Extra Orders are an essential part of TradeSanta bots allowing cryptocurrency traders to have a chance for making target profit with a less coin price recovery after the crypto market goes not according to user’s strategy. In this article we’ll have a closer look at this feature.
Extra orders’ main principle is averaging. Let’s say, you have a trading bot with long strategy, meaning that cryptocurrency’s price must go up for you to have profit. However, the price can go down and then extra orders will help. Your crypto trading bot will buy more coins for lesser price, thus decreasing the price required for the determined profit. With short strategy everything is similar, but inverted.
Regarding settings of the extra orders you can set up following parameters which define your strategy: maximum count of extra orders, count of real-time extra orders, step and volume in the bot settings depending on your preferences or trading balance. More extra orders will require more currency to be involved in the deal. Step of extra orders determines the deviation of the first order value after which extra order is placed.
When setting up a volume of extra orders, there are 2 possible strategies on TradeSanta.
Let’s say you want to trade USDT-BNB using a long strategy and these settings:
- Volume of the first order: 40 USDT
- Step of extra orders: 5%
- Maximum count of extra orders: 3
- Count of real-time extra orders: 3
- Take profit: 5%
Let’s say that 1 BNB is currently worth 20 USDT, meaning that the price must reach 21 USDT for you to make 5% profit.
First option – you can set the volume of extra orders equal to the volume of the first order (40 USDT). Crypto trading bot will spend 40 USDT to buy 2 BNB (20 USDT each) and place 3 extra orders with a 5% step (on 19, 18 and 17 USDT respectively).
So, if the price of BNB drops to 19 USDT the bot will spend another 40 USDT to buy additional BNB, thus decreasing the price required for taking profit (20.475 instead of 21 USDT). If the price of BNB then drops to 18 USDT the bot will again spend 40 USDT to buy BNB coins lowering the average price. In that case required price for 5% profit will be 19.95 USDT and so on.
Second option – volume of extra orders is bigger than the volume of the first order. There is a trading tool called martingale, which is recommended only for experienced cryptocurrency traders. Originally, martingale is a gambling strategy and means doubling the volumes after every loss. On TradeSanta martingale means increasing of the volume of each extra order by a coefficient from 1.05 to 2, so every consecutive extra order will have bigger volume than the previous one.
Let’s say that in our previous example the coefficient would be 1.5. In this case trading bot will spend 60 USDT on the first extra order, 90 USDT on the second one and 135 USDT on the third one, thus lowering our target price substantially more than in the first option. It can be beneficial, however this option is much riskier than the first one, as bigger part of your funds will be locked in the deal.
Hopefully, this article will answer your possible questions regarding extra orders and it’ll be clearer for you how to improve your trading results using this feature.