Bitcoin Trading Strategies – How to Utilize Dynamic Drop Loss and Dynamic Roof In to Catch the Bottom
Today, I will be showing how I will be utilizing both the Dynamic Drop Loss and Dynamic Roof In safeties for the bitcoin bot software, which is Haasbot to catch the bottom of this bear market with our bitcoin bot in conjunction with our bitcoin trading strategies. The idea behind this bitcoin trading strategy is to have the Dynamic Drop Loss safety get us out of the market, when the price drops more than 2% over the course of 4 hours. This will basically get us out of the market, but we also need a way to get back into the market, aside from our indicator (which is Regression Slope Cross). In order to get back into the market with our bitcoin bot, we will be using Dynamic Roof In, which will get is into the market if the price of bitcoin rises more than 3% within the same time frame of 4 hours, which would signify a recovery, particularly at this point in the price. This is one of the best bitcoin trading strategies to use in a bear market in order to catch the bottom.
Using the Dynamic Drop Loss
The dynamic drop loss safety works by evaluating the price of bitcoin as a percentage over time. For our specific bitcoin trading stragies, 98% at 240 minutes, means that if the price of bitcoin drops more than 2% within the course of 4 hours, then the bot will execute a sell, which is to preserve the majority of our trading investment while taking a small loss. The key to this is to get out before we reach the bottom of that particular dump. In this case, a 2% price drop over the course of 4 hours looks like it will work quite well in these market conditions, as it is noted as a “free fall” or “falling knife.”
Using the Dynamic Roof In
The dynamic roof in safety works by buying you back into the market when the price rises over X% over x time, which in this case is a 3% rise over the course of 240 minutes (4 hours). It is important to have the same time length as the dynamic drop loss so that it will work in conjunction with the dynamic drop loss. It should be also noted that a 3% rise in the price within the timespan of 4 hours would definitely signify a trend reversal, or at the very least a small uptrend as illustrated by our bitcoin trading strategies. The roof in price changes every 4 hours so it will follow the price as it goes down, as illustrated in the image below.
Overview of our bitcoin trading strategies
The whole goal of this strategy is to work in conjunction with our trading indicator. The trading indicator will generally trade well in these market conditions, but this is also a way to ensure that if there is a massive drop in the price, the trade bot will not buy back in until it has reached the bottom via either the Dynamic Roof In, or the trading Indicator, which in this case is Regression Slope Cross. This is great because not only will this set up try to find the bottom, but it will also resume trading through our indicator once it finds the bottom, so we can capitalize on the bounce that will be generated from trading at the bottom. I hope you enjoyed this post and we will write another post about more bitcoin trading strategies for different bitcoin bot software as the market conditions allow.