Trading bots are popular among cryptocurrency traders for their ability to automate the buy-low, sell-high strategy. This guide will teach you everything you need to know about automatic trading bots, including how to set them up and manage them.

Trading bots mastery

<h2>What is Dollar-Cost Averaging (DCA)?</h2><p>Let's start with the basic concept. <a href="https://gainium.io/dca-bot">DCA</a> stands for "Dollar-Cost Average", and it's a trading and investment strategy that aims to reduce the risk of investing a lump sum at the wrong time by splitting up the intended investment into smaller orders.</p><p>Breaking it down to the bone DCA it is essentially this:</p><ul><li>You have a budget of 1500$ to buy apples, and instead of buying all of them in one go, you decide to buy 300$ worth every month of it.</li><li>In month 1, you can buy 1 kg of apples for 30$ (yeah, they are very expensive apples), so you have 10Kg for 300$</li><li>Next month the market price is lower so you can buy more apples for the same amount of your money (you buy 30kg for 300$). Of course, the price might still be higher than 10$, like it happened in May in the example below. Still, you don’t know that, so DCA allows you to spread the risk over time to ensure you will never spend all your money at the highest or the lowest but at the average purchase price that is still lower than the market average price. In the example below with 1500$ you have bought 82,5 kg of apples. Spending all your budget of 1500$ on the first month would have allowed you only to buy 50kg [(1500$ x 10kg/)300$] = 50kg</li><li>The average market price is 23$ per kilo (30$+10$+20$+15+40$)/5 = 23$, but because you could buy more apples at a lower price, your actual average purchase price is 18.18$ (total budget of 1500$ divided by the 82.5 kgs of apples purchased) = 18.18$</li></ul><figure class="image"><img src="https://back.gainium.io/uploads/Fig_1_apple_chart_2_637ec82ae9.jpg" alt="Fig 1 apple-chart 2.jpg"><figcaption>Fig. 1</figcaption></figure><p><br>Due to their simplicity and potential for high returns, DCA bots are popular among beginner crypto traders and investors. DCA bots are readily available on many bot platforms and can be easily customized to fit your trading style and risk tolerance.</p><p>DCA might give you fewer returns than investing all at once; however, as you already know, it’s almost impossible to time the perfect entry in the market.</p><p>Cryptocurrency trading is the only one except Forex that is open 24/7; therefore, bot trading is convenient as they can trade for us while we sleep or are out about living our lives.</p><p>Another reason bot trading is compelling is that it removes the emotional factor that often leads to making mistakes. We all have been there, at the moment of pressing buy or sell, sometimes it’s just impossible to make a decision. The bot will take care of that for you.</p><h2>Types of DCA</h2><p>There are two main types of DCA spaced across time intervals (time-DCA), price intervals (price-DCA), or both (double-DCA). They are fundamentally different and carry different risks.</p><h3>Time DCA</h3><p>Time-DCA is typically used as an investment strategy. It’s the simplest of all and requires the least knowledge to set it up, as you will need to set the bot to invest the same amount at regular intervals. However, this strategy is blind, it will also buy at the top (which you might want to avoid). The previous chart represents time Time-DCA in Fig. 1 where the same amount of money is used to buy apples each month. This strategy is good for a downtrend and sideways market conditions.</p><h3><br>Price DCA</h3><p>Price-DCA is a trading strategy. It is also quite simple, consisting of buying an asset at different price levels. You can decide beforehand which prices you want to purchase and how much of the asset you wish to purchase. For example, you might want to buy every time the price decreases by 1% and never buy above or below a fixed price. The problem with this strategy is that you might miss the train if the price never reaches your desired one. This strategy is suitable for downtrend market conditions.</p><h2>Martingale Multipliers</h2><p>DCA bots can use multipliers, aka Martingale system, which consists of increasing the investment's size and the deviation (distance) of the following orders by a fixed multiplier.</p><h3>Volume Martingale</h3><p>Volume martingale increases the chances and speed of closing a trade. Every additional purchase of an asset from the initial entry will be multiplied by a number (multiplier). The more the price deviates from the initial order, the more asset the bot will purchase. This is possible because the average price of purchase (as could see from the example of the apples), is lower than the average market price. We need a minor increase in the asset's market price to close a profitable deal.&nbsp;</p><p>We want to close the deal with 1% in the two examples below. In the instance with no martingale, the bot buys one coin every time the price decreases by 1%, it fills 5 orders covering a deviation of 4% in a price decrease, so to close in profit, it requires a &nbsp;price increase of 3.1% from the last order.</p><p>In the example with Martingale, the price only needs to increase by 2.3% from the last order to close in 1% profit, and we also sell more coins making more profit than with the previous bot.<br>&nbsp;</p><figure class="image"><img src="https://back.gainium.io/uploads/Fig_2_no_price_martingale_c88f34140b.jpg" alt="Fig 2 no-price-martingale.jpg"><figcaption>Fig. 2</figcaption></figure><figure class="image"><img src="https://back.gainium.io/uploads/Fig_3_volume_martingale_of_1_5_2_ec584622b5.jpg" alt="Fig 3 volume-martingale of 1.5 2.jpg"><figcaption>Fig. 3</figcaption></figure><p>Martingale increases the chances of closing a deal but also requires more significant capital to invest. So during a long downtrend is very risky to have a Martingale multiplier.</p><h3>Price Deviation Martingale</h3><p>The martingale strategy can also be applied to the price deviation, so every order will not be spaced equally in the chart but by a multiplier of your choice. This allows you to cover a more significant deviation using fewer funds. Cryptocurrencies are very volatile, so this tool is handy. As you can see from the example below (Fig. 4), with a multiplier of 1.5% on the price, we can cover almost the same deviation of the bot in Fig 2. spending only three coins.</p><figure class="image"><img src="https://back.gainium.io/uploads/Fig_4_price_martingale_only_of_1_5_84b5b04e9d.jpg" alt="Fig 4 price-martingale-only of 1.5 .jpg"><figcaption>Fig. 4</figcaption></figure><p>Both martingale strategies can be combined and work very well in maximizing your chances of closing a profitable deal. In the example below, we can see how we can efficiently use both. As mentioned before, bots with volume martingale use a lot of capital, so it is challenging to cover enough price deviation suitable for cryptocurrency trading. That’s why price martingale is very useful, as it helps find the right balance between safety and budget.</p><figure class="image"><img src="https://back.gainium.io/uploads/Fig_5_price_and_volume_martingale_ee836851fc.jpg" alt="Fig 5 price-and-volume-martingale.jpg"><figcaption>Fig. 5</figcaption></figure><h2>Types of deal start conditions</h2><p>There are three main types of deal start conditions, not all trading platforms have all of the following, so you will need to find which platform best suits your trading style.</p><h3>ASAP</h3><p>ASAP stands for "As Soon As Possible". These bots start a deal immediately and will open a new one once the previous deal is completed. They are used by traders who believe the market will go in a particular direction and want to run as many trades as possible.</p><h3>Signal</h3><p>Signal bots use indicator signals to trigger the deal start. Signals can be built within the bot platform or sent from an external service (such as TradingView) as a webhook. Gainium has conveniently already included the most popular presets like <a href="https://gainium.io/help/rsi">RSI</a>, <a href="https://gainium.io/help/macd">MACD</a>, <a href="https://gainium.io/help/qfl">QFL</a>: With Gainium you might not need to subscribe to the external service to send the signal.</p><h3>Periodic</h3><p>Periodic DCA bots open new deals at intervals, regardless of market price. Which, as we discussed before, is a form of long-term investment.</p><h2>Risk Management</h2><p>When getting started with bot trading, one of the most important things is understanding your risk appetite and managing your funds.<br><br>DCA bots use a significant investment to run safely. The more deviation you cover and the more funds you use by adding volume with the martingale scale, the safer your bot becomes. However, this has an impact on the daily ROI. So you must balance how much you want to invest, the profit you want to achieve, and the potential losses you will incur. These are just some of the variables, as you might create a super safe bot from a theoretical point of view, but you are running it with one very risky asset.</p><h3>Technical Analysis and Fundamental Analysis</h3><p>There are several tools available to manage your bots; first of all, comes your research learning about Technical Analysis (TA) as well as Fundamental Analysis. (FA). TA is based on the analysis of the charts and aims to forecast the market's future based on an asset's historical behavior. In other words, it is trying to identify a trend and opportunities for trading. FA instead looks at macroeconomic factors to evaluate the value of an asset instead of the historical performance. So it is looking at qualitative and quantitative elements to establish an asset's potential and value.</p><p>Once you have done your research, this can also be automated using some filters in your bots: for example, only trading large cap tokens; and with the appropriate deal start conditions, for example, only trading oversold tokens if you are running a long strategy DCA.</p><h3>Bot controller or orchestration (stopping and starting bots)</h3><p>Another tool to help your risk management would be to switch on and off your bots entirely depending on market conditions. This orchestration can be done again with a webhook alert from an external platform like TradingView. For example, you might want to start your bots when DXY is falling or stop your bots when it’s rising, as the dollar price (most of the time) is inversely correlated to the price of Bitcoin.</p><h3>Backtesting and Paper trading</h3><p>Many bot platforms provide you with a tool to <a href="https://gainium.io/backtesting">backtest your strategy</a>. This step is the most essential part of your strategy recipe. It will never be 100% accurate, but it will help you tweak your bots to find the right risk-reward ratio balance that suits your trading lifestyle. Gainium's backtesting tool allows you to back-test your strategy on different timeframes. The smaller the timeframe, the more accurate the backtesting is.<br><br>Some platforms allow you to run bots on demo accounts; this is called “<a href="https://gainium.io/paper-trading">paper trading</a>”, so a good practice could be the following. You could do your research, run a backtest and try the bot on paper trading before running it on your real account. It’s important to note that paper trading is also not 100% accurate as several factors cannot be replicated on these accounts.<br><br>Many people come to trading and bot trading hoping this would be a get-rich-fast method. This is not the case, and they are often upset when looking at the daily return. However, the daily ROI matters the most, and if you have a good strategy, are consistent, and are perhaps compounding your returns, you will be surprised! No other asset can give you such good returns with proper risk management. Even a small, conservative, and achievable 0.1% a day will give you a whopping 43% return when compounding your earnings.&nbsp;</p><p>See it yourself <a href="https://compounddaily.org/compound-daily-interest-calculator/">here</a>.</p>

In this article you can learn about Dollar-Cost averaging (DCA) basics and how to run and manage DCA bots profitably.

double-dca.svg

DCA bot basics

<p>If you have been using crypto trading bots long enough, chances are some of your bots were left holding “red bags.” This term refers to a deal with a significant negative PnL. Exiting red bags for profit is more of an art than a science, and the best approach depends on various factors. In this article, I will explain the process I followed for my own red bags, and hopefully, it will give you some good pointers for managing yours.</p><h2>What to do if your bot has red bags</h2><p>The first step in assessing the situation is acknowledging your available options. Those options are:</p><ol><li><strong>Do nothing</strong>.</li><li><strong>Close the deal and accept the losses</strong>.</li><li><strong>Manually micromanage</strong>.</li><li><strong>DCAing your way out.</strong></li><li><strong>Convert the deal to a DCA short bot</strong>.</li><li><strong>Convert the deal to a grid bot</strong>.</li></ol><p>Choosing the right approach depends on a few factors, including your knowledge and experience as a trader, your time horizon (how long can you wait), the opportunity cost (what else could you be doing with the funds), your emotional resilience, deal size, the particular token involved, etc. I've personally used every one of them, but my favorite is exiting with a grid bot. Each situation is unique, and you may mix and match any of those options to suit your needs.&nbsp;</p><p>Let's review each option in more detail.</p><h2>Option 1: Do nothing</h2><figure class="image"><img src="https://back.gainium.io/uploads/0f2a00ceb3ca3739b284356b61b12957_535bb508e8.jpg" alt="0f2a00ceb3ca3739b284356b61b12957.jpg"></figure><p>It may be painful to watch these red deals and try to prevent yourself from hitting the panic button, but sometimes the best thing you can do to avoid an even worse situation is to do nothing and observe.</p><p>This is especially true when there is a sudden price drop. When markets dump, we often underestimate how far down they can go. Trying to time the bottom, aptly named “catching a <a href="https://academy.binance.com/en/glossary/falling-knife">falling knife,”</a> is a dangerous endeavor, so you may as well stay out of it until the market settles.</p><p>Taking action too early is a mistake I've made countless times. Even though it may feel like the price is already super discounted and you may never get a chance to buy at this price again, let me tell you, that is rarely the case. More often than not, the market continues to dump, and I wish I had resisted the urge to add more fuel to the fire.</p><h2>Option 2: Close the deal and accept the losses</h2><p>This may seem like a mistake, but actually, for some people it can make sense. If you are not willing to take additional risk and the remainder funds involved in the deal could be better used elsewhere (opportunity cost), you can consider cutting the losses and moving on.&nbsp;</p><p>In most cases, though, closing the deal right after a dump might not be the best time. Markets tend to rebound, so waiting a little before acting on it could pay off. Furthermore, you can set a DCA short bot or a grid bot without taking any more risk (last option), so review all other options before throwing the towel.</p><h2>Option 3: Manually micromanage</h2><p>Another option is to convert your deal to a manual trade and set a specific plan for how you want to exit. This option allows you to set parameters that may not be available with a bot. For example, you may decide to sell a portion of your red bags at a loss to free up some funds. Or perhaps you are waiting for your favorite indicators to give you a signal to buy or sell.</p><h2>Option 4: DCAing your way out</h2><p>This option involves adding more DCA orders if you still have funds available or manually buying base through the DCA bot.</p><p>This can be a viable strategy if you get the settings and timing right. Note the “IF”; timing the market and predicting how far down the price can go is extremely difficult. In addition, you are adding exposure to that particular coin, potentially unbalancing your portfolio and adding more risk. For those reasons, if you go with this option, consider the potential risks carefully.</p><h2>Option 5: Convert the deal to a DCA short bot</h2><p>If you think further downside is still on the table, a viable option is to short the red bag with a short DCA bot and try to squeeze as much value from it as possible. This option has the advantage of not having to add additional exposure to the coin.&nbsp;</p><p>When setting a short bot, I recommend covering at least a 50% price deviation. Take into account that each DCA order is actually selling the token, so you may want to set up the bot in a way that your average sell is higher than your breakeven price.</p><p>For Gainium users, you can set up a bot with the following configuration:</p><ul><li>Deal start condition: Manual. This will ensure to start the deal only when you are ready.</li><li>Strategy: Short.</li><li>Take Profit: Disabled. Keep into account that the short bot is already selling the asset as the price increases. Taking profit means buying the asset back, which we do not want. Once all DCA orders are filled we can cancel the deal and delete the bot.</li><li>DCA settings: Here you can adjust to your liking, just ensure that the final breakeven price is higher than your average purchase price if you want to exit in profit.&nbsp;</li></ul><p><img src="https://back.gainium.io/uploads/short_bot_red_bags_824641e70b.png" alt="short_bot_red_bags.png"></p><h2>Option 6: Convert the deal to a grid bot</h2><p>Lastly, my favorite option is to exit with a grid bot. The advantage of a grid bot is that it can be configured to have less risk than a DCA bot (if no buy orders are set). As long as you choose a wide enough grid, the profit generated from the volatility will accumulate and eventually could cover your losses completely.</p><p>Setting the grid width depends on how long you are willing to wait. As a general rule, the wider the grid, the longer it would take to exit, but the more profits you can generate along the way.</p><p>A good rule of thumb for setting your upper grid price is to pick the nearest resistance to your breakeven price for that deal. However, it is possible that you are still at a loss by the time reach this target, specially if there wasn't enough volatility on the way up. If you can afford to wait, I recommend setting the upper grid price to a strong resistance that is higher than your breakeven price.</p><p>For the bottom price of the grid, you may choose the strongest support level close to the current price. When considering the bottom price, you would want to decide if you are willing to add buy orders (i.e., choosing a price under the current price) or would like only to use the existing base (i.e., selecting a price over the current price).</p><p>If you are using Gainium's grid bot, you can set the initial purchase price to be the average price of the red bag. It will automatically keep track of your breakeven price (taking into account any profit generated).</p><p><img src="https://back.gainium.io/uploads/grid_red_bags_cf99ff2b00.png" alt="grid_red_bags.png"></p>

If your DCA bot left you holding a deal in red, read this article for tips on how to recover them profitably.

red_bags.svg

How to recover red bags

<p><a href="https://gainium.io/grid-bot">Grid bots</a> are a great option for beginner and experienced traders to profit from the crypto market. They work by buying a fixed number of coins at predetermined prices and then selling them when the price reaches a higher level. This ensures that the trader always makes a profit, regardless of the market conditions. Grid bots also have the advantage of being able to trade in both directions, which means they can make profits whether the market is going up or down.</p><figure class="image"><img src="https://back.gainium.io/uploads/grid_strategy_8ef44b4ebf.svg" alt="grid strategy.svg"></figure><p>In this article, I share a grid bot setup I have been using successfully for many months, the super wide-range grid stack. This setup is a <a href="https://gainium.io/academy/trading-vs-investing#The_hybrid_trading-investing_approach">hybrid investing-trading approach</a> to crypto that has a relatively low risk and enjoys a decent ROI.</p><h2>Why the super wide-range grid stack?</h2><p>If you want the full background of the events that led to the creation of this strategy, you can read <a href="https://gainium.io/blog/gainium-alpha-release-and-the-story-that-brought-me-here">my story</a> on the blog. But the gist of it is that after the November ATH to nose-dive market meltdown, I decided to stop using risky bot strategies and focus on a setup that would allow me to sleep well at night no matter what the market decides to do next. My goal was to achieve continuous and steady profits with minimal risk.</p><p>Grid bots were the obvious choice due to their simplicity and their ability to generate continuous profits. All I needed to do is to come up with a system that would take advantage of any market condition. After some research, I decided to settle on a system of stacked grid bots that would cover the price action of the foreseeable future. Each grid bot runs on a price zone, and they have a specific configuration to take advantage of the predominant market condition for that zone.</p><p>The grid-stack setup process is as follows:</p><ol><li>Choose your coin</li><li>Define the price zones and allocate budgets</li><li>Set up the grid bot configuration for each zone</li><li>Run the bot</li><li>Boost the ROI of unused funds</li></ol><p>Let's dive into each step by going through an example: BTC-USDT</p><figure class="image"><img src="https://back.gainium.io/uploads/Grid_Stack_set_up_8e587b5364.webp" alt="Grid Stack set up.webp"></figure><h3>1. Choose your coin</h3><p>The first step is to choose the coin you want to grid trade. You can expect this setup to run for a long while so this has to be a coin that you are comfortable holding long term. I would choose a coin with enough price history to make setting up the price zones easier in the next step.</p><p>For our example, Bitcoin is a great choice, but any top 20 coins by market cap would be a good option. Lower market cap coins experience more volatility, which can turn into more profits when trading grid bots. However, make sure to be comfortable handling the extra risk.</p><h3>2. Define the price zones and allocate budgets</h3><p>The next step is to define the price zones and allocate how much funds you will be trading on each. I like to do it by finding the range that the coin spent most of the time for the last year or two. Then I divide that range into top, middle, and bottom. Finally, I added two extra zones, one under the bottom and another over the top. If you want to be super accurate, you can fine-tune the price ranges with support and resistance zones.</p><p>As for allocations, we will go over my standard template shortly. If you want to take on more risk, you can allocate more budget to zones 1 and 5.</p><p>In the example of BTC-USDT, the price range that covers most of the price action of the past two years goes from 18k-70k. So in this range I will have three main zones. The result for my zones and allocations is:</p><ul><li><strong>Zone 1</strong> or "Oh Shit! 💩" - below the nearest macro bottom, which is under $18k in this case. If Bitcoin breaks under this level it's a no man's land. This can be a great area to accumulate Bitcoin for the long term but great caution is advised due to high volatility and uncertainty. I am allocating 5% of the budget here.</li><li><strong>Zone 2</strong> or "Bear hug 🐻" - bottom range of the main zone, $18k to $35k. This is proper bear market territory, and Bitcoin will likely consolidate around this area while market conditions remain poor. It's a good time to accumulate Bitcoin in this zone, I usually allocate around 30% of the budget here.</li><li><strong>Zone 3</strong> or "Boring middle 🥱" - middle range of the main zone, $35k to $52.5k. This is actually the range that Bitcoin spent the most time in during the last 2 years. I wouldn't say that it's a bad time to accumulate but it's probably safer to start tampering down. From a profitability point of view, it's somewhat less interesting than zone 2 or 4, so I allocate a little less budget than zone 2 and 4, 20%.</li><li><strong>Zone 4</strong> or "Greedy bastard 🐂" - upper range of the main zone, $52.5k to $70k. This is bull zone territory. In this area people often get greedy and they hold on to their bags for way too long, thinking that it's going to the moon from there. While it's certainly possible to make a new ATH, this area should be traded with extreme caution as traders are very likely to take profits and put a lot of sell pressure. This is a great time to offload into stablecoins and be prepared for possible reversal.</li><li><strong>Zone 5</strong> or "To the moon 🚀" - Above ATH, over $70k. Every trader's dream is to buy in zone 1 and sell at the very peak of zone 5, but unless you have a crystal ball, I suggest not trying to time the perfect entry and exit. Instead, you should scale in and out, averaging your position as more favorable prices are available. When the price goes above the previous ATH it enters uncharted territory, and how high it can go it's anyone's guess. In this zone I will be taking profits consistently, knowing that I won't be able to sell at the very peak and being perfectly fine with it. I'm personally allocating 15% here.</li></ul><h3>3. Set up the grid bot configuration for each zone</h3><p>Each price zone can benefit from a specific grid bot configuration. The most important factors affecting the profitability of the bot in each zone will be the grid spacing and the profit currency.</p><p>For most people, the <a href="https://gainium.io/help/grid-step">grid step</a> it's going to be dependent on the available budget. This is because exchanges have a minimum order value, so the minimum budget you will need to run the bot is <strong>number of grids x minimum order value</strong>. If you are trading in Binance, the minimum order value is $10, so if your budget is $1000, you will have 100 grids to distribute across your 5 zones. Other exchanges like Kucoin have a very small minimum order and would allow you to have a lot more grids.</p><p>I like to have more grids on zone 2 and 4. Though you may think that zones 1 and 5 are better, the issue with them is that you don't have a clear floor or ceiling. For that reason, I use more grid spacing there in an attempt to cover as much as possible.</p><p>You can shoot for 1% spacing between grids if your budget allows. For BTC, ETH, and BNB I try to set the spacing at 0.5%, as they experience much less volatility than the rest of the market.</p><p>The next important consideration is the <a href="https://gainium.io/help/profit-in-base-and-quote">profit currency</a>. As a general rule, if you expect the value of the token to appreciate in the future, you should profit in base (BTC in our example), and if you expect it to depreciate, you should profit in quote (USDT in our example). Zones 1 and 2 are clear candidates to profit in base, while zones 4 and 5 are great to profit in quote. The profit currency for zone 3 would depend on your preference, but I would still choose to profit in base.</p><p>With that in mind, here are the resulting grid bot configurations for each zone:</p><ul><li><strong>Zone 1</strong>: Grid spacing: 2-3%. Profit currency: BTC.</li><li><strong>Zone 2</strong>: Grid spacing: 1%. Profit currency: BTC.</li><li><strong>Zone 3</strong>: Grid spacing: 1-2%. Profit currency: any.</li><li><strong>Zone 4</strong>: Grid spacing: 1%. Profit currency: USDT.</li><li><strong>Zone 5</strong>: Grid spacing: 2-3%. Profit currency: USDT.</li></ul><h3>4. Run the bot</h3><p>Once you have your grid bot configured, it's time to sit back and let it do its thing. The result of this strategy is peace of mind, as you will have a grid bot ready to take advantage of whatever market situation comes next.</p><p>It's important to note that for this strategy you should choose a platform that would allow you to manage the funds allocated for each bot intelligently. If your grid bot platform doesn't allow you to send only a portion of the orders at the time, you may encounter limitations as exchanges usually restrict the number of limit orders you can have for a particular coin pair at any given point (in Binance, for example, is 200 orders). In addition, having your funds locked in limit orders will prevent you from being able to use them to generate extra yield, as we will discuss in the next section.</p><p>If you are a Gainium user, you can activate <a href="https://gainium.io/help/smart-orders">smart orders</a>. Smart orders will ensure that only those orders close to the current price action are sent to exchange as a limit order, so most of your funds will be available. This will also ensure you don't run into exchange order limits.</p><h3>5. Boost the ROI of unused funds</h3><p>The advantage of the super wide-range grid stack is that it covers a lot of price action so you can expect to continuously generate profit over time, the disadvantage is that your funds are very spread out, and you only have a tiny portion "at work" at any given time. However, you can deploy unused funds to take advantage of other <a href="https://gainium.io/academy/trading-vs-investing#Extra_perks">yield-generating strategies</a>, such as airdrops, yield farming, stacking, and interest-bearing accounts.</p><p>It's essential, however, that you carefully assess the pros and cons of using any yield-generating strategies, as each has its own set of risks and rewards.</p><h2>Final thoughts</h2><p>One important psychological aspect of this strategy is that I no longer feel anxious about what the future price action may look like. Even if I am technically underwater on my investments, I know that as long as the price remains in the range of my bots the continuous profit generated will eventually make up for the losses.</p><p>The super-wide grid bot stack strategy is a very effective way to generate profit from crypto long term. And while it's relatively low risk, it's important to remember that no investment is without risk. Be sure to do your own research and never invest more than you can afford to lose.</p><p>I hope this article has been helpful. If you have any questions, feel free to reach out.</p>

In this article, I share a grid bot setup I have been using successfully for many months, the super wide-range grid stack. This setup is a hybrid investing-trading approach to crypto that has a relatively low risk and enjoys a decent ROI.

Grid.svg

The super wide-range grid stack strategy

<p>When it comes to trading cryptocurrencies, many people adopt a "more is better" mentality. This often leads traders to take on more risk than they can handle, which can result in heavy losses.</p><p>Is not uncommon for beginner traders to set up DCA bots with very risky parameters in an attempt to maximize their profits. However, in a market downturn, DCA bots can quickly fill DCA orders and dry up your funds.</p><p>If you find yourself in this situation, don't despair. There are a few things you can do to try and salvage the situation.</p><p>First of all, you need to take a step back and assess the situation. After you have taken a breath and put emotions aside, you can go over this account recovery checklist.</p><ol><li>Stop bots and remove DCA orders from existing deals.</li><li>Lower take profit for active deals.</li><li>Close positive and near breaking even deals.</li><li>Deposit extra funds if possible.</li><li>Analyze and prioritize remaining deals</li><li>Add funds manually or add DCA orders</li><li>Keep micro-managing and closing trades until there are enough funds for your bots to run normally.</li></ol><p>Let's go over these points in more detail.</p><h2>1. Stop bots and remove DCA orders from existing deals</h2><p>As soon as you realize that your account is overextended, the first thing you need to do is stop all bots and remove any DCA orders that are still active. Stopping the bots will prevent the bots from opening new deals while removing DCA orders from existing deals will prevent the bots from executing more DCA orders and further drain your account. Even if you completely ran out of funds, the bots are monitoring your balance, and as soon as more funds become available they may unexpectedly execute DCA orders. So make sure you have completed this step before doing anything else to avoid an unwelcome surprise.</p><p>When stopping the bots, make sure you don't close the deals. We will be manually closing some deals in a later step.</p><p>Keep an eye on locked funds in pending orders. You will want to free as many funds as possible to manually allocate them.</p><h2>2. Lower take profit for active deals</h2><p>Next, you will want to lower the take profit of remaining deals to 0.05%. This will help minimize your losses and close deals faster, freeing funds to recover other deals.</p><h2>3. Close positive and near breaking even deals</h2><p>If you have any deals that are in profit, regardless of how small, you should close them. The same goes for deals that are very close to breaking even. It is better to take a small loss now and free up funds to focus on recovering other deals.</p><h2>4. Deposit extra funds if possible</h2><p>If you have any extra cash, now is the time to deposit it into your account. The more funds you have available, the easier it will be to recover your account.</p><h2>5. Analyze and prioritize remaining deals</h2><p>The next step is to analyze your remaining deals and prioritize which ones you want to focus on recovering. Take a look at all of the deals that are still open and assess how likely they are to be profitable. You will want to prioritize the deals that are most likely to be profitable and focus on those first. Take into consideration the size of the loss, the current market conditions, and your risk tolerance.</p><h2>6. Add funds manually or add DCA orders</h2><p>Once you have determined which deals you want to focus on, it's time to add funds. But don't add more funds without a plan, take a look at technical indicators and try to determine where the bottom is. Adding funds too early may mean that you end up losing even more money.</p><p>If you don't have the technical know-how to use technical indicators to time when to add extra funds, you may add extra DCA orders at specific price drops instead. Just maz</p><h2>7. Keep micro-managing and closing trades until there are enough funds for your bots to run normally</h2><p>The final step is to keep a close eye on your account and make sure you are regularly closing deals. As soon as a deal starts to turn around, close it. The most important thing is to remain calm and patient and wait for the right to make a move.</p><p>&nbsp;</p><p>Managing an overextended account is never easy, but by following these steps you can give yourself the best chance of success.</p>

DCA bots can quickly fill DCA orders and dry up your funds on a market downturn. If you find yourself in this situation, don't despair. There are a few things you can do to try and salvage the situation.

overextended.svg

Manage overextended account

<p>DCA stands for Dollar Cost Averaging, a term that in the world of crypto bots, it can be used to denote two very different trading strategies. In this article we will review these strategies, their key differences, and how combining them can open a world of new possibilities.</p><h2>A little history on the DCA concept</h2><p>First of all, let's examine the term DCA and understand why there are two different strategies with the same name.</p><p>The term "Dollar Cost Average" or DCA was first coined by Benjamin Graham in his 1945 book <a href="https://en.wikipedia.org/wiki/The_Intelligent_Investor">The intelligent investor</a>. Graham puts forward DCA as an investment strategy whereby you would buy the same dollar amount of an asset at fixed time intervals (every week, month, or quarter), independently of its price. This way, you would buy more shares of the asset when the prices are down and fewer shares when the price is up, thus averaging your overall cost of the asset and minimizing the risk of volatility. This strategy quickly became popular for 3 good reasons: it sets the habit of continuously investing, it avoids mistiming the market, and it removes emotion from the buying decision.</p><p>Fast forward a few generations, and crypto and automatic trading bots became very popular. Crypto is a risky asset and consequently attracts risk-prone traders and investors. In the never-ending quest of increasing profits and taking more risk, someone figured out that instead of using a stop loss to cut your risk when trading, you could use the <a href="https://www.investopedia.com/terms/m/martingalesystem.asp">Martingale strategy</a>, buying more of the asset if the price moves against your take profit. This strategy helps obtain a better average entry price and therefore increases your chance to achieve the take profit level, but it also increases your position size as the market moves against you which could result in heavy losses. Because of this price averaging capability and riding on the already familiar "DCA" term, these bots were also named DCA bots and became quite popular.</p><p>To clarify which strategy we are referring to going forward, we will name Time-DCA the former and Price-DCA the latter.</p><h2>The Double-DCA Strategy</h2><p>Time-DCA is used as a risk-minimizing strategy for investing, while Price-DCA is used as a risk-increasing strategy for trading. While they could not have been any more different from each other, something magical happens when you combine the two.</p><p>The Double-DCA strategy is the combination of these two strategies into one, reaping the best of both worlds. In this strategy, you would Time-DCA by opening a new deal for the same dollar amount periodically (every week, month, or quarter) coupled with a Price-DCA that would allow each deal to buy more (up to a predefined amount) if the price falls. This way you would minimize the risk of volatility by investing regularly and further average down your position if the price falls.</p><h3>Setting the Double-DCA strategy in Gainium</h3><p>We've made it really easy for you to set up this strategy in Gainium. Simply head to the trading bots page and create a new bot. On the deal start condition, select time-based. After that, input how often you would like to open new trades and configure the Price-DCA as you would for any other bot.</p><p><img src="https://back.gainium.io/uploads/Double_DCA_1_707cfdabcb.webp" alt="Double DCA 1.webp"></p><h2>Final thoughts</h2><p>The Double-DCA strategy is a great way to invest in crypto and maximize your chances of averaging down the cost of your assets. The key is to find the perfect balance between the two DCA strategies. If you set the Price-DCA too low, you might not be able to buy enough when the price dips and miss out on the profits. On the other hand, if you set it too high, you might end up buying too quickly and miss better prices later on.</p><p>As with any strategy, the Double-DCA has its own risks and limitations that need to be taken into account. Make sure to use it as part of a good <a href="https://gainium.io/academy/crypto-portfolio-management">portfolio management strategy</a> to profit from crypto in the long term.</p>

Learn how to combine Time-DCA and Price-DCA to maximize your profit from investing in crypto  over the long term.