(Updated) What Happens When You Overextend Your 3commas DCA Bots?

This morning's hourly Bitcoin chart looks GREAT!

3commas DCA (Dollar Cost Averaging) Bots are automated trading bots that you can build in order to help you remove emotion from your cryptocurrency trading. You actually tell the bot how you want to trade as well as which currencies you want to trade, press the start button and watch her go! These bot will do exactly what you tell them to do. They will buy as the price drops at whatever interval you predetermine, and they will take profits for you at your predetermined amount. 

If you are just learning about DCA Bots let me briefly explain how they work so that you can understand how you can get overextended. 

Lets say that in your brokerage account you have $100 that you want to allow 3commas to trade with. You would set up your bot to have an initial "buy order" of lets say $10 for Bitcoin. After that if the price of Bitcoin drops your bot will buy at your predetermine places in the drop. Lets just say that you set up the bot to buy at each 2% drop of Bitcoin. At each buy-in (these are called Safety Orders) your bot is set to purchase $20 worth of Bitcoin each time. If the price drops far enough to fill all of your safety orders you have gotten overextended. 

This is not as frightening as it sounds as long as you have one of two things. The price will (most likely) come back up enough to trigger your take-profit order. This may take time, or it could happen right away. So the first thing that you may need is patience. Or....if the price continues to drop even farther below your last safety order and you have cash reserves in your account (which you should always have at least 25% that you never use except for emergencies) you can start adding either more safety orders to the deal on the deals page of 3commas. Doing so will add your predetermined amount in step with what you already established in the bot. You can also add any amount of money you wish outside of the bot parameters simply by clicking the "add funds" button of the deals page on the website. So, you'll need either time, or money. 

I have gotten only slightly overextended in the past, and it didn't last more than a day before the prices started going back up and my take-profit orders were triggered. But this time I want to do it big! Well, not crazy big, but big enough to where my safety orders don't get filled because I've run out of funds. I'm hoping that my safety orders all run about 3 deep and then stop filling because I'm out of resources for the bot.

So here is what I have done. I've put about $800 dollars in USDC. I then set up 8 bots to trade USDC coins nonstop. Each bot is set up with 15 safety orders. I have some set at $5 Buy Order and $10 Safety Order, and some at $10/$20. The market is currently moving up, so it may be awhile before I can see how this is going to work. 

My goal is to see how the bots handle being overextended. I want to see if they will work their way out of the situation. In other words, if they all get to the point where there are no funds left in the account to trade with will they use funds made available to them as other deals hit take-profit orders. Say, if bot A, B, and C are all over extended with 5 of 15 safety orders full and bot C's deal makes a turnaround and takes profit in-turn releasing all of it's funds, will bots A and B then pick up those funds to fill their safety orders in order to average down the buy price and close the deal in profit sooner. 

I hope that was simple enough to follow. I will be adding a follow-up to this post in the coming days and weeks, so stay tuned. 

Update #1  9/5/21

Update #2 9/5/21 10:58pm

So the first screenshots show other coins trading usdc that were affected. As you can see they too were stopped from making safety orders due to a lack of funds.

All three of these coins did hit their take-profit target, the funds were released, and if you look at the screenshot below CVC Bot took the opportunity with the funds now available in USDC and made safety order number 8. I will update with details as soon as it makes further changes.

Update #3 Slight Change Made 9/6/21 11:25

Two of my coins (CVC and DNT) have opened 8 safety orders and are unable to open anymore. In order to assist them I have temporarily stopped all of my USDC bots so that as other funds are free they can go into these two trades to help the bots work themselves out. The other bots are all down less than 2% at this time which is normal volatility for bots that open new deals as soon as old deals are closed. DNT has recovered from it's low back up to only being down 5%. CVC has also recovered a bit and is only down 6% at this time. 

Update #4 9/8/21 09:07

Just a quick update here, but my bots did manage to pull out of the little hangup only to get sucked into Bitcoins 15% market dip over the last 24hours. Most of my USDC is currently tied up in trades. I did add $500 in USDC just to give them more to work with. I will be letting them work this out on their own this time except for adding funds to the deals if the market drops more.

More updates to come.

As always, be a blessing to God and people! 

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