How to use the service if the coin, which you expected, slid down and turned to a "deep invest".
It happens: the cryptocurrency market is not always predictable, market players make mistakes in the trade not so rare. Instead of the growth of a coin, no matter what you do, it falls lower and lower.
“Short” is a tool if you “play for a fall”: bet that the price will fall. Binance does not provide it yet but you can use a short bot on Binance via 3commas.
The way short bot works
"Sell more expensive and buy the coin cheaper, the difference between these operations take as a profit."
How does it work:
- Sell part of your coins.
- Return order to buy this part.
- Set safety orders for sale in case the coin instead of the fall suddenly starts to grow.
- If the safety orders have worked, update the purchase order, if necessary, set new safety orders.
- If the purchase has worked, cancel all the safety orders and calculate the profit.
After watching the video, you will understand the key functions of the short-bot, and see the whole process of basic configuration:
If you prefer to read:
So, we have: 1000 ADA were bought at 0.00004 BTC:
After that, the price went downwards.
For a while, you hoped that this was a correction but losing 10% of the purchase price, you realized that it is an “investor”. In fact, it's just a time for the bot, which will earn you a profit while the price drops.
- Disadvantage: you will not sell the coin with a "plus" immediately, it will remain with you until a good moment for it.
- Advantage: it will not be useless for your account, slowly getting cheaper, it will bring income in BTC.
In order to make this, visit the service:
- Name the bot. In the title, it is better to specify the strategy "Short" or "Long." This is not necessary but will simplify the control process.
- Choose a pair. In our example with ADA, select BTC_ADA, our strategy is Short.
- Profit currency vs Quote Currency
With the Quote Currency you are increasing the coin you are trading in, in our example it is bitcoin: the profit will increase in BTC.
If we choose the Base Currency profit will grow in the traded coin, in our case it is ADA. Base Currency is needed if you believe in a coin, and want to have more ADA in your portfolio. So by the time the market starts to grow, you will have in ADA more than 1000 coins than when you’ve started.
In our example, we will choose in favor of Bitcoin as an “example of sustainability” of all cryptocurrencies, and the Quote Currency settings.
- Sizes of Base and Safety orders
Safety orders are needed for averaging. They work if the price rises instead of falling, and exceeds the purchase price by X%. In case of a shortcut, the bot sells more coins — this is how averaging occurs, it becomes possible to move the TakeProfit price closer, and close the deal without losing profit on the first break out.
Set the volume. It is logical to start with a minimum order of 0.001 BTC. Please note that although you “short” ADA, order sizes are in BTC. In our example, we will set 0.001 BTC for the volume of initial and safety orders.
- Target profit (%), as usual, depends on your “greed”. Let's today be "greedy" and put 1%, well, simply, because it is short, and the price usually falls faster than it grows.
- Take profit type, from what amount the bot will count the amount of profit. If you bet from the basic order, the profit will be calculated based on the volume of the initial order. If you choose from the total volume, from the current volume of the transaction. In our example, let's take “from the basic order” so that the bot can make small but frequent transactions.
- Max safety trades count, in fact, is the size, by how much, according to your calculations, the price can grow from the price you’ve bought. The larger this indicator, the greater the growth of the bot can keep: the more safety orders, the better the averaging works, and the faster the bot will react to a breakout. The disadvantage is the freezing of your funds: the more you have chosen safe orders, the more deposit must be left for the bot to work, “just in case”.
Not less than 15. If you are conservative, bet 20 or higher: how much the deposit will allow. In our example, it will be 20.
- Max active safety trades count, with long, we said that in 99.9% of cases it makes no sense to put more than 1 safety order at the same time. There we tried not to buy more coins than we need since we have BTC. In short, the situation is different: we are no longer in the BTC but in the coin. Put 2-3 safety orders at the same time, they will protect you from short squeeze: situations in the market when the price soars, knocks everyone according to stop loss and then comes back. How will two simultaneously active safety orders work in such a situation: in a rotation. They are in the orders of the exchange if the price soars, the bot will buy them all.
- Price deviation to open safety trades If this option is 1%, and the maximum number of safety orders = 20, then the bot will be ready to stand the growth of the coin up to 20%.
Safety order volume scale. It helps the coin to average faster and close too but this is not accurate, you know☺.
Safety order step scale: the more this step, the more the grid of the safety orders will stretch. Use carefully: with a large value of this option, safety orders, especially distant from the first, will be so far, and they are unlikely to work. In our example, we put 1.04, so that the bot can stand an unexpected increase in ADA up to 44.66%. It is in the “Assistant” in the upper right corner:
12. Do not start a deal, if the daily volume is less: in shorts, it is better to put 0, so nothing does not prevent the bot from opening deals.
13. The last option: trade start condition. It determines the signals for the bot to open trades. You can use different signals but on short bots, it is logical to choose the condition “opening a deal at the earliest opportunity”, or simply nothing: the bot opens deals immediately after the previous one is over, we short the coin.
14. Check the assistant if you have reached the limit of 1000 ADA:
Now "Create a bot" and "Start":
That’s all. Then the most important thing is to stop the bot if you realize that the market is turning and starting to grow. Specifically, this bot from our example will be averaged with growth up to 44.66%, it is better not to risk it.
Do not forget to follow the free BNB balance for Binance fees.
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