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Now that ITF has teamed up with the Crypto Trading Bot Platform Zignaly to make trading on our signals and alerts even easier for our traders, it’s important to look at the different settings provided on this platform. This post is intended to help familiarize you with all of the options available, and to show some potential settings for starting out.
Firstly, it has to be said that settings will vary based on the individual, and should be evaluated on numerous factors, including: risk-tolerance, trading preference, available capital, total net worth, and more.
It is recommended that you experiment with the settings on your own to find out what works best for you personally. We want to remind you that crypto is a high-risk asset class, and the following is not investment advice. Please see the full disclaimer at the end of this post for more details.
With that said, let’s take a look at the different options currently available, explain each, and then conclude with some possible settings to get you started.
Choose which coins you want to accept external signals on.
You can currently choose between all the base currencies currently available on Binance: BTC, ETH, BNB, and stable coins (USDT, USDC, PAX).
This is the amount in BTC that you will be invested in each position.
For non-BTC pairs, this amount will be exchanged to the appropriate coin.
The percentage specified in this option will be applied to the suggested price from the signal (or the price when the signal arrived if none was recommended) to calculate your limit price.
For example, say your Zignaly receives a signal for the XXX/USD market, and the price of coin ‘XXX’ is equal to $100 USD. If your Buy Price Deviation is ‘2%’, this would mean that Zignaly will place a buying order on the exchange with a limit price of $102 USD. Conversely, if your Buy Price Deviation were at ‘-2%’, then the limit price would be $98 USD.
This is the max time (in minutes) that the system will wait for the buying order to complete.
If your position has not been filled after this time has elapsed, your buy order will be removed from the exchange and canceled.
This is the max time (in hours) that you will keep a specified position open. After this time elapses, if a position is still opened, it will be closed at the current market price.
Using a Stop-Loss Order will help you limit your losses if the market goes in the opposite direction to what you thought.
If the price falls from your average buying price to this percentage, then the position will be closed with a market order.
This option has two parameters: Trailing Stop Trigger, which determines when the trailing stop will start, and the Trailing Stop Distance, which is the distance between the higher price and the current price.
If the price falls below this distance, then a market sell order will be placed, and the position will be closed at the current market price.
You can use trailing stop for a long position by setting your trigger below the current market price, or use trailing stop for a short position by setting the trigger above the current price (however, this is not currently available on Binance).
Trailing Stop is designed to protect gains by enabling a trade to remain open and continue to profit as long as the price is moving in the trader’s favor, but closes the trade if the price changes direction by a specified percentage.
This approach is not generally used as an entry order, but rather when you already have an open favorable position that is accumulating profit. The main benefits of using the Trailing Stop are threefold:
This means you can ride a trend while likewise having an effective exit strategy in place. For ease of explanation, rather than using a percentage value (which is how you will set your Trailing Stop in Zignaly), let’s look at an example using absolute value:
In the case of an open long position, imagine you bought into a crypto-asset at $500, and now the market price is currently at $600. You want to secure this potential profit and keep accumulating more while minimizing your risk, so you decide to secure part of your profit and set a trailing stop at ‘-$20’ below the current market price.
As the price increases, moving in the direction of your order, the trailing stop increases and keeps its distance of ‘-$20’ below the current price.
Now imagine that at $700, the price changes direction and starts to fall. If the price falls to your set limit of $680, a sell order will then be executed. In this scenario, you will have now exited the market at +$180 on your initial buy order.
This is how the Trailing Stop order allows you to potentially hold on to some of your accumulated profit if the market turns against you.
A Take Profit Order is a type of limit order that specifies the exact price you want to close an open position for profit.
Take Profit is used to lock in profits at designated intervals, and to protect you against sudden and drastic dips in price.
You can add as many targets as you wish and each target has two parameters: ‘% (target)’, which is the percentage over your average buying price at what you will sell; and quantity, which can be expressed in percentage (from your position size) or in absolute value.
Take-profit orders are placed on the exchange as soon as the initial buy order has been filled to help try to ensure that it will be sold even if it's a small quick pump in price.
Dollar-Cost Averaging (DCA) involves buying a fixed amount of a particular asset on a regular schedule, no matter the share price. This approach is designed to encourage you to purchase more when prices are low and less when prices are high.
In other words, these are your goals for enlarging your position size if the price falls. You can add as many targets as you wish, but you have to be sure that your balance will support it.
Each target has two parameters: Target, in percentage, which is the percentage above the average buying price at which you will buy again, and Quantity, also in percentage, which is the percentage from your current position size that you will add with this new buy.
For further reference: See the official Zignaly Configuration and Settings Guide and scroll down to ‘DCA/Rebuys Targets’ for more on this option and an example of how it works.
Use this setting to limit the amount of concurrent opened positions that you want to have at any given time.
Select your desired amount, and Zignaly will limit the number of positions you can have open simultaneously.
Your Minimum Volume setting is used to designate the lowest market volume (in BTC) at which you will open positions.
The volume is specified over the last 24 hours. If the daily volume is below your designated value, you will not open positions in that market.
Use this setting to limit the number of positions per Market/Pair from Signals.
Whenever a new signal arrives, it will check if there are already open positions for that Pair, and only open if the total number is below this limit.
In other words, this is the maximum amount of concurrent positions per market. If, for example, you select two, you can then only have two parallel opened positions for any given market (e.g. BTC/USDT can only have two open positions at the same time).
You can choose to Blacklist specific coins when you do not want to act on those coins’ signals.
Use this setting to limit positions executed in cryptocurrencies that you do not want to own. This means that if you do not want to trade a certain coin, you can set Zignaly so that even if you get a buy signal, it will not buy.
Insert a comma to separate different coin ticker symbols that you do not want to follow.
Finding the settings that will work best for you is going to be more of an art than a science. Your preferred settings will vary based on your level of investment, your risk-tolerance, your available capital, total net worth, and more.
With crypto such a high-risk asset class, it is still recommended that you exercise caution with your investments, never risk more than you can afford to lose, and design an asset allocation strategy around your own individual goals and expectations.
That being said, the team at ITF has been experimenting on Zignaly to find a general starting point to recommend to our users. While we cannot make suggestions for each individual trader, we can share with you settings that some of our traders have been using.
Below you can see an image of all of these settings, followed by our explanation for why we have chosen each setting and their variables:
Important: These are for illustrative purposes only and do not represent a recommendation by the ITF Team.
Here we have chosen a lower position size of 0.0015 BTC. This setting should change from person to person, however, and should be based on a small percentage of your total capital for a single position.
You may want to choose from 1% to 2.5% of capital for a single position, depending on your level of risk-tolerance and how much capital you feel comfortable to risk on each position.
Currently our Buy Price Deviation is set at ‘0.5%’, meaning that if the price increases by this amount from the time a buying order is placed, the order will be canceled.
With Buy Order Expiration of ‘5 minutes’, any buying orders we place will be canceled if not filled in the allotted time.
We have currently chosen ‘-1%’ for Stop-Loss. We believe it is better to start small, especially as new users. We know that even the best traders make unprofitable trades, and with no crystal ball to see into the future we want to limit our potential losses while we get comfortable using the platform with our signals.
Our current Trailing Stop is set to ‘Trigger: 1%’, and ‘Distance: -0.5%’. We are currently still experimenting, but we are excited about this feature because you really can’t find it on many platforms, and it is a great tool for risk-management and optimizing profits.
To give you an example of how our current setting for Trailing Stop operates, let’s look at the following scenario:
Say we have an open long position. With ‘Trigger: 1%’, our Trailing Stop will only be activated when we reach 1% above the current market price. With ‘Distance: -0.5%’, our Stop order will be set at 0.5% below this new price (the price that activated our trigger).
Our Trailing Stop will then increase as the price increases, and it will only prompt us to sell if the price falls and reaches our set Trailing Stop Limit, the ‘Distance: -0.5%. A sell order will be executed at this point if automatically trading, or signals will prompt you to sell if trading manually.
With our Take-Profit set at ‘2%’, we have designated this interval to exit the position and lock in some of our profits.
You can set the ‘Quantity’ in percentage (from your total position size), or in absolute value.
The key here is to decide at what intervals you want to lock in your profits, and determine how much profit you will lock in at these times. By doing so, you will not only begin defining your own trading strategy but you will also be able to better manage your downside risk and protect yourself against sudden and drastic dips in price.
For now, we’ve chosen to enable 7 Maximum Concurrent Positions. This is the amount of open positions we can have at any one given time.
Here we have decided on limiting our trades to cryptocurrencies that have at least 85 BTC total daily trading volume.
By doing this, we ensure that our trades will be executed easily and quickly, and we limit positions taken in cryptocurrencies with lower levels of liquidity. The key here is being able to buy and sell assets without any delay.
By setting ‘Limit Positions Per Market: 1’, we have decided that whenever a new signal arrives for a Market/Pair, Zignaly will first check to see if we have any positions open for that Pair, and only open if we do not have any orders opened.
At the moment, we have chosen not to enable ‘DCA/ReBuys Targets’. As new users on the platform ourselves, we feel we still need more time to experiment before suggesting any settings for DCA Rebuys.
The signals (the “Signals”) provided by IT Alpha d/b/a Intelligent Trading Foundation (“ITF”) are provided for informational purposes only. The Signals do not constitute investment advice, financial advice, or trading advice. ITF does not recommend that any specific cryptocurrency should be bought, sold, or held. Digital assets exist in a volatile and high-risk market and Signals, and their methodology, change frequently without notice. ITF does not guarantee that any information users receive will be up to date nor does it represent or warrant that it is accurate for any purpose. Further, ITF takes no liability for any decision(s) made or action(s) taken by any user based on the Signals. Any and all use of any of ITF Signals is at user’s own risk. The Signals are not meant to replace independent financial advice, and ITF strongly recommends any potential purchaser of digital assets, even if such user is experienced and affluent, seek independent financial advice in the context of their own unique circumstances. The Signals should never replace or supersede professional financial advice. The Signals should be used in combination with, not in place of, each user’s own risk analysis and strategies and decision-making processes. By utilizing the Signals, the user agrees to indemnify and hold harmless ITF and all of ITF’s employees, agents, and affiliates for any and all damage, including direct, indirect, consequential damages, and any and all other losses or injuries resulting from the use of the Signals, to the fullest extent permitted by law. Furthermore, by using the Signals, user agrees to waive its right to pursue any legal and equitable remedies against ITF arising out of or in connection with the use of the Signals to the fullest extent permitted by law.