So, what is 3commas?
3commas is a crypto trading bot software that allows traders to automate their trading strategy and make trades on multiple exchanges. It provides a user-friendly interface and a variety of features that allow traders to customize their trading strategy. These features include stop-loss and take-profit orders, trailing stop-loss, and multiple trading pairs. 3commas also offers a backtesting feature, which allows traders to test their strategies before executing them in the live market.
Is 3 commas an exchange?
If you’re wondering about “Is this an exchange”, well, no. 3commas is not an exchange. It is a crypto trading bot software that allows traders to automate their trading strategy and make trades on multiple exchanges. It connects to various exchanges through an API (Application Programming Interface) and uses the data from these exchanges to make trades based on the predefined rules set by the user. 3commas does not hold or store any user’s digital assets, it just facilitates the trading process by automating it. Traders still need to have an account with a cryptocurrency exchange in order to use 3commas.
How Does 3commas Work?
3commas works by connecting to a cryptocurrency exchange (like Binance) through an API (Application Programming Interface). Once connected, the bot can access market data, such as price, volume, and order book information. The bot then uses this data to make trades based on the predefined rules set by the user.
For example, a trader may set a rule that states that the bot should buy a certain cryptocurrency when the price drops below a certain level and sell it when the price reaches a certain level. The bot will then execute this trade automatically, without the trader having to manually place the order.
Why is 3commas Popular among bot trading software?
3commas is becoming increasingly popular among traders for several reasons. One of the main benefits of using 3commas is that it can execute trades 24/7, even when the trader is not actively monitoring the market. This allows traders to take advantage of market opportunities, even when they are not able to be at their computer.
Additionally, 3commas offers a portfolio management feature that allows traders to track their performance and make adjustments to their portfolio. This feature helps traders to better manage their investments and make more informed decisions.
Another reason for the popularity of 3commas is that it can be programmed to execute trades based on specific market conditions, such as news events or technical indicators. This allows traders to create a customized trading strategy that fits their needs.
Types of Bots available in 3 commas
- Simple Trading Bots: designed for beginners, they are easy to set up and use. Usually, they are based on pre-defined strategies, such as “buy low and sell high”, and can be used to automate trades on a designated exchange.
- Composite Bots: Composite bots are a kind of bot a little more advanced that allow traders to create custom strategies based on a combination of indicators and market conditions. Composite bots can also be used to automate trades on multiple exchanges, as the majority of bots.
- Short Bots: Short bots are designed for traders who want to take advantage of market downturns. They allow traders to short a coin by selling it first and buying it back at a lower price.
- Grid Bots: Grid bots are designed for traders who want to take advantage of volatility in the market. They allow traders to set multiple buy and sell orders at different price levels, which can be used to profit from price fluctuations.
- DCA Bots: DCA (Dollar Cost Averaging) bots are designed for traders who want to accumulate a certain coin or token over time. They allow traders to set a budget and automatically buy a certain amount of a coin at regular intervals, regardless of the price. DCA (Dollar Cost Averaging) is an investment strategy that involves buying a specific asset at regular intervals, regardless of its price. The goal of this strategy is to reduce the overall cost of the investment by averaging out the price over time. This helps to mitigate the risk of investing in an asset at a high price and then seeing the price drop, resulting in a loss.For example, if you invest a large sum of money in a cryptocurrency all at once, you run the risk of purchasing the asset at a high price, only to see the price drop shortly after. With DCA, you can divide your investment into smaller pieces and buy the asset at various points over time at different prices, thus getting a better average price for your position and greatly reducing risks from the consequences of volatility.
- Trailing Profit Bots: Trailing profit bots are designed for traders who want to maximize their profits while minimizing their risk. They allow traders to set a trailing stop-loss, which automatically adjusts the stop-loss level to lock in profits as the price increases.
- Short Grid Bots: Short grid bots are designed for traders who want to take advantage of market downturns and volatility at the same time. They allow traders to set multiple short and buy orders at different price levels, which can be used to profit from price fluctuations.
- Bitmex bots: These are specialized bots that are designed to trade on Bitmex exchange, they have the ability to use leverage and short selling.