Trading Bots 101: Multiple Bots to Master the Markets.
Trading Bots 101: Multiple Bots to Master the Markets.
If you are a trader in the cryptocurrency markets you need to be aware of trend at all times and aim to trade proactively and with good risk management.
It has been highly profitable for myself and many of our STP community members to trade via automated cryptocurrency bots using software such as 3Commas, Profit Trailer, WickHunter, TVC, etc.
In this post I aim to break down a few different strategies of trading bots that I have been using over the past few years.
I will break them down via Market direction, and include some extra information that may be helpful for you as a trader.
To be successful in these markets you need to have strategies that work in each market direction to ensure you can produce profits no matter what happens.
First let us start by breaking down market trends. You can go into great depth in identifying market trends however I will keep this simple by identifying trend in 3 simple ways:
**-Clear Uptrend**
"An uptrend describes the price movement of a financial asset when the overall direction is upward. In an uptrend, each successive peak and trough is higher than the ones found earlier in the trend."
investopedia.com/terms/u/uptrend.asp
Clear Uptrends can be identified in multiple ways. Simple ways to identify uptrends include moving averages (MA/EMA) crossing UP, signals or indicators pointing towards "Buy", price heading higher including higher highs and higher lows, etc.
Successful traders will look at multiple timeframes for confirmation of the uptrend's strength and will weigh the strength of the trend based on the agreement of multiple signals.
For instance, an uptrend with the 1HR and 4HR in agreement will be of higher significance as compared to an uptrend identified from the 15M and 1HR charts respectively.
15M + 15H chart LONG = slight uptrend however not confirmed.
1H + 4H chart LONG = strong uptrend after confirmation of 4hr long.
Trading in a clear uptrend will be very profitable utilize trading strategies that trade with the uptrend, ie LONGS ONLY.
**-Clear Downtrend**
"A downtrend refers to the price action of a security that moves lower in price as it fluctuates over time."
investopedia.com/terms/d/downtrend.asp
Clear Downtrends can be identified in multiple ways. Simple ways to identify downtrends include moving averages (MA/EMA) crossing DOWN, signals or indicators pointing towards "Sell", price heading lower including lower highs and lower lows, etc.
Successful traders will look at multiple timeframes for confirmation of the downtrend's strength and will weigh the strength of the trend based on the agreement of multiple signals.
For instance, a downtrend with the 1HR and 4HR in agreement will be of higher significance as compared to a downtrend identified from the 15M and 1HR charts respectively.
15M + 15H chart SHORT = slight downtrend however not confirmed.
1H + 4H chart SHORT = strong downtrend after confirmation of 4hr long.
Trading in a clear downtrend will be very profitable utilize trading strategies that trade with the downtrend, ie SHORTS ONLY.
**-Chop or Consolidation**
"Consolidation in technical analysis refers to an asset oscillating between a well-defined pattern of trading levels. Consolidation is generally interpreted as market indecisiveness, which ends when the asset's price moves above or below the trading pattern."
investopedia.com/terms/c/consolidation.asp
Chop or Consolidation can be identified in multiple ways. Simple ways to identify chop or consolidation include indecisiveness of any moving average (MA/EMA) for trend, indecision of signals or indicators (no clear Buy or Sell), and with price respecting a trading range made of a lower range and an upper range. Trading volume may be lower in these areas.
Successful traders will look at chop or consolidation periods as a means to identify the next trend and prepare for it meanwhile trading the current range's volatility both long and short.
15M Long and 1H Short = chop or no clear trend
1H Short and 4H Long = chop or no clear trend
Trading in chop or consolidation will be very profitable utilizing trading strategies that focus on the volatility of the range, ie LONG and SHORT based on price movements.
**Once you have identified the market trend, you can implement profitable trading strategies.**
-Clear Uptrend:
Traders should focus on running long only trading bots.
Long scalper bots can be setup on low timeframe charts such as the 1M/5M/15M etc for quick firing deals as coins head higher. These should be setup with a low take profit (0.2-1%) and DCA in case of volatility. Conditions for entry can include BUY signals on 1/5/15M charts. Exit can be take profit or SL on trend change.
Long swing bots can be setup on higher timeframe charts such at the 30M/1H/4HR etc to catch the full moved of trending coins. These bots should be setup with a higher take profit to catch the majority of the movement upwards (ie 5-20% take profit). Conditions for entry can include BUY signals on 30M/1HR/4HR charts. Exit can be take profit based on bot setting or exit based on trend change "SELL" signal.
Counter trading long bots can be setup to "long the dumps" when in a clear uptrend. These bots can be very helpful to capture profits on dip days during an uptrend. My list of counter trading long bots include QFL/RSI/WickHunter based bots that aim at longing coins just prior to their reversals. An example would be a simple RSI bot longing coins when RSI is oversold under 15 on a 15 or 30M chart.
Counter trading short bots can be setup to "short the pumps" when in a clear uptrend however need to be set well as this is the riskiest bot to run as it is against the clear uptrend. My list of counter trading short bots includes the WickHunter bot that shorts coins based on a coin's price being away from its VWAP by a certain percentage and a liquidation occurring. As stated earlier this is the riskiest bot of the bunch for a clear uptrend and so it needs to be set as low risk as one possibly can.
In general, traders will want to focus a good portion of their capital on running long only trading bots with the clear uptrend. Majority should be with trend, however the use of counter trading long bots can ensure traders profit on dump days during an uptrend.
Traders should lower risk on any SHORT bots in clear uptrends to avoid risk of loss or liquidations.
-Clear Downtrend
Traders should focus on running short only trading bots.
Short scalper bots can be setup on low timeframe charts such as the 1M/5M/15M etc for quick firing deals as coins head lower. These should be setup with a low take profit (0.2-1%) and DCA in case of volatility. Conditions for entry can include SELL signals on 1/5/15M charts. Exit can be take profit or SL on trend change.
Short swing bots can be setup on higher timeframe charts such at the 30M/1H/4HR etc to catch the full moved of trending coins. These bots should be setup with a higher take profit to catch the majority of the movement downwards (ie 5-20% take profit). Conditions for entry can include SELL signals on 30M/1HR/4HR charts. Exit can be take profit based on bot setting or exit based on trend change "BUY" signal.
Counter trading short bots can be setup to "short the pumps" when in a clear downtrend. These bots can be very helpful as they will short "fakeout tops" for you during a downtrend. My list of counter trading short bots includes the WickHunter bot that shorts coins based on a coin's price being away from its VWAP by a certain percentage and a liquidation occurring.
Counter trading long bots can be setup to "long the dumps" when in a clear downtrend however need to be set well as these are the riskiest bots to run as they are against the clear downtrend. My list of counter trading long bots includes QFL/RSI/WickHunter based bots that aim at longing coins just prior to their reversals. As stated earlier these are the riskiest bot of the bunch for a clear downtrend and so they needs to be set as low risk as one possibly can.
In general, traders will want to focus a good portion of their capital on running short only trading bots with the clear downtrend. Majority should be with trend, however the use of counter trading bots can provide additional profits on pump days during a downtrend.
Traders will want to lower risk on any LONG bots in clear uptrends to avoid risk of loss or liquidations.
-Chop or Consolidation
Traders should focus on running market neutral bots (long and short) to profit off the volatility of the range.
Long and short scalper bots can be setup to profit on the volatility of the market however the range should be monitored for range breaks and trend changes with these bots being adjusted prior to trend change. Example: turning off a short scalper prior to reaching the upper range.
Grid bots can be setup with upper and lower range targets to ensure traders can produce profits within the range. The trading range should be surveyed from the 1HR and 4HR charts to ensure the upper and lower targets are properly selected.
Counter trading long bots such as the QFL/RSI will do well in these ranges if there are market drops however may need to be monitored if the lower range breaks and the trend changes into a downtrend.
Counter trading short/long bots such as the WickHunter thrive in chop or consolidation periods and will produce high profits in these situations.
In general, traders will want to focus a good portion of their capital on running market neutral trading bots in chop or consolidation ranges. The use of long/short scalpers and grid bots can secure profits in an otherwise dull or boring market.
Swing style strategies should be completely off in chop or consolidation periods as there may not be enough volatility to ensure profits can be made.
Grid and counter trading strategies will produce the highest profits in these periods and should be used.
Alerts should be set below the upper and lower ranges to ensure a trader is aware of potential range breaks and or trend change to be proactive.
I hope you have enjoyed reading my post on the multiple bots and bot strategies that I utilize in my own personal trading arsenal.
Please leave me any comments below if you believe I am missing anything or drop me a message if you have any other solid strategies that we should pay attention to.
Please do not hesitate to join our Discord and come chat trading bots, we have automated most of our strategies so that they run 24/7 for us.
Thanks for reading
With love,
STP Todd
If you are a trader in the cryptocurrency markets you need to be aware of trend at all times and aim to trade proactively and with good risk management.
It has been highly profitable for myself and many of our STP community members to trade via automated cryptocurrency bots using software such as 3Commas, Profit Trailer, WickHunter, TVC, etc.
In this post I aim to break down a few different strategies of trading bots that I have been using over the past few years.
I will break them down via Market direction, and include some extra information that may be helpful for you as a trader.
To be successful in these markets you need to have strategies that work in each market direction to ensure you can produce profits no matter what happens.
First let us start by breaking down market trends. You can go into great depth in identifying market trends however I will keep this simple by identifying trend in 3 simple ways:
- -Clear Uptrend (price heading higher)
-Clear Downtrend (price heading lower)
-Chop or Consolidation (price staying stagnant and not moving much)
**-Clear Uptrend**
"An uptrend describes the price movement of a financial asset when the overall direction is upward. In an uptrend, each successive peak and trough is higher than the ones found earlier in the trend."
investopedia.com/terms/u/uptrend.asp
Clear Uptrends can be identified in multiple ways. Simple ways to identify uptrends include moving averages (MA/EMA) crossing UP, signals or indicators pointing towards "Buy", price heading higher including higher highs and higher lows, etc.
Successful traders will look at multiple timeframes for confirmation of the uptrend's strength and will weigh the strength of the trend based on the agreement of multiple signals.
For instance, an uptrend with the 1HR and 4HR in agreement will be of higher significance as compared to an uptrend identified from the 15M and 1HR charts respectively.
15M + 15H chart LONG = slight uptrend however not confirmed.
1H + 4H chart LONG = strong uptrend after confirmation of 4hr long.
Trading in a clear uptrend will be very profitable utilize trading strategies that trade with the uptrend, ie LONGS ONLY.
**-Clear Downtrend**
"A downtrend refers to the price action of a security that moves lower in price as it fluctuates over time."
investopedia.com/terms/d/downtrend.asp
Clear Downtrends can be identified in multiple ways. Simple ways to identify downtrends include moving averages (MA/EMA) crossing DOWN, signals or indicators pointing towards "Sell", price heading lower including lower highs and lower lows, etc.
Successful traders will look at multiple timeframes for confirmation of the downtrend's strength and will weigh the strength of the trend based on the agreement of multiple signals.
For instance, a downtrend with the 1HR and 4HR in agreement will be of higher significance as compared to a downtrend identified from the 15M and 1HR charts respectively.
15M + 15H chart SHORT = slight downtrend however not confirmed.
1H + 4H chart SHORT = strong downtrend after confirmation of 4hr long.
Trading in a clear downtrend will be very profitable utilize trading strategies that trade with the downtrend, ie SHORTS ONLY.
**-Chop or Consolidation**
"Consolidation in technical analysis refers to an asset oscillating between a well-defined pattern of trading levels. Consolidation is generally interpreted as market indecisiveness, which ends when the asset's price moves above or below the trading pattern."
investopedia.com/terms/c/consolidation.asp
Chop or Consolidation can be identified in multiple ways. Simple ways to identify chop or consolidation include indecisiveness of any moving average (MA/EMA) for trend, indecision of signals or indicators (no clear Buy or Sell), and with price respecting a trading range made of a lower range and an upper range. Trading volume may be lower in these areas.
Successful traders will look at chop or consolidation periods as a means to identify the next trend and prepare for it meanwhile trading the current range's volatility both long and short.
15M Long and 1H Short = chop or no clear trend
1H Short and 4H Long = chop or no clear trend
Trading in chop or consolidation will be very profitable utilizing trading strategies that focus on the volatility of the range, ie LONG and SHORT based on price movements.
**Once you have identified the market trend, you can implement profitable trading strategies.**
-Clear Uptrend:
Traders should focus on running long only trading bots.
Long scalper bots can be setup on low timeframe charts such as the 1M/5M/15M etc for quick firing deals as coins head higher. These should be setup with a low take profit (0.2-1%) and DCA in case of volatility. Conditions for entry can include BUY signals on 1/5/15M charts. Exit can be take profit or SL on trend change.
Long swing bots can be setup on higher timeframe charts such at the 30M/1H/4HR etc to catch the full moved of trending coins. These bots should be setup with a higher take profit to catch the majority of the movement upwards (ie 5-20% take profit). Conditions for entry can include BUY signals on 30M/1HR/4HR charts. Exit can be take profit based on bot setting or exit based on trend change "SELL" signal.
Counter trading long bots can be setup to "long the dumps" when in a clear uptrend. These bots can be very helpful to capture profits on dip days during an uptrend. My list of counter trading long bots include QFL/RSI/WickHunter based bots that aim at longing coins just prior to their reversals. An example would be a simple RSI bot longing coins when RSI is oversold under 15 on a 15 or 30M chart.
Counter trading short bots can be setup to "short the pumps" when in a clear uptrend however need to be set well as this is the riskiest bot to run as it is against the clear uptrend. My list of counter trading short bots includes the WickHunter bot that shorts coins based on a coin's price being away from its VWAP by a certain percentage and a liquidation occurring. As stated earlier this is the riskiest bot of the bunch for a clear uptrend and so it needs to be set as low risk as one possibly can.
In general, traders will want to focus a good portion of their capital on running long only trading bots with the clear uptrend. Majority should be with trend, however the use of counter trading long bots can ensure traders profit on dump days during an uptrend.
Traders should lower risk on any SHORT bots in clear uptrends to avoid risk of loss or liquidations.
-Clear Downtrend
Traders should focus on running short only trading bots.
Short scalper bots can be setup on low timeframe charts such as the 1M/5M/15M etc for quick firing deals as coins head lower. These should be setup with a low take profit (0.2-1%) and DCA in case of volatility. Conditions for entry can include SELL signals on 1/5/15M charts. Exit can be take profit or SL on trend change.
Short swing bots can be setup on higher timeframe charts such at the 30M/1H/4HR etc to catch the full moved of trending coins. These bots should be setup with a higher take profit to catch the majority of the movement downwards (ie 5-20% take profit). Conditions for entry can include SELL signals on 30M/1HR/4HR charts. Exit can be take profit based on bot setting or exit based on trend change "BUY" signal.
Counter trading short bots can be setup to "short the pumps" when in a clear downtrend. These bots can be very helpful as they will short "fakeout tops" for you during a downtrend. My list of counter trading short bots includes the WickHunter bot that shorts coins based on a coin's price being away from its VWAP by a certain percentage and a liquidation occurring.
Counter trading long bots can be setup to "long the dumps" when in a clear downtrend however need to be set well as these are the riskiest bots to run as they are against the clear downtrend. My list of counter trading long bots includes QFL/RSI/WickHunter based bots that aim at longing coins just prior to their reversals. As stated earlier these are the riskiest bot of the bunch for a clear downtrend and so they needs to be set as low risk as one possibly can.
In general, traders will want to focus a good portion of their capital on running short only trading bots with the clear downtrend. Majority should be with trend, however the use of counter trading bots can provide additional profits on pump days during a downtrend.
Traders will want to lower risk on any LONG bots in clear uptrends to avoid risk of loss or liquidations.
-Chop or Consolidation
Traders should focus on running market neutral bots (long and short) to profit off the volatility of the range.
Long and short scalper bots can be setup to profit on the volatility of the market however the range should be monitored for range breaks and trend changes with these bots being adjusted prior to trend change. Example: turning off a short scalper prior to reaching the upper range.
Grid bots can be setup with upper and lower range targets to ensure traders can produce profits within the range. The trading range should be surveyed from the 1HR and 4HR charts to ensure the upper and lower targets are properly selected.
Counter trading long bots such as the QFL/RSI will do well in these ranges if there are market drops however may need to be monitored if the lower range breaks and the trend changes into a downtrend.
Counter trading short/long bots such as the WickHunter thrive in chop or consolidation periods and will produce high profits in these situations.
In general, traders will want to focus a good portion of their capital on running market neutral trading bots in chop or consolidation ranges. The use of long/short scalpers and grid bots can secure profits in an otherwise dull or boring market.
Swing style strategies should be completely off in chop or consolidation periods as there may not be enough volatility to ensure profits can be made.
Grid and counter trading strategies will produce the highest profits in these periods and should be used.
Alerts should be set below the upper and lower ranges to ensure a trader is aware of potential range breaks and or trend change to be proactive.
I hope you have enjoyed reading my post on the multiple bots and bot strategies that I utilize in my own personal trading arsenal.
Please leave me any comments below if you believe I am missing anything or drop me a message if you have any other solid strategies that we should pay attention to.
Please do not hesitate to join our Discord and come chat trading bots, we have automated most of our strategies so that they run 24/7 for us.
Thanks for reading
With love,
STP Todd
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