The volatility of any cryptocurrency is not constant.
Sometimes price fluctuations are frequent and the bot is able to make many profitable transactions, at other times the price stands still and the bot is forced to also stand idle.
The bot may also stand idle if the original trading pair does not pass the starting filters. In order to prevent the bot from standing idle, we have incorporated the possibility of enabling the automatic switching of the trading pair.
You can find on our blog an article (Example of a real bot working with the automatic switching of a trading pair) that illustrates how a real bot setting using the automatic switching of a trading pair will operate, as well as provide statistics of the bot’s work in the long term.
- 1. Automatic switching of a trading pair on a given list.
How does it work?
If the current trading pair does not pass the start filters, you can specify a list of other pairs that the bot will run sequentially until you find one that will pass the start filters.
How do I enable the automatic switching of a trading pair from a given list?
To enable this function, you need to activate the "Enable Automatic Trade Pair Switching" option in the bot settings. Next, in the "Switch Type" menu, select the "User List" option and create a list by adding the required cryptocurrencies.
- 2. The automatic switching of a trading pair based on the results of the volatility analyzer.
How does it work?
When starting operating, the bot can change in the settings the trading pair that was set to it to another one, which at that moment is more suitable for successful trading indicators of volatility. To estimate the volatility of cryptocurrencies, a volatility analyser is used to calculate the number of variable price movements in the near future. The cryptocurrency that has changed the most time is selected for the switch.
The analysis of volatility will be carried out before each new cycle of the bot’s operation, so you will work with the trading pair that is best suited for trading here and then.
It is important to not only choose the most volatile cryptocurrency, but to also eliminate the trade-risky cryptocurrencies. Such cryptocurrencies include little-known cryptocoins, very cheap cryptocoins (whose price is < 0.00000050 btc) and cryptocoins subject to pumps/dumps. It is also important to screen out cryptocurrencies for which there has been little trading volume in the last 24 hours (daily trading volume < 300 btc).
All the above volatility and trade risk indicators are configured in the volatility analyser. The volatility analyzer is available both when creating and editing a bot and separately here. You can test the volatility analyzer with different settings and evaluate the results of its work to find the appropriate settings for a particular crypto exchange and Market.
Create presets of the volatility analyzer settings to use them later for the automatic switching of a trading pair.
How do I enable the automatic switching of a trading pair based on the volatility analyzer?
To enable the automatic switching of a trading pair based on the operation of the volatility analyzer, it is necessary to activate the "Enable automatic switching of the trade pair" option in the bot settings. Next, in the "Switch Type" menu, select the option "Volatility Analyzer" after which the menu will be available to set the volatility analyzer from scratch, and will also be available the possibility to choose the previously created preset with the settings of the volatility analyzer.
How do I configure a volatility analyzer?
- Exchange. Select an exchange where you want to assess the volatility of cryptocurrencies.
- Market. Select the Market where you want to assess the volatility. This is the cryptocurrency with which trading is conducted. These are usually large cryptocurrencies, such as BTC, ETH, and USDT.
- Use Black / White Lists. You can use Black and White Lists to set only verified cryptocurrencies for automatic switching, or vice versa, to exclude all the risky ones.We recommend always using a black list to eliminate risks in trade.
- Setting period, Interval, Price Changes %. The analysis of the volatility will be carried out for the period of time specified in the settings (Period:), and which is divided into intervals (Interval:). The number of all cryptocurrencies’ various price fluctuations on the selected Market (Market:) will be counted by the specified percentage (Price change %:) in each of the intervals (Interval:) for the specified time period (Period:).
For example: For an up-to-date estimation of the volatility and selection of the most volatile trading pair, it is interesting to assess how, in the last 1 hour (Period:), divided into 1 minute intervals (Interval:), to change the prices of all cryptocurrencies on the exchange on the chosen Market (Market:). The fluctuations are counted if the price changes in the opposite direction by 0.5% (Price change %:). Since a period (Period:) of 1 hour and intervals (Interval:) of 1 minute was given, the analyzer will sequentially analyze each of the 60 intervals of the last hour for each of the trading pairs on the selected Market (Market:). If a price change of 0.5% is recorded in any of the analyzed intervals, the price fluctuation will be counted for the current trading pair.
Recommended periods (Period:) and intervals (Interval:) to estimate volatility:
- The last 15 minutes in 1 minute intervals.
- The last 30 minutes in 1 minute intervals.
- The last 1 hour in 1 minute intervals.
- The last 3 hours in 1 minute intervals.
- The last 6 hours in 1 minute intervals.
- The last 12 hours in 5 minute intervals.
- The last 24 hours in 5 minute intervals.
We don't recommend estimating volatility for periods > 48 hours, as the results will not be informative for estimating the current volatility. For the percentage of the price change (Price change %:), we recommend using values from 0.3% to 1%.
- Minimum number of price changes - This setting defines the minimum number of fixed price fluctuations for selecting a trading pair in automatic switching. When configuring this option, consider the period of time specified above (Period:) and the percentage of price change (Price change %:).
For example, if a minimum number of price fluctuations is given, only cryptocurrencies with at least 3 price fluctuations in a given period will be suitable for an automatic change of the trading pair.
We recommend using 3, 5, 10 price fluctuations.
Important: Choose the settings (Period, Interval, Minimum number of price changes) so that the intervals in the period are sufficient for an informative estimation of the volatility. The intervals in the period should not be less than 15-30. A small number of intervals in a period, such as a 15-minute period divided into 5-minute intervals, may not yield results, as only 3 intervals will be evaluated, and the desired number of price fluctuations will not occur within these intervals.
- Minimum price - This parameter determines the minimum price needed and excludes unnecessary coins whose minimum price is lower than your specified value.
- Minimum trading volume - This parameter defines the minimum trading volume (in the last 24 hours) for selecting a trading pair in automatic switching. The trading volume is calculated in the currency of the selected Market (Market:).
The more the trading volume, the safer the trade. We recommend using a minimum trading volume equivalent to 300 BTC (12000ETH, 1000000 USD).
- PUMP/DUMP filters - Here you can set a check for the presence of a pump/dump to exclude risky trading pairs when automatically switching. Several filter checks can be specified for a more precise evaluation. In each of the filters you must specify the estimated period of time (Period (hours):) as well as the strength of the pump/dump (Price change%:).
For example, a filter (15 minutes - 10%) will not allow a switch to a trading pair that has changed in price by 10% in the last 15 minutes.
After configuring the analyzer, save the bot by clicking on "Create a New Bot" if you create a new bot, or click on the "Update Bot Settings" button if you edit a previously created bot. When the bot later starts operating, the result of the volatility analyzer will be used to select the pair to be traded. In addition, if you want to see the results of the configured volatility analyzer, click the "Start analyzer" button, the analysis can take 1-2 minutes and the results will be displayed.
The result of the work of the volatility analyzer will be a list of trading pairs for which there have been the most fluctuations in recent times.
In case you run several bots with an automatic switching of a trading pair and you want each of them to do a unique trade, use the "Use unique trading pair" setting. This setting applies only to bots with the automatic switching of the trading pair enabled.