How to not panic during a dump and continue to make profits

First of all, it is natural that markets will dump from time to time. This is actually a great thing, as nobody will trade a market that only goes up (who would sell even one satoshi when prices only ever go up?). Use Gunbot to buy when the market dumps, pick up those bargains and be prepared to sell them for profit as soon as prices go up again.

With Gunbot you can use a large number of indicators that tell you that the market looks oversold and a reversal of price direction is likely to happen. Often, this is the moment where you want to buy. Let's look at a few of the options Gunbot offers to trigger trades exactly when prices are about to reverse course.

Stochastic RSI

StochRSI is an indicator used by many traders to identify when a market is oversold. It's values range between 0 and 1, the common reading is that the market is oversold when StochRSI is below 0.2.

In Gunbot you can use this indicator to buy exactly after StochRSI moved into oversold territory, and then crosses into neutral values again.

Note how the buy order waits for StochRSI, in the bottom chart, to climb up again outside of oversold territory.

Bollinger Bands

Bollinger Bands are great at visualizing relatively high and low prices, this makes it easy to spot when prices dumped below the normal range for a timeframe. When it starts rebounding, this is your chance to get a good entry after a dump.

With the BBTA buying strategy Gunbot can buy exactly at the point where prices start to enter the bands again.

Look at how beautifully the BBTA strategy manages to detect when a dump is completed.

EMA + trailing

This is a different approach to buying the dips, instead of using an indicator that shows the market is oversold it works with price movement only.

Say you only want to buy the deepest of dumps, you can setup gunbot to buy when prices are at least 1% below the exponential moving average (EMA) price of the last few hours AND it starts to move up again, with a trailing range of 0.5%.

Try getting a better manual buy after a dump

Did you buy close to the top, then a dump happened?

Even the most fancy indicators will fail sometimes, or you might have made a bad decision and bought at the top, it happens.
Now what can Gunbot do to deal with this?

1. Dollar Cost Averaging (DCA): you can setup Gunbot to automatically bring the average price per unit down, by buying more and more as prices dump.

The key to this is that you manage your budgets tightly and keep enough reserves to afford averaging down.

The principle of DCA is pretty easy:

Initial buy, 100 units for a price of 10 per unit
Huge dump, price dropped to 60
DCA buys another 100 units for 60 each
Average price per unit is now 80
Target of 81 to profitably sell not reached? Let's do another round of DCA and bring the price per unit down even more!

2. Reversal Trading (RT): this is a technique to automatically accumulate more of a coin when prices keep dropping - without investing a satoshi more than you initially put into it!

The basic principle is:

Initial buy
Dump happened, a stop loss order is placed
Dump continues, proceeds from the stop loss order are used to buy more units
This process can continue perpetually, ever accumulating more units until it is possible to profitably close the initial trade

There actually is a lot more to tell about Reversal Trading, it's one of the most advanced features Gunbot has. Head over to our wiki to dive into all details of Reversal Trading.

3. Place a stop limit order
Do you prefer a trading strategy where you factor in losing trades happening? Then use the stop limit feature to sell at a calculated loss.

~Gun