1. Martingale + Smart trade?
When you see the Martingale bot (trailing mode), you may be at a loss and feel very unfamiliar with this mode. In fact, Martingale bot (trailing mode) is a product of the Martingale bot superimposed on the smart trade bot.
First of all, you can take a look at our tutorials for Martingale bot and Smart Trade bot as follows:
Martingale bot: https://www.pionex.com/blog/whats-martingale-bot/
Smart Trade: https://www.pionex.com/blog/smart-trade-en/
After reading these two tutorials, I believe you have some in-depth understanding of the Martingale bot and the Smart Trade bot, then you will definitely start to think about why I need to superimpose the smart trade function on the martingale bot ?
2. Why you need the Martingale bot (trailing Mode)?
The volatility in crypto space is much greater than traditional finance, so it is easy for the price to exceed your original expectations. When setting the Martingale bot, you need to predict the volatility of the price first, so as to set the ratio of how much to cover the position for each drop. However, if the price drops too much, it may fall below the last Martingale safety order and cause a loss. If the price suddenly rises, it will be sold at a relatively low price, resulting in not eating a great trend profit.
Martingale Bot trailing mode can solve such a pain point very well
We want to trade the DOGE/USDT trading pair, and set price scale and take profit ratio both as 1% with Martingale bot. Then according to the K-line chart below, it can be seen that in the first half of the time, Martingale bot could perform well and help earn the profits in this volatility market. But it can be seen that in the last half marked in red, DOGE had a sharp decline. Due to the announcement of Elon Musk, there was a sharp rise and then a big fall after. Under such a market, the ordinary Martingale bot had a period of time being trapped, and then only took the 1% profit, missing a big trend profit.
And if we use the Martingale trailing model, we will be better at the timing of buying and selling. For example, we set the price scale and take profit ratio both as 1%. At the same time we also use the trailing mode setting with a 0.5% trailing ratio. When the currency price drops to trigger the trailing buy price, the bot will automatically monitor the price changes, wait until the price drops to a certain low price, and then buy some position once the price rebounds by 0.5%. Similarly, when the price rises to trigger the trailing sell price, the bot will wait until the price rises to a high, and then it will sell the position with a 0.5% withdrawal. The performance is somewhat similar to the following two pictures:
Therefore, the actual performance is as shown in the pictures below:
It can be seen that the income of ordinary Martingale is much lower than the trailing Martingale, and its anti-risk ability will be lower than trailing Martingale.
Although the Martingale (trailing mode) is more suitable for crypto with large fluctuations, it is also more difficult to set up. How to set a good trailing ratio requires a long time of experience and even professional backtesting. Let us introduce the meaning of each specific parameter below for you to have a deeper understanding.
3.How to configure the Pionex Martingale bot (trailing mode)?
Visit the configuration page of Martingale Bot under the Trade tab and select trailing mode.
The trailing mode is designed for the seasoned trader so there’s no AI suggestion within this mode. Traders need to have their own point of view on assets and every detail of the parameters.
Here is the list of explanations for each parameter.
Price scale settings: the bot averages down the cost within each deal, with the price scale the bot has a better opportunity to enter a position with a better price for each safety order. There are two parameters in the price scale settings, Price Scale Rate and Max. Rebounce Rate. The Price Scale Rate is the percentage for the bot to start another safety order with trailing buy order type. After the condition has been met, the bot will start trailing buy and screening for the moment to execute the Safety Order. It’ll execute the order as soon as the trailing deviation has been met.
Investment: the total investment for the bot. With the trailing mode, the bot executes the orders with market order which might result in a bigger slipperage with larger investment. To avoid this, we have set some limitations using this bot. The investment for each bot has a cap of $10,000 USDT and with limited liquid trading pairs. For the supported trading pairs for trailing mode, feel free to visit the announcement here.https://pionex.zendesk.com/hc/en-us/articles/4411678894361-Martingale-Trailing-mode-trading-pairs-support-list
The advanced setting is similar to Martingale’s standard mode:
Volume scale: How many times the amount of this time is the previous time when the position is replenished. For example, if you choose 1.5 times, the investment amount for each safety order is 1, 1.5, 2.25…, so you can calculate the specific investment amount for each safety order based on the total investment amount.
The max safety order: The maximum number of safety orders in each round. In each round, the bot will evenly divide the total funds into several shares. The greater the maximum number of safety orders set, the less funds are used for each share each time, but the lower the price it can buy.
Trigger price (optional): This bot will start when the current price reaches a setting price
Stop Scaling price (optional): After this price is exceeded, no matter whether the currency price rises or falls, no further purchases will be made. This parameter is mainly to prevent the currency price from rising suddenly and then buying at a high level after a correction, which may cause it to be trapped.