A DCA (or "Dollar Cost Averaging") strategy is the practice of investing into a currency at preset intervals to reduce the entry price of a position over time and mitigate volatility risk.
For example, when you enter a position with a lump-sum investment (all-in) you run the risk of purchasing "highs" only to see the price drop and end up with a losing position, that you must choose whether to hold, or cut at a loss.
However, if you DCA, you can divide your investment into smaller pieces and buy the asset at various points over time at different prices, thereby getting a better average price for your position and greatly reducing risks from the consequences of volatility.
Let's Get Started
On this page, you can see an overview of your recent trades and take a look at how things are going with your bots. You can see from the statistics, things are going pretty well for us, bots are working and constantly bringing us profit, 24 hours a day, 7 days a week. However, in order for them to work, the bots need to be properly configured.
To create a new bot, click the button "Create Bot" located in the upper right corner.
On the next page, we have two options - to use a ready-made bot called the "Gordon" bot or to use the "Advanced" one.
Creating a Gordon Bot
If your subscription plan includes Multi-pair DCA bots, you might like to create a "Gordon" bot; this can be created in just a few clicks!
All we need to choose is an exchange (please note that this bot is not available on all exchanges, you can look at the list of exchanges that work with the Gordon bot on this page). Also, we choose the base currency that the bot will use in transactions and the amount we are investing in our Gordon bot. Next, we select the strategy for the bot to implement. Here they are, three strategies:
Bot waits for just the right time to open a new deal.
Bot opens new deals at a regular, slightly aggressive pace.
Bot pens deals at a faster rate for fast scalping and taking small profits.
Choose one of the strategies above and click "Create Bot." Once it's all done, the bot is going to stand by and wait for a signal to start a deal.
Please note, when there is no volatility, QFL signals are not sent, and there might be certain cases where QFL trades do not start within 24-36 hours, depending on the QFL settings of the Gordon bot and current market conditions.
It is possible to slightly modify the settings of your Gordon bot if you'd like to do that. After successfully creating a bot, find it in the list of active bots. Click on the bot's name, then click "Edit" and select the "Advanced" tab. Next, find the section in the bot settings "Trade start condition" and adjust it.
Please note that there is no completely “reliable” strategy and some trades can take a long time to close - whether it is a trade execution, Stop Loss or closing it manually.
Creating a custom bot with your own settings
If you wish to create your own bot, select the "Advanced" tab. There are more opportunities here to customize your DCA bot.
In this "Advanced" tab, right at the top, there are "Main Settings", where you have the opportunity to give your bot a "Name", then you can select an "Exchange", one that works with the DCA bot, and then you choose the type of your bot - Single-pair or Multi-pair.
A Single-pair bot trades only one trading pair, that you choose.
A Multi-pair bot gives you the opportunity to use the same settings for many trading pairs at the same time (no more than 100 trading pairs for one bot though).
Next, move to the "Pairs" section. If you have chosen a Single-pair bot - select one trading pair for your bot to trade with. If you have chosen a Multi-pair bot - you can right here select a lot of different pairs for one bot (for example, if you select the "USDT_ALL" pairs, then all USDT pairs will be added to the bot settings).
In the "Strategy" section, select a strategy - "Long" or "Short". Depending on the way you want your DCA bot to work. If the strategy is "Long", then the bot will try to buy coins at a lower price and sell them at a higher price. If the chosen strategy is "Short", the bot will be selling at a higher price and buying back at a lower price.
An important note: Traders usually use Futures exchanges to trade short positions, borrowing coins from the exchange, and shorting their positions on it. If you want to implement a short position strategy using your spot account, you need to actually have the coins required for that short position, which means that you will need to buy them first. This is not advisable and using a short strategy on a spot exchange account is best suited for coins you already hold or want to accumulate long-term in your portfolio. The most profitable way to implement a short position trading strategy is to trade using a futures account.
Next, set up the "Profit currency" (coins the bot will take profit in).
"Quote" - fixes the profit in the transaction currency.
"Base" - fixes the profit in the coin being traded.
For example, if you trade LTC against USDT, the "Quote" setting will take profit in USDT, and the "Base" setting will take profit in LTC.
"Base order size" - enter the amount you want the bot to use for opening a deal. It is also possible to open a deal with a certain percentage of funds, not a particular amount. In this case, the base order size is a % of the total balance of a token at the time of opening a deal.
"Safety order size" - enter the amount which your bot will use to do averaging. Thanks to safety orders, there is an opportunity to close the deal with a profit, even if there was a noticeable price movement in the opposite direction from what you expected.
"Start order type" - once it receives a signal, the bot can place a "Market" or a "Limit" order. If it needs to be a quick decision to enter the deal, select the "Market" order (it may enter the deal faster, not at the best price), if there is a need for the bot to try to and enter the deal at a better price, then select the "Limit" order (it will be placed at best ASK price (for long, to prevent a slippage for big orders) and it might take a longer time to open this deal) but there will be no slippage
In the "Deal start condition" section, you can adjust the parameters the bot will use to open a deal. Here we want to draw your attention to the fact that all these signals to start a trade are currently supported on the Binance exchange spot account trading. If you select other exchanges, the display of the deal start conditions will be different (only the conditions available for the chosen exchange will be displayed).
You can combine the signals built into the 3Commas platform with each other, thereby improving and refining the start of the deal signals.
For example, we can take the technical analysis indicator offered by the TradingView "Crypto Screener" service and choose different time frames, so the bot will open a deal if all conditions match, in this example, a Buy signal should be received on all four different time frames and then our trade will be triggered.
Note: An exception is using the "TradingView Custom Signal" for the bot's Deal Start Condition, this type of signal cannot be combined with other built-in signals, they work separately.
In the "Take profit" section, set the target profitability as a percentage. Upon reaching this goal, the bot will close the deal with a "Limit" order.
You can set "Take profit type" as "Percentage from total volume" or "Percentage from base order". If it's calculated from the base order, the bot will ignore any averaging of the price from Safety Orders (if you configure any), this means if a coin is bought for $100 and you configure a Target Profit (%) to 5%, the trade will close when price hits $105. If you choose the "Percentage from the total volume" setting, the bot will calculate the target percentage using the average cost per coin which can change as Safety Orders are executed, for example, the bot opens a deal at a price of $100 and then executes a safety order at $90 buying more coins, the average cost per coin is now $95 and if your Target Profit (%) was set to 5%, the bot would close the trade when price reaches $99.75. You can read more about it here.
If you enable the "Trailing" function - the bot when it reaches the desired profitability, will activate "Trailing", which will follow the price as long as it goes further, and as soon as the price moves in the opposite direction, in this example -0.3%, the bot will immediately close this position with a "Market" order.
You can also activate "Stop Loss" for your bot, which will save you from losing all your investments in case the price dramatically moves in the opposite direction from what you expected. Sometimes there are manipulations in the market, and a strong price movement can be temporary. In this case, you can activate "Stop Loss timeout", and if a strong price movement lasts for example no more than 60 seconds, then our deal will not be closed, and our investments will be saved. You can also choose what is going to happen when the "Stop Loss" is triggered, you can choose "Close deal", or you can choose the "Close deal & stop bot" option.
One of the most interesting types of bot settings is located in the "Safety orders" section because using these options will allow you to average the cost per coin bought by the bot for each trade to a better price and make it faster to close deals with a profit. Here are the settings explained:
"Max safety trades count" - The maximum number of orders for averaging that the bot can execute during the transaction.
"Max active safety trades count" - The maximum number of safety orders that will be placed on the exchange at the same time.
"Price deviation to open safety orders (% from initial order)" - The interval between safety orders in %.
"Safety orders volume scale" - The volume of every following safety order will increase in accordance with this specified value. You can read more about it here.
"Safety order step scale" - The spacing between safety orders will increase in accordance with this specified value. You can read more about it here.
In the "Advanced Settings" section, you can set additional parameters, and the bot will start a deal only when all additional conditions are met.
When everything is set, you can view the "Bot Assistant" window for additional information on how much funds the bot will require and other useful information:
"Assistant" tab - here the available balance is displayed and also the amount that the bot will need to function properly (including all averaging). There is also the maximum deviation of the price of the last safety order in percentage and the percentage of funds used by the bot.
"Chart" tab - shows how evenly you use the funds with the bots and safety orders.
Clicking on the "Table" tab displays a detailed breakdown of each step. Here you can see exactly how much funds the bot will use in one trade, in accordance with the number of executed safety orders.
Check all the settings again and if everything is fine, click the "Create Bot" button and the bot is ready and standing by, once it receives a signal, it will open its first deal. All the following actions are automated. You simply need to check on the bot from time to time and, if necessary, make some adjustments.
How to use the Blacklist
From the "My Bots" page, you have the opportunity to add some trading pairs to the so-called “Blacklist”. Thanks to this feature the bot will not create trades on any coin pairs you add to this list that you find untrustworthy or those you simply do not want to trade with.
As you can see in our example below, we added some of the UP/DOWN coin pairs to the Blacklist and trades with these pairs will not be opened by any bots (including the Gordon bot).
Here are some video tutorials on how to set up a DCA bot!