Managing Bags

When trading crypto markets, encountering assets that have lost value after a purchase, is normal and is commonly referred to as 'bags', is an inevitable part of the process. These unprofitable assets can impede further trading activities, necessitating effective management strategies.

Strategies to Tackle Bags

Embrace the StepGrid-like strategies.

The StepGrid strategy family stands out for its ability to trade effectively even when the market price dips below the break-even point of a trade. It achieves this by generating profits at lower rates, thereby gradually reducing the overall break-even price.

Patience: A Virtue in Trading

While not immediately gratifying, patiently waiting for the market to recover can be a sensible approach. This method banks on the market returning to a profitable level, which is a common occurrence, though not guaranteed. Ensure you maintain sufficient base currency balance to continue trading other pairs as you await the recovery of your bags.

Reversal Trading: Turning the Tables

Reversal trading is an innovative approach where Gunbot plays a pivotal role in accumulating quote currency as the market prices fall. It involves selling your assets at a decreased value and subsequently repurchasing more units when the price drops even further. This method allows you to dispose of the bags at a lower rate than the initial purchase price, yet still at a profit. This method is rather complex, not recommended for beginning Gunbot users.

Implementing Stop Limits

Setting a STOP_LIMIT is a preventative measure to avoid bag accumulation. This feature in Gunbot enables automatic selling of a pair after it depreciates by a specified percentage, effectively minimizing potential losses. Do check if your strategy supports this stop option, strategy settings can vary.

Averaging Down: The Balancing Act

Averaging down involves purchasing more assets at a price lower than the original buying price, thereby reducing the average cost of your holdings. This tactic allows for the disposal of bags at a price lower than the first purchase price, ideally leading to profit. While this can be done manually, Gunbot's DOUBLE_UP feature automates the process. However, it's advisable to use this feature carefully and not for multiple pairs simultaneously. Control the extent of funds used for averaging down with the DOUBLE_UP_CAP setting.