets. You need to do your own thorough research before making any investment decisions. All risks, losses and expenses associated with investing, including the complete loss of the main deposit, are your responsibility.

Mike Owergreen Administrator
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