Ten things new or novice Gunbot users should do
Did you just get your copy of Gunbot? Don’t go all in too soon, you’re better off when you put in some time and understand exactly what your are letting this software do with your money. The more you learn, the more you’ll earn.
I know Gunbot is a pretty cool “internet money machine” and your hands are itching to put it to use. Now take your time to learn how to handle it first.
I knew next to nothing about trading or trading bots when I got into Gunbot. Stupid mistakes were made. These are the most important things I recommend to every new Gunbot user today.
10. Don’t think you already know everything, just because you are a successful manual trader
You’re a successful manual trader? Great. Now let’s get good at trading automation.
Be prepared to adjust your trading style to cope with the logic Gunbot has to offer. Don’t get frustrated that things are different then you are used to, embrace the options you have and make the most out of it. Gunbot went through a lot of iterations, almost all features are the way they are because this is what power users want from a trading bot.
To get an idea what might be different than what you are used to:
- Indicators in Gunbot are calculated every few seconds, instead of every period close.
- Automation means that hitting a stop limit is not necessarily equal to stopping trading afterwards. Plan what your bot must do after hitting a stop limit.
- Exchanges might not deliver as much historic candle data through their API as you’d expect, this affects your indicators. Using a 200 period MA might not be possible.
Bot trading offers immense possibilities, but it’s good to be aware of the constraints that might exist.
9. Start with low stakes and simple strategies
The best trading strategy is the one you fully understand. This allows you to make quick and meaningful adjustments when you see the results are not what you expected.
When setting up a trading strategy in Gunbot, things can get out of hand pretty quickly. Before you know it, you’ve made a strategy with 10+ criteria for placing a buy order.
That is not ideal for learning how Gunbot works. A complicated strategy might be really effective, but it won’t trade often. You’ll end up scratching your head thinking why this bot won’t trade. Keep it simple at first!
The gain strategy is excellent to begin with. When you don’t use additional confirming indicators or trailing, it will trigger trades quickly and precisely where you expect them. Once you got the hang of that, incrementally move on to further restricting criteria for trades.
While learning, keep the amount you let Gunbot trade with to a minimum. Learning does not have to be expensive.
8. Screen your trading pairs
Gunbot can cope with many different market situations. But not every market situation is easy to cope with. Don’t make it too difficult on yourself.
Selecting good trading pairs is a complex topic about which hundreds of articles can be written, but that’s not within the scope of this article. I’ll stick to the very basics.
A pair you should stay away from at first:
Keep these three simple things in mind when selecting your first pairs to trade with Gunbot:
- Make sure there is enough volatility, markets that move up and down less than the percentage of fees per trade are useless.
- Make sure there is enough trading volume to get your orders filled.
- Choose pairs that seem to be slowly moving upwards, stay away from markets that just encountered a huge pump.
A pair that looks great for easy trading:
7. Set limits
One of the cool things of a trading bot is that you can set it to perpetually keep trading: buy when the set buying criteria occur, sell when set profit is hit.
This is also an easy way to eventually buy just before the market goes down while you’re sleeping, and suddenly after a good run you’re stuck with a pile of coins that are impossible to profitably sell soon.
Especially when you’re still finding your way around all the available options in Gunbot, it’s a a great idea to set limits that help prevent you getting into a bad situation.
- Using the “Count Sell” option, you can limit how the number of sell orders. This is a great way to limit risks and stop trading after you’ve reached your target for the day.
- The “Never Buy Above” option can be used make sure that buy orders are always placed at lower rates than the last sell order. This prevents your trading strategy from repeatedly buying during a period where prices keep moving up — before eventually dropping again.
- If you use a stop limit, consider the option to automatically stop trading that pair after it hits. This option is called “SL Disable Buy”.
6. Don’t over complicate your strategy
Gunbot offers a ton of options to customize your trading strategies. While having options is great, having a super complicated strategy might not be so great as it seemed at first.
Keep in mind that every option you enable and every indicator you add makes it more difficult for the bot to actually trade.
The further you restrict the criteria in which Gunbot is allowed to trade, the less chances it will have to actually place trades.
5. Learn to understand trailing
Trailing various types of orders in Gunbot is one of the most powerful features in Gunbot. The mechanics are also hard to understand for many new users.
It’s pretty easy though, once you get the hang of it.
One thing you must understand before enabling trailing is this:
Strategies follow an “AND” principle, not an “IF, THEN” system. Every strategy condition for a trade must occur at the same time.
This means that trailing can only successfully finish while, for example, confirming indicators still allow for a sell order. Say you configured your strategy to allow sell orders only when RSI is between 70 and 100, this also means that trailing must finish while RSI is between this range.
Detailed info on how to work with trailing can be found on the Gunbot wiki. Here is the super short explanation of why trailing is great:
- After hitting a sell target, instead of selling a trailing range is set at a configurable range below the price.
- As long as prices keep going up and don’t cross that range, Gunbot waits.
- As soon as prices go down and cross the trailing stop, a sell order is placed at a much better rate than the initial target.
4. Read into the indicators you use
Gunbot makes it easy to use a number of common trading indicators in your trading strategy. Read into them, seriously. Don’t waste your time setting up indicators you have no idea about.
There are tons of good free resources available. Usually it just takes couple of minutes to get the basic concepts of an indicator.
3. Understand the importance of bid/ask
When trading, Gunbot is a taker and not a maker. This means it only places an order when there is a bid or ask in the order book that is likely to fill the order it places.
When looking to sell, Gunbot will execute an order when the highest bid price matches the target. When buying, it looks at the lowest ask price before placing an order.
This is more important then it may seem at first. When you’re looking at a chart it’s easy to think that it surely must be possible to place a successful order at the last price currently shown. This does not have to be true: the current lowest ask price can be far above the last traded price.
2. Learn to read the logs
If you’re serious about making the most out of your bot, you are going to encounter situations where you will be questioning why Gunbot did not trade in a certain situation. This is why detailed logs are kept for each trading pair.
This is the absolute minimum you must understand about your logs:
- When buying, the Ask price must be equal or lower than the “Entry Point”. No trade will happen when this is not the case.
- When selling, The Bid price must be equal or higher than the “Exit Point. No trade will happen when this is not the case.
In charts it often seems as if there must have been a trading opportunity, upon closer inspection in logs you’ll often find that bid/ask just weren’t at the price the chart let you believe they were. Use this info to adjust your trading strategy accordingly.
The Gunbot wiki offers detailed information about how to interpret other parts of the logs.
1. Don’t start using DCA or reversal trading before you understand your trades
DCA and reversal trading are two powerful options you can use to cope with falling prices. They are absolutely great, but can also invest large amounts of money or lose money when used in a way you didn’t anticipate.
Take the time to familiarize yourself with basic trading functionality of Gunbot before you start using these options. DCA and reversal trading can greatly improve your results, but also immensely complicate your trading strategy.
