Setting-Up Simple Crypto Trading Bot As A Beginner.

As a final project for my college class, I decided to set-up my first and very simple cryptocurrency trading bot. In this article I will tell you all about the process, results, my mistakes and recommendations.

Disclaimer: This isn’t in any way a financial advise, if you choose to trade, you do so on your own risk.

Pre-work decisions

I have decided to use platform called 3commas.exchange as it is free and I had at least a little bit of experience with it. Additionally, you can use it’s paper trading account instead of risking your own money, which was definitely something I welcomed.

Now, I could have chosen the GRID bot variation but I decided that would be boring and I wanted to try to set-up a bot which uses my own custom alerts, so I went for the DCA bot instead. For the alerts I have used TradingView, where normally you have to pay for the alerts function but I am a student and I am not doing that so I just used their 30-day free trial.

Big decision was which cryptocurrency I would actually trade. I didn’t want to spend too much time on this, so after some thinking I chose ADA because of a good volume and in my opinion ok-looking graph.

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Bot settings

Finally, after all of those decisions it was time to get to work and figure out a setting for the bot which would be at least semi-decent and bring at least a little of profit. That was my whole goal.

In the screenshot above you can see what I came up with and those settings stayed unchanged for the whole duration of the project.

I have used minimum order size that this platform allows and for the target profit I was careful not to set something unrealistically ambitious, half of a percent seemed about right. I filled in other parameters with values that seemed ok to me, almost no research done there.

Final step before I could start the bot was setting up the TradingView alerts, which was surprisingly easier than I imagined — I just had to copy and paste the correct code from bot’s page.

I have decided to use RSI as a base for the alerts, because it is one of the few indicators I have experience with. Above, you can see alerts that stop and start the bot. I have used them to somehow manage the risk of a dump that often appears when RSI reaches higher values.

Finally, the alert that singals opening of a Buy order:

Once again, the signal is based on RSI and I just filled in a value that seemed right to me.

Results

Even though there is an immense space for improvement I was pretty happy with the results of my first own bot. Here they are:

After 4 weeks of running with no interference from my side, the bot has completed almost 50 deals and as you can see, yielded profit of around 10$ with minimum size orders.

Now, you can also see that in the first few days the bot was super successful in comparison to the rest of the month. Why is that? Why did it stop performing so well after a while? Answer to that is simple, the deals that the bot opened got stuck due to drop in ADA’s price and weren’t completed until few days later and this happened several times.

This issue could be potentially solved by including stop-loss in the bot’s strategy or — and I think this would be the better option — polishing the alerts, maybe adding some more conditions and implementing other indicators so the overall strategy would be safer.

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