What is a Scalper bot?
Scalper bot refers to HFT (High-Frequency Trading) - a type of algorithmic trading with a high speed of trades execution. It is designed to benefit from any tiny price movement.
❗ The Scalper bot is currently offered to users of the Bitsgap platform only on the Kucoin exchange.
This trading bot moves along with the price using grid technology, which helps to respond to even the fastest market fluctuations due to pre-placed orders with a minimum distance from each other.
The picture above shows the final result of Scalper's work in a scenario when the price of the coin fell strongly down, and then returned to the previous level and continued to move up, after which the bot moved the levels higher. In this scenario, Scalper took extra profit when the market fell by buying the asset at the lowest price.
Advantages of Scalper bot
There are two main Scalper bot advantages:
The grid trails the price automatically in uptrend or downtrend
*Compensating losses in case if the price falls
*The more severe is the price fall, the more intense the loss compensation from the bot becomes.
Special Service Characteristics
There are a few special service characteristics that the Scalper bot has that is important to mention:
The grid step is fixed at 0.1% for all Scalper bots (trading fee is included)
Bitsgap reserves the right to save the last 10,000 transactions in the bot history. The full history of the transactions can be downloaded from your exchange account
How the grid is created
Scalper bot creates a grid of up to 140 levels, some of which form a narrow grid around the initial price, which allows you to make a profit even from a minor market movement. The remaining part of the levels is located below. This way it makes it possible to compensate losses in the event of price falls.
The illustration above shows the end result of Scalper's work in a situation when the price of the coin sank in a strong downtrend, and then returned to the previous position furthermore proceeded to move up, after which the bot followed the price movement and adjusted the grid. In this scenario, Scalper earned additional profit by buying the coin at the lowest price when the market declined.
How the bot makes profits
The bot works with base and quote currencies. At the start of the bot, the investment is evaluated in the quote currency, which is the main one for the bot, the profit is accumulated in that currency, and the "Change" column is calculated using it as well. If we take an example of the ETH/USD pair, the quote currency is USD (the quote currency is indicated in any pair as the second currency in a pair), the investment is also calculated in USD, the bot works to make a profit in USD.
Change is a comparison of the investment volume at the time of launch, calculated in the quote currency, compared to the current moment. For example, if after launching a bot with an investment of 1 000 USD, the base coin rate depreciates and the total assets of the bot are estimated at 1 050 USD, then the Change value becomes + 5%.
How does the bot compensate losses?
Scalper bot not only accumulates profit but also minimizes losses. Let’s take a look at a fictitious trading pair COIN/USD to demonstrate the loss minimization effect.
In our example, the COIN price is $100. We have 5 buy limit orders where each has a 200 USD investment, so the total investment for this bot is 1 000 USD. Now l the price of the COIN asset drops from 100 USD to 95 USD.
Calculation of losses without using the bot
The loss in value for a one-time purchase of COIN is:
950 - 1,000 / 1,000 x 100% = -5%
The break-even point:
1,000 / 10 = 100 USD
Calculation of losses using the bot
5 buy Limit orders were executed:
1. $200/$99 = 2.0202 COIN
2. $200/$98 = 2.0408 COIN
3. $200/$97 = 2.0618 COIN
4. $200/$96 = 2.0833 COIN
5. $200/$95 = 2.1052 COIN
As a result, the total amount of the base currency is now 10,3113 COINs. At the 95$ COIN price, the total value in a quote currency is estimated as 10,3113 * 95 = 979.57$
Loss of value (negative Change) as a result of Scalper:
979.57 - 1,000 / 1,000 x 100 = -2%
Now the break-even point is much lower:
1,000 / 10.3113 = 96.98 USD
By buying at a better price, Scalper reduced the loss of funds by 3% compared to the scenario when we just buy a currency and wait for it to rise in price.
How to start the bot
You can start the Scalper bot with just one click. All you need to do is to enter your total investment and hit the Start button. Our system will use the backtesting and your available balance to adjust the grid settings accordingly so you don’t have to worry about it.
1. Select the Scalper bot from the list of launching a new bot
2. Select the exchange, trading pair, indicate the investment, and click on the Preview button.
3. Confirm the settings, if you need to change something, you can click on the Cancel button. If the settings suit you, click the Confirm button.
❗ To launch the Scalper bot, it is enough to have only one of the coins of the selected pair on the exchange balance. The bot will acquire the required number of coins to start on its own, by selling the available currency at the currently available price.
Scalper bot is your investment safety tool, which secures your assets when the market crash happens, and generates profit when the market rises. This bot is fully automated and does not require any monitoring, which makes it perfect not only for beginners but for experienced traders as well.