The Overbit Long Trend Bot is another innovative style of grid trading designed for markets that are trending upwards. If you have studied a market and believe that it has the potential to rise, using a long trend bot is a good way to enter that market as it is almost impossible to know if and when that market will rise. The long trend bot is also a good hedge to use against a potential short position.
Check out the Short Trend Bot which works in the opposite way to the long trend bot.
The bot is split into two types of grids, DCA (dollar cost averaging) grid, and a take profit grid. When the bot starts, 50% of the initial investment is used to enter into a buy position at the current market price. After that trade is executed, a series of buy and sell limit orders are placed below and above the current position.
The number of sell orders initially placed represent the amount needed to exit the entire open position. Therefore, if the current open position is 1 BTC, and there are 5 sell grid levels, then their amounts would be 0.2 BTC each at increasing price levels. If all 5 sell orders are executed, the position would be entirely closed at a profit.
Market trends upwards
As the market starts to trend upwards, the sell positions will be executed and the bot’s open position will be gradually reduced. Therefore it will make a profit each time a sell line is executed.
Market trends downwards
If the market trends down, then the DCA grid will accumulate more of the position as buy orders are executed. As more buy orders are executed, new sell lines are placed at the top of the grid. You will notice that the lowest sell line is always at least 1 grid step % away from the average entry price. This means that if the market continued to trend down for quite some time and more DCA buy orders are executed, then the sell orders of the grid will all be shifted downwards, allowing the bot to exit its position at a lower price than initially intended, but still in profit.
Market moves sideways
The market might initially trend up or down and continue sideways. In this case, the selling grid lines will move down closer to the current price but always remain within 1 grid step % of the average entry price.
Once the bot has exited its current position, it will restart by opening a new market order for 50% of the original investment amount defined. It will then place new buy and sell limit orders. At that point the market will have shifted, therefore the levels will be at different price points.