Hello all!
I’m a beginner trader and I’m trying out the Leonardo demo application.
I’m having trouble understanding the mArgin bot settings and how to apply them to a strategy.
Can anyone point me to a source where I could read up on these things?
I feel a bit hesitant on spending real money if I’m not sure what I’m doing
Best regards Johnny
Hi Johnny,
Thanks for checking out leonArdo.
The main difference between the static ping pong and mArgin maker bots is that the ping pong bot is static and the mArgin maker in dynamic. What that means is that with the ping pong bot you explicitly set a buy and sell price and that is all the bot does. If the course bounces between those pre-determined prices the bot will cycle through buy and sell orders. In contrast to this you don't set a buy and sell price for the mArgin maker bot, but rather you set a relative margin which adapts based on the history window - which continually adapts to what has happened. This means that it allows for prices to be dynamically chosen. There are other parameters you can set to ensure the bot behaves like you want it to such as: don’t sell below a certain price or ensure a min gain has been achieved.
The minimum effective gain allows you set the amount you want to make on each trade cycle. This is the amount after exchange fees have been subtracted. Setting a negative value allows the bot to make a loss in the hope that it can continue trading and make a gain. Otherwise, the bot would stop until the course came back to it.
There are no perfect parameters so just try a few out. Try to choose pairs that are not in a pump or dump. leonArdo works best when horizontally trading.
Best wishes,
Jonathan
Thank you Jonathan for the explanation.
So if I’m understanding this correct a smaller margin would hypothetically make orders more often in a relatively horizontal market, whereas a larger margin would make trades more seldom but with higher profit? I have noticed the bot stops working from time to time but according to our explanation this is then by design when the price drops below the trading window?
So if the trading window is where the application will try to do the buy and sell orders (correct?), what effect does the Buy and Sell margin % slider have?
Sorry about the stupid questions but I’m still a bit confused.
Best regards Johnny