How The Martingale Bot Strategy Works: Trading (Crypto)
The logic of trading with a Martingale Bot is to exploit the "buy the dip" and "sell the bound" in which each order to go down is larger than the previous one so for example if I am long, I could earn even if my closing price is lower than my entry price. Obviously I will open "long" if I identify a bullish structure, the idea is to increase the size (buys) in the dips. When the market goes down, purchases are increased and when the market bounces up I make a profit. The opposite applies if I open a "short" order, where I go short during the "dead cat bounces" (I increase when the price bounces upwards and when the price falls I make a profit). In this case the stop loss is upwards, the take profit is downwards. In general it also works well in ranges and for scalping (with smaller sizes). It can be applied for example on Bybit, going to the Derivatives/USDT Perpetuals/BTCUSDT sections and finally to the right tools/Futures Martingale.. Here are some features to operate:
"Investment" is what I decide to put into play (I can also use leverage. If I have 500 spot USDT and use 2x leverage I will have a capital of 1000 UST). Margin multiplied by leverage equals position size. The maximum size is given by the total amount invested for leverage.
"Profit Target" is the % of profit calculated in 1 round on the total investment so if I invest 500 USDT and the profit target is 10%, all operations will be closed when I have a profit of 50 USDT (regardless of what happened before or from orders remaining until the round is completed). If an uptrend or downtrend is very strong, I can set a higher profit target but obviously with the risk that it will not be reached.
"Stop Loss" also in this case the loss is calculated as a % of the total investment. If it is 20% on 500 USDT, trades with loss of 100 USDT will be closed. Obviously I'm not going to set it randomly but for example to a lower low or lower high.
"Entry Price" bot activation price (where the first and subsequent orders will be executed).
"Open Position Order" is the first order executed (1) for each round. "Max Additions" number of orders following the opening one (9). For example 1+9=10 total orders --> rounds.
“Price Decrease” is the positive or negative price difference between average holding cost (of previous executed orders) and the next limit order. The more orders are executed, the lower the average holding cost (from here the Price Decrease is subtracted to open the next position). Next order=price decrease (%) multiplied by average holding cost.
"Position Multiplier" is the incremental (exponential) size factor between 2 subsequent orders (multiplication between the previous order and the subsequent one).
"Position Balance" is the value of the open position.
"Margin Pending Order" is the remaining margin of open orders it very great.
What are the risks? If I go against the trend and the market continues in that direction for a long time without ever bouncing, I go into liquidation (or stop loss).
