2 years ago
A Redditor has created an automated dip-buying bot that beats dollar-cost averaging into Bitcoin by astir 10%.
While a bullish backdrop emerges successful February, spare a thought for the traders trying to clip the market. One savvy trader by the sanction of Samjhill connected Reddit has built a trading tool that outperforms dollar-cost-averaging (DCA) for buying Bitcoin (BTC).
DCA is the strategy successful which investors bargain a tiny magnitude regularly careless of terms fluctuations. It works successful opposition to traders keen to get the lowest entry, timing the dip to perfection and avoiding “catching a falling knife.”
The aptly named “Buy the Dip Bot” aims to “get the champion terms for a fixed plus by utilizing a bounds strategy.” Inspired by different Redditor who suggested a manual limit-buy-order strategy for getting the champion terms entry, Sam took the thought 1 measurement further, coding up a dip buying bot.
The bot places bounds orders astatine respective intervals beneath the existent terms and if an bid gets executed oregon canceled, it starts again. Using tech from AWS, Python, Lambda, DynamoDB and React.JS portion hosted connected Github, the outgo to tally is low, “about $5 per month.”
While the bot has been beavering distant since December, it deed a maiden milestone yesterday. Reaching profitability versus regular dollar-cost averaging, “the price-per-coin vantage is astir (cheaper) 5-10% close now, which you could besides deliberation of arsenic getting that overmuch much coin for your money,” Sam told Cointelegraph.
The bot runs a backtesting room to enactment retired the champion introduction points for the bounds buys. A analyzable process, the enactment paid off, culminated successful a “winning strategy.”
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When asked by Cointelegraph if helium would urge the bot arsenic opposed to regular DCA, Sam replied it depends connected wherever you are successful your BTC journey:
“For radical conscionable starting out, regular DCA astir apt makes much sense, since your extremity is astir apt to stack arsenic galore coins arsenic possible. For those aboriginal successful their journey, they mightiness person a decent stack already and privation to minimize expanding their outgo basis, and truthful mightiness payment much from this."Sam, who archetypal learned of Bitcoin astir 2013, added that helium is doing some DCA and the bounds strategy "to get a much adjacent curve of coin growth.”
While the aboriginal is presently Bitcoin orangish for the trading bot, Sam built the strategy for casual integration with different coins. Ethereum (ETH) features connected the Github page, and Sam hints helium whitethorn rotation retired different coins to production.
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