Trading using DCA Bots on 3Commas just became more powerful than ever.
We’ve released a significant update that gives you more control over how your DCA Bot operates when markets are trending up and down.
These changes mean it’s now easier than ever to set your DCA Bot up to automatically take advantage when prices are "rising" (going in the profiting direction) — and automatically protect your capital when they’re trending "lower" (going in the losing direction).
The update delivers two fundamental changes:
Automated Reinvesting.
Automated Risk Reduction.
NOTE! These features are supported only on the web version!
Automated Reinvesting.
You can now set your DCA bots up to reinvest a percentage of your realized profits automatically. Your bot will calculate how much to reinvest based on the initial investment, then increase new deal sizes accordingly. You just need to type in the exact percent of the profit to be reinvested or use a slider to adjust the setting:
100% - all your profit will be reinvested into the bot's trading amount. Thus, the order sizes will be increased proportionally.
0% - the profit will remain on your balance, and the bot will continue to trade with its initial amount of funds.
When reinvesting, the DCA Bot will calculate the percentage of the reinvested funds relative to the initial investment (base order + safety orders). It will increase the new deal size (both base and safety orders) by that percentage.
IMPORTANT NOTES!
This feature is available only for users on the Pro (old and new), Expert and Custom plans.
The Reinvest feature is available only if you choose QUOTE as a profit currency for the Long bot and BASE for the Short bot.
If you edit the active Multi-pair bot with enabled Reinvesting and change at least one trading pair in this bot, the Reinvestment feature will automatically be switched to 0%. Make sure to reenable it if needed.
Pay attention to the MIN order size for some trading pairs, especially on the Futures market. Some may have too big sizes, so reinvesting will not be applicable if the profit is much smaller than the min order size.
For example, for SOLUSDT/USDT (perp. Futures contract) lot step limit is 1 contract on Binance Futures. Let's assume the price of 1 SOL perp. contract is around 43 USDT. So it’s the minimum amount that we can increase order size by. Let's also assume that the bot has no Safety orders and has a profit of 10 USDT. It's not enough to add to the Base order, so it will remain the same, even if the reinvest is set to 100%. If, for example, the bot has 1 Base order and 4 Safety orders, and the profit is 300 USDT, and the reinvest option is set to 70%, the amount to be reinvested will be 302 * 70/100 = 211 USDT. However, we need to divide it into all orders, in this case, it’s 5 (1 base order + 4 safety orders), it’s around 42.2 USDT per order, that's less than the exchange limit. Thus, the reinvestment is not eligible yet. If you increase the reinvest to 100%, it will work as long as the profit is enough to reinvest into all orders.
Let's compare two different trading strategies.
Let's assume the daily investment is $100, the trading is done without transaction fees, and the daily profit target is 1%.
Strategy 1:
In this strategy, we trade $100 daily for 365 days, and each day we close one trade with a take profit of 1%. The profit earned on the first day will be $1, and the total amount invested will be $36,500. The total profit earned at the end of 365 days will be:
Profit earned on day 1 = $1
Profit earned on day 2 = $1
...
Profit earned on day 365 = $1
Total profit = $365.
Strategy 2:
In this strategy, we will reinvest the profit earned each day into the next day's trade. The profit earned on the first day will be $1, and the total amount invested will be $36,500. However, we will not withdraw the profit and reinvest it on the next day. The total profit earned at the end of 365 days will be:
Profit earned on day 1 = $1
Profit earned on day 2 = $1.01 (1001.01%)
Profit earned on day 3 = $1.02 (1011.01%)
...
Profit earned on day 365 = $4.58 (365*1.01%)
Total profit = $986.55.
As we can see, Strategy 2 generates a significantly higher profit of $986.55 compared to $365 for Strategy 1, due to the effect of compounding. Therefore, reinvesting the profits into the next day's trade is a more profitable strategy.
Please remember that the amount available to be reinvested may not fit the exchange's trading rules if it is very small. Please do not be concerned - as the profit increases, the bot will increase order sizes to match the step size the exchange's trading rules will permit.
A couple of notes about how Reinvested value is calculated
If the Reinvestment feature is turned on, the Total profit will represent the part of the profit that was not reinvested:
Thus, if the Reinvestment is set to 100%, then Total profit column will display 0 profit.
The Reinvested column is calculated in the way shown in the example below:
We assume our Reinvesting parameter is set to 70%.
The first trade is closed with a profit of $10. It means that $3 will remain on the balance, and $7 will be reinvested and spread out to all orders in the deal (Base and Safety). In the Reinvested column we'll see $0 (nothing has been reinvested yet).
The second trade will open with reinvested $7; thus, the Reinvested column will show $7. Let's assume the second trade closes with a profit of $14.3. And $4.3 will remain on the balance, and $10 will be reinvested.
The third trade will open with $17 reinvested, and in the Reinvested column, you will see $24 = $7 + $17. Let's assume the third trade was closed without profit, $0.
The forth trade will open with the same $17, but in the Reinvested column you will now see $41: $7 reinvested in the 2nd trade, $17 reinvested in the 3rd and $17 reinvested in the 4th trade. It's calculated as a sum of all reinvested funds in each trade. Let's say this traded closes with the $10 profit: $3 on the balance, $7 reinvested.
The fifth trade will open with $24 reinvested, but the Reinvested column will show now $65. Here is the table with the example:
Deal number | Profit | Reinvesting from profit | Reinvested in the deal | Total reinvested |
1 | 10 | 7 | 0 | 0 |
2 | 14.3 | 10 | 7 | 7 |
3 | 0 | 0 | 17 | 24 |
4 | 10 | 7 | 17 | 41 |
5 | 0 | 0 | 24 | 65 |
Automated Risk Reduction.
Just as you can now automatically reinvest profits, you can also set DCA bots to automatically protect your funds from further losses when the market’s going against you. Your bot will decrease future deal sizes based on past losses.
You can set the Risk Reduction feature manually by typing in the proportion or using the slider.
100% - the amount of loss from the closed losing trade will be deducted from the initial amount of the bot's funds and the order sizes will be decreased proportionally.
0% - the bot will use the same amount of funds and the order sizes will not be decreased. Thus, the bot will take additional funds from the balance and this can lead to the Insufficient Funds error.
Although the Risk Reduction feature is located in the Stop Loss section, it will work even if a trade is closed manually or through a signal rather than via the Stop Loss. So you need to turn on the Stop Loss feature, set it far away, like 99%, and Risk Reduction will be applied after the trade is closed manually or with the signal.
Here is a simple example.
Let's assume you have created a DCA bot that opens one deal at a time and can use a maximum amount of 500 USDT with the following settings:
A Base order size is 100 USDT,
4 Safety orders of 100 USDT each.
Enabled Stop Loss,
Risk Reduction is set to 100%.
You opened a deal, and it closed with a loss of -20 USDT.
This will reduce the bot's usable amount proportionally as follows:
A Base order size will become 96 USDT,
Each Safety order size will become 96 USDT too,
So the total maximum amount that the bot can use will become 480 USDT.
IMPORTANT NOTES!
1. The Risk Reduction feature can be accessed only if the Stop Loss feature is turned on!
2. Single-pair or Multi-pair types of bots will affect Reinvestment and Risk Reduction. Here is how they calculate it in Multi-pair bot:
Reinvestment: When a bot opens a deal, the bot looks at the current profit of the bot and distributes it following the percentage for all possible orders of the deal (base order + safety order) * a number of maximum active deals.
Risk Reduction: When a bot opens a deal, the bot looks at the current loss of the bot and distributes it following the percentage for all possible orders of the deal (base order + safety order) / a number of maximum active deals.