What's Spot DCA (Martingale) bot and how to use it?
Martingale is one form of DCA. Martingale is a trading strategy based on the concept of doubling the trading size after every loss. With a doubled position size each time after losses, the size of the next profitable trade will exceed the combined losses of all previous trades with additional profit. In simple terms, if you lose a trade, you double your next trade to recover your losses and hope to make a profit.
The Martingale strategy may potentially earn long-term growth by taking the fluctuating profit from cycles of rebound (if trading in a long direction), or correction (with short direction), with the aim to minimize losses on the overall purchase.
How does our Spot DCA (Martingale) bot work?
Users begin the trading cycle by selecting their risk profile via a series of parameters (or choosing from conservative, moderate, and aggressive pre-set parameters under the AI-strategy option).
This strategy starts by placing an initial trade and will continue placing more trades if the asset price drops by a set percentage. Each new trade is larger than the last. The process stops once a target profit is reached, the maximum number of trades is hit, or the user’s stop loss limit is triggered.
Traders use this strategy when they believe prices will rise eventually, buying more when prices drop to average out the cost. It’s commonly used in volatile or sideways markets to take advantage of short-term price swings.
How do I set it up?
On the web
Navigate to Trade, select Trading bots
Select Trading bots from the menu once you selected Trade
Select Spot DCA (Martingale) from the Bearish category
Select Spot DCA as your trading bot style
Enter parameters manually, copy lead traders' bots, or use backtested AI parameters, and confirm the total investment amount to create a Spot DCA (Martingale) bot
Note: after you create a bot, the initial funds will be isolated from your Trading account and used for bot trading only.
Set your bot with your preferred parameters
There are several options on how you can set your bot:
Set myself: set parameters based on your own analysis of the market.
Set myself — auto fill: automatically fill in parameters recommended by the trading bot, based on backtested strategy.
AI strategy: use the parameters recommended by backtested strategy (These parameters are based on a weekly backtest of this pair).
Lead bots: copy lead traders' winning bots on the Marketplace in one-click.
What are the DCA trading parameters?
Price steps: percentage difference between two consecutive safety orders, denominated in quote currency.
TP (Take Profit) target per cycle: when the TP price is triggered and the order is fully filled, the bot will end the current cycle index and start the next one as specified.
Initial order margin: first order initiated by the DCA bot at the start of each trading cycle.
Safety order margin: safety orders will trade incrementally in each trading cycle, to lower the average cost of the trading pairs being traded, and help to achieve the take profit target faster.
Max safety orders: the maximum number of safety orders that can be placed in a trading cycle. Actual number of placed safety orders may be determined by your margin situation.
Amount multiplier: applied to the investment amount for placing the next safety order. It affects the aggressiveness in averaging the entry prices of your investments. For example, with a safety order amount = 100 USDT, multiplier = 2. Safety orders will be placed:
100 = (2*0 × 100)
200 = (2*1 × 100)
400 = (2*2 × 100), and more
Price steps multiplier: applied to the price step for placing the next safety order. It increases or decreases the price gap between safety orders. For example, with a price step = 1%, multiplier = 2. Safety orders will be placed when the price changes:
1% = (0 + 1 × 2*0)%
3% = (1 + 1 × 2*1)%
7% = (3 + 1 × 2*2)%, and many more
Multiple parameters are available for selection
Learn more about other trading bots available here.