Strategy for squeeze bot

The strategy for the squeeze bot focuses on a moment when the price rapidly breaks out down but reverses very quickly.

  • The bot places a limit order for a percentage change defined in the bot config. The bot measures the percentage change from a previous candlestick (from its low by default). When a rapid breakout to the limit order occurs, the bot buys. Further, the bot places a sell order for a percentage change. In this case, the bot measures the percentage change from the buy level. After the execution of a sell order, the cycle continues (example in the image below).
  • Watcher bot helps to find an asset for the squeeze bot by notifications that come to a telegram channel. Monitoring the chart and measuring the percentage change of breakout on your own is handy as well.
The next step is backtesting to find a valid config. In the case of a new local max of the price, the configs become risky because they worked on a horizontal trend (sideways trend). Fast correction occurs when an asset reaches a growth phase max (with a large percentage change). The historical data of previous fast rises of an asset helps in measuring an approximate percentage change. As soon as there is a new local max of the price, the bot's work with a less percentage change becomes dangerous. Stop the bot or adjust the settings. Use the "Start trigger" box as the max buy level to protect the bot from quick pumps. Define a price above which the bot doesn't buy and disable the "%" checkbox.

How to choose a percent for the sell trigger

The most effective percent for the sell trigger is not more than 1/3 of the percent for the buy trigger. So, when the buy trigger is 1.5%, then the sell trigger is not more than 0.5%. Backtesting determines the percent for the sell trigger for each asset individually. A fast fall of an asset price when the sell trigger percent is too high may lead to losses.

In addition to the strategy, the bot fits for scalping
  • Define a deposit that suits for work on an asset;
  • Create two squeeze bots with buy and sell limit orders that are visible on the screen;
  • Split sell orders into two equal parts. The first gets a small profit after what it is possible to set a stop trigger on a breakeven level for the second that waits for the zone of  significant volatility.
  • The "Binding" and "Time-frame" are irrelevant, but the bot updates the order every minute when the 1-minute time-frame is on. It can block a shift of the limit at the wrong time.
These steps simplify trading and save time for creating orders because the bot automatically creates an oncoming limit order.

Extra tips:
  • A safe config is a config that worked out for 1-3 candlesticks.
  • Optimize the bot's config to buy in a low of a candlestick of its time-frame.
  • The work of the squeeze bot is "safe"  when an asset is on growth. All breakouts reverse, and there is an interest in the asset.
  • When the price reaches a vital level or a downtrend is on the way, reconfigure the squeeze bot for a greater percentage change. It avoids a bot's stuck at the top. In such situations, a rapid correction occurs (with a wide percent of change).
  • Use the "Once per candle" checkbox on more than 1-minute time-frames.
  • When an asset is rapidly losing daily volumes and the volatility is greatly reduced, increase the percentage change for buy order or turn off bots.
  • Keep an eye on BTC. When BTC approaches the lower level of range/figure/support, traders should expect a loss of interest in altcoins and strong squeezes or dumps of the market.
Test the strategy with small orders, study coins, and change config according to the market situation. A bot configuration cannot be profitable for a long time.
Дата создания: 13.03.2021 19:31      Обновлено: 13.07.2021 08:23
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