Learn how to develop a strategic crypto trading process with technical analysis indicators and profit by executing the set action when your rule is present on the market. If you stick to it, you will Make Money with Gunbot on your Crypto Trading journey.
This article was published first on: CryptoDROI.com
Table of Contents
- Introducing the Gunbot SMA Cross Trading Strategy
- Gunbot SMA Cross Trading Strategy Settings
- Gunbot SMA Cross Trading Strategy Buy Settings
- Gunbot SMA Cross Trading Strategy Sell Settings
- Gunbot SMA Cross Trading Strategy Balance Settings
- Gunbot SMA Cross Trading Strategy Indicator Settings
- Gunbot SMA Cross Trading Strategy Money Management
Introducing the Gunbot SMA Cross Trading Strategy
The moving averages are one of the most frequently used technical indicators in any technical analysis. They have become an essential part of countless trading strategies due to their simplicity, ease of use, and application.
The moving average’s ability to be easily measured, tested, and applied makes them an ideal basis for many automated crypto trading strategies.
Note: A moving average is a “trend following” or lagging indicator based on past prices.
You should be aware of the overall trend by using long-term timeframes (AKA Zoom Out). If the market is trending in either direction, then you should be aware of any possible retracements in the opposite direction.
Remember. You see on the chart not the actual coins but the traders’ behavior in cycles that change and/or repeat over time.
What Is the SMA (Simple Moving Average) Indicator?
The SMA “Simple Moving Average” indicator calculates the average of a selected range of closing prices by the number of periods in that range. The SMA will help you define if a coin price will continue or if the trend will reverse.
The classic SMA Cross Example of a Basic Setup:
The “Cross” indicates the two simple moving averages crossing over or under each other.
A golden cross is considered a bullish sign; the 50-day moving average rises above the 200-day moving average.
A death cross is considered a bearish signal; it occurs when the 50-day moving average drops below the 200-day moving average.
A short-term moving average is considered “Fast” because it calculates prices over a short period of time and is thus more reactive to daily price changes.
A long-term moving average is deemed “Slow” as it encapsulates prices over a more extended period and is more sluggish. It will smooth out price noises, which you often see in the short-term moving averages.
THE GUNBOT SMA CROSS STRATEGY WILL BUY WHEN THE PRICES START MOVING UP, INDICATED BY FAST SMA CROSSING OVER SLOW SMA AND SELLING WHEN FAST SMA CROSSES DOWN SLOW SMA.
Note: This strategy will buy and sell every time the conditions are real, so make sure you add the proper protection like (Double Check Gain) or another confirming indicator like RSI to make sure it won’t place sell orders below your break-even point.
The simple moving average crossover strategy is a simple but effective trading method used by beginners and experienced traders to capitalize on prices’ daily swing.
Even if you’re a manual trader, you can benefit from its simplicity. Still, if you put it to work on automatic, your results will grow exponentially, so if you don’t have it already, grab your Gunbot License Now.
Gunbot SMA Cross Trading Strategy Settings
This strategy is included in Gunbot, head over the “strategies” tab in the GUI, and take it from there; otherwise, you can create a new one, name it as you like, and use SMACROSS as buy and sell method, as you see in the image below.
After that, hit the create button and click on your newly created strategy to edit the main settings.
If you’re trading manually, your entry point will be when the fast SMA (lower number) crosses over the slow SMA (higher number)
In this example, the default settings on Gunbot are 15 minutes period, Slow EMA 16, and Fast EMA 8, notice in the GUI wording Medium EMA refers to the slow EMA.
Tip: If you’re trading manually, you can wait until the current candle closes if you need more certainty before entering into the trade.
Gunbot SMA Cross Trading Strategy Buy Settings
The “buy settings” in any Gunbot strategy are the primary trigger for buy orders. These parameters control the execution of buy orders, and in this case, when using SMACROSS as a buy method.
“BUY_ENABLED“: true, in your config.js file or toggle the switch to on in the GUI as you see in the picture below
Gunbot SMA Cross Trading Strategy Sell Settings
The “sell settings” in any Gunbot strategy are the primary trigger for sell orders.
These parameters control the execution of sell orders, and in this case, when using SMACROSS as the selling method.
“SELL_ENABLED“: true, in your config.js file or toggle the switch to on in the GUI as you see in the picture below
Tip: Flip the switch on for the Double Check Gain parameter in your Gunbot GUI, or set “DOUBLE_CHECK_GAIN”: true in your config.js file.
Gunbot SMA Cross Trading Strategy Balance Settings
Set your Trading Limit respecting your chosen exchange trading rules, based on your trading style and total capital; remember, this is the amount you’re willing to risk on each trade, not your total balance.
Your Minimum Volume to Buy/to Sell, this setting will prevent orders from being made below the exchange minimum trading size; check your exchange and add the values accordingly.
Funds Reserve: Here, you can set the amount of your total balance (in Base currency) that you would want to keep.
Please note, If you trade USDT-BTC pairs, your “funds reserve” will be in USDT, not BTC. Bitcoin is Quote when you sell or buy it against USDT; if you want to keep Bitcoin in this case, use the following setting.
Keep Quote: This is the amount of “Quote Currency” that you want to keep.
Gunbot SMA Cross Trading Strategy Indicator Settings
Here you will find the basic strategy parameters and many other indicators to use as confirmation. But bear in mind that every new indicator added will tell Gunbot to act (buy or sell) until all parameters are met.
So, for simplicity, I would suggest you use the basic strategy parameters.
You can use the default settings as you see in the picture below to get going and experience how the strategy performs out of the box, then you can fine-tune those values to your liking.
Gunbot SMA Cross Trading Strategy Money Management
I’ve chosen to explain how the Moving Average Crossover Strategy works for its simplicity, but remember always to obey the basic rules of capital control.
Never forget that not all indicator signals will give you a positive result all the time. I strongly advise you to invest only a small part of your total capital for each transaction to reduce risks.
That percentage should not exceed 5% of your total.
Here are 4 Money Management Principles I want to share with you:
- Always be prepared to be wrong.
- Always have a plan before entering a trade.
- Always choose discipline over conviction.
- Always sell when you can and not when you have to.
I firmly believe, if you apply those rules in your daily trading, no matter if you trade manually or with Gunbot, you will be successful!
Finally, I would like to remind you; this is not trading advice but the basic settings you need to use to benefit from the Gunbot SMA Cross Trading Strategy built-in in the bot.
Enjoy it!
