The volatility of any cryptocurrency is not constant.
At some points in time price fluctuations are frequent and the bot makes many profitable transactions, at other points in time the price stands still and the bot is forced to 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 made automatic switching of the trade pair.
Read an article on our blog with an example of a real bot setting using automatic switching of a trading pair, as well as statistics of its work in the long term Example of a real bot working with autoswitching of a trading pair.
- 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 automatic switching of a trading pair from a given list?
To enable this function, you need to activate the "Enable Automatic Trade Pair Switching" menu 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. Automatic switching of the trade pair based on the results of the volatility analyzer.
How does it work?
When starting the work, the bot can change the trade pair set to it in the settings to another one, which at the moment has 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 more times is selected for the switch.
The analysis of volatility will be carried out before each new cycle of bot operation, so we will work with that trading pair that is best suited for trading here and now.
It is important not only to choose the most volatile cryptocurrency, but also to eliminate the trade-risky cryptocurrencies. The risks 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 automatic switching of the trading pair.
How do I enable automatic switching of the trade pair based on the volatility analyzer?
To enable automatic switching of the trade pair based on the operation of the volatility analyzer it is necessary to activate the menu "Enable automatic switching of the trade pair" in the bot settings. Next in the menu "Switch Type" select the option "Volatility Analyzer" after which the menu will be available to set the volatility analyzer from scratch, as well as 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 Market where you want to assess volatility. This is the cryptocurrency to 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 risky ones.
We recommend always using blacklist to eliminate risks in trade.
- Setting period, Interval, Price Changes % - The analysis of volatility will be carried out for the period of time specified in the settings (Period:) divided into intervals (Interval:). The number of different price fluctuations of all cryptocurrencies 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 up-to-date estimation of volatility and selection of the most volatile trading pair, it is interesting to estimate how in the last 1 hour (Period:) divided into 1 minute intervals (Interval:) how to change the prices of all cryptocurrencies on the exchange on the chosen Market (Market:).We will count the fluctuations if the price has changed in the opposite direction by 0.5% (Price change %:). Since a period (Period:) of 1 hour and intervals (Interval:) of 1 minute is given, the analyzer will analyse sequentially each of 60 intervals over 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 trade pair.
Recommended periods (Period:) and intervals (Interval:) to estimate volatility:
- last 15 minutes in 1 minute interval
- last 30 minutes in 1 minute interval
- last 1 hour in 1 minute intervals
- last 3 hours in 1 minute interval
- last 6 hours in 1 minute interval
- last 12 hours in 5 minute intervals
- 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. As a 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 trade 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 automatic change of trade 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 informative estimation of volatility. The intervals in the period shall be not less than 15-30. A small number of intervals in a period, such as an estimate of a 15-minute period divided into 5-minute intervals, may not yield results, as only 3 time intervals will be estimated in which the desired number of price fluctuations will not occur.
- Minimum price - This parameter determines the minimum price 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 trade pair in automatic switching. Trade volume is calculated in the currency of the selected Market (Market:).
The more 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 more precise evaluation. In each of the filters you must specify the estimated time period (Period (hours):) as well as the strength of the pump/dump (Price change%:).
For example, a filter (15 minutes - 10%) will not allow to switch to a trading pair, which has changed in price by 10% in the last 15 minutes.
After configuring the analyser, save the bot by clicking "Create a New Bot" if you create a new bot or "Update Bot Settings" button if you edit a previously created bot. When the bot is later started, 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 the most fluctuations have been in recent times.
In case you run several bots with automatic switching of a trading pair and you want each of them to trade unique, use the "Use unique trading pair" setting. This uniqueness setting applies only to bots with automatic switching of the trade pair.