Bitsgap Trailing Down When Out Of Range

Bitsgap Trailing Down When Out Of Range

Trailing down when out of range on Bitsgap is something I highly recommend that you don't do if you find your bot out range.

I thoroughly tested this strategy even to the point where I had someone write a custom script to automate it.

Let's say, for example, the market price has fallen out of your grid considerably and you've decided to trail down.

Your sell orders are moved into our available balance. For every buy line you add as the price trails down, more base currency is then shifted into your available balance.

Now, what you do not want to do in my personal opinion is when all of this base currency is moved to your available balance, is sell that available balance to fund more buy orders.

That is something that you do not want to do!

Now, why is that the case?

Well, put simply the base currency that has been shifted out of your bot is still being used to calculate your change percentage.

So if you sell it, the bot still thinks that you have it and it still is referencing your change percentage or is using it in the calculation for the change percentage.

If you sell it, it doesn't update. It still thinks you have it. So now you can understand the issue.

You're in a position where your metrics are way out, your change percentages off and you can't actually realize how your bot is performing.

The only way you can reference how your portfolio is tracking is using your exchange balance, what you started with and what it is now.

Because no matter how hard you try, if you have sold base currency to fund every buy line underneath, and you repeated the process, you will not be able to figure out and determine your change percentage.

It will be off because you've realized losses,  then used that to fund and then it's continued to trail down and these metrics will not be accurate, no matter how hard you try, you've already sold it.

You're probably thinking Simon, how do you know this?

I was using this exact trailing down strategy, selling my base currency into USD to fund my additional trailing down buy lines, hoping that my bot profit would offset the loss.

Now, how deep did I go?

As mentioned previously I had a script written in Python, which would hit my exchange, check it every 15 seconds, and it would sell my base currency into USDT or BUSD, whichever I was using. I tested it for about a week. It came out very, very unprofitable. I also figured out all the issues that happen within your reporting and your balances when you do this.

So it's definitely something in which needs to be avoided.

If you find yourself in this position you need to reference your exchange.

And if your bots are currently in this position (this is not financial advice), but you can either choose whether you..

  1. Close your bots, and never implement that strategy again.
  2. Or if you you're happy with them just chipping away at that loss you have incurred, you are going to have track towards your original holding.

This is just my opinion and experience regarding trailing down when out of range of Bitsgap and I tested this way back in October 2021. I've had people in my Youtube comments saying 'it's not a reason not to use that strategy', who have no evidence or experience, with that I say, by all means ignore my words of caution and try it out for yourself.

Please anyone who hasn't implemented this strategy or wants to test this strategy, I would say steer clear.

It messes with a lot of your metrics, in saying that there may be a time when it may work. But you're gonna have to be really on the money. And again, it's gonna mess with the metrics.

Safe trading,

Simon