Trader builds Bitcoin ‘buy the dip’ bot, outperforms DCA

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Although there is a bullish background in February, do not think that traders are trying to guess the market. An experienced trader named u / Samjhill on Reddit has created a trading tool that exceeds the average dollar value (DCA) for buying bitcoin (BTC).

DCA is a strategy where investors regularly buy small amounts regardless of price fluctuations. This works in contrast to traders who aim to get the lowest entry level by accurately timing the fall and avoiding “catching the falling knife”.

The apt name Buy the Dip Bot aims to “get the best price for a given asset using a limited strategy.” Inspired by another Redditor who proposed a strategy for manually limiting purchase orders to get the best entry price, u / Samjhill took the idea one step further by coding a low-purchase fine.

The robot places certain orders at several intervals below the current price, and if the order is executed or canceled, it restarts. Taking advantage of Amazon Web Services, Python, Lambda, DynamoDB and React.JS technologies and hosting on GitHub, the cost is low, “around $ 5 / month”.

Although the robot has not been seen since December, it reached its first milestone on Monday. In terms of profitability compared to the regular average dollar value, “the price advantage per coin (cheaper) is 5% -10% right now, as you can also consider getting more coins for your money,” as Sam told the Cointelegraph.

The bot runs a test library to find the best entry points for specific purchases. A complex process, the work pays off, culminating in a “win-win strategy”.

Related: TokenBot helps crypto traders build social communities and invest in market knowledge

When asked by Cointelegraph if he would recommend a fine over regular DCA, Sam replied that it depends on where you are on your BTC journey:

“For people who are just starting out, a regular DCA will probably make more sense because your goal is probably to collect as many coins as possible. For those later in the journey, they may already have a decent stack and want to reduce the base cost increase that way. that they can get more out of it. ”
Sam, who first learned about Bitcoin in 2013, added that he uses both DCA and a borderline strategy “to get a more balanced coin growth curve.”

While orange bitcoin is currently the future of the trading bot, Sam has built a system for easy integration with other coins. Ether (ETH) is featured on the GitHub page, and Sam suggests that he might put other coins into production.

Source: CoinTelegraph

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