Beginner’s Guide to Crypto Trading Bots — Part 13 —Bot Configuration Basics

The settings of most of today’s trading bots are like cars: automatic or manual.

C.W.Morton

Jun 26, 2024

The settings of most of today’s trading bots are like cars: automatic or manual.

Source : Straico AI. Prompt : Trading Bots as Race Cars, Manual vs Automatic

Bot Configuration Basics

AI Strategy or Customized Configuration?

In 2024 many trading bots have new A.I. settings that are pretty easy to use.

These AI generated defaults will usually analyze recent price history for you and create a default bot configuration optimized for that moment.

Even though these new AI Strategy configuration profiles are super convenient, they have a weakness.

At the time of writing this first edition of the Beginner’s Guide- the AI Strategy in Pionex cannot dynamically adjust while the bot is running. If market conditions change it may become necessary to stop the bot and restart it with a new configuration to maximize your profit potential.

The AI Strategy does not create a bot that will dynamically maximize your profit without any user input, if that is what you were thinking that they would do. If they did that, they would probably create the perfect trading bot. Perish the thought…. For now anyway.

AI settings on other platforms may be more advanced, but there are so many different platforms with different things they are calling “AI”, that covering all of those in this book would be beyond the scope of a Beginner’s Guide.

Customized Configuration

With customized or manual configuration you can change every available setting and customize it to your preference. Configuration options will be different for each bot type but most will have basic options allowing you to define buy and sell thresholds, spread price limits, stop-losses, etc.

The AI Strategy is usually configured on the side of safety, and therefore, they can be less profitable than a manual configuration.

Very often I will take the AI generated settings and modify them slightly in the custom configuration panel, taking advantage of the AI’s analysis of recent movement, but changing it a bit to attempt to maximize my profit.

Source : Straico AI. Prompt : Bot Mechanic Working on a Bot

Advanced Settings

These settings usually allow the user to select Stop-Loss and Take-Profit prices or other parameters unique to the function on that particular bot.

The Stop-Loss price is the lowest at which the bot will automatically sell the base currency to offset possible losses.

The Take-Profit price is the opposite. It is the profit ratio threshold where your bot closes at a profit automatically. If your bot goes through a few rounds and reaches your target profit percentage, it closes and captures the profit for you.

Different Bot Configurations for Different Cryptos

Each crypto’s price behaves a little differently, and you cannot always use the same configuration on different coins. I have found the need to change the configuration for each coin depending on what that coin price is doing at the moment.

While it is true that during bull market price movement Altcoins almost always seem to ride BTC’s coattails going up, there are just as many times that ETH or LTC or any other Altcoin will experience their own price movement independent of Bitcoin.

You will need to test and find the right settings for each different coin.

Chapter 4 Key Points:

AI Strategy generates a default set of starting values to create a bot with based on recent price history
AI Strategy will NOT dynamically optimize your bot while it’s running, they do not adjust to changing market conditions
Customized Configuration will allow you to modify bot settings according to your own discernment, knowledge of trends, or simply to allow you to try to be more profitable by taking more risk than the default settings would be aiming for.
Different Cryptocurrencies will require different bot configurations because price action is not identical. Even though most coins and tokens tend to follow Bitcoin’s lead during market movements, this is not always the case on a regular basis.

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