Gunbot Strategies Overview ADX Strategy Settings
Gunbot Strategies 101. Who Else Wants to Profit with the Gunbot ADX Crypto Trading Strategy? This is a great strategy for beginners.
Gunbot is the world’s leading crypto-trading automation software. It will save you hours of research and manual work per week if you want to start trading cryptocurrency.
All Gunbot traders strive to build their own profitable strategies, either on their own, asking on the Gunthy Telegram rooms, or even downloading one ready-made strategy in the Gunthy Marketplace, all with the same goal of finding a reliable crypto trading plan.
This guide will give you a high-level overview of what you need to know about using the ADX indicator and how to set a trading strategy up on Gunbot.
So my goal with this article is to explain how to set up a profitable Gunbot strategy using the ADX indicator (Average Directional Index). You will also learn a set of rules you can set and follow if you don’t have the bot yet and want to trade manually.
Identifying a strong directional movement is the most important thing for a trader. Regardless of what type of trader you are, you want to trade in the direction of the trend.
The ADX indicator is a way for traders to determine the strength of trends. These values help you identify the best market conditions to enter and exit trades. ADX values are also important to distinguish between trending and non-trending periods.
AFTER YOU ENTER A POSITION, YOU NEED A STRONG MOVE IN YOUR TRADE DIRECTION TO MAKE A PROFIT.
ADX is the Trend Strength Indicator that identifies when the price is trending strongly by measuring the trend strength.
It is worth noting that the indicator is non-directional and will measure the trend’s strength by rising in both uptrend and downtrend directions.
Read specifics and Learn more about the Average Directional Index Indicator.
Gunbot Strategies ADX Indicator Overview
The Average Directional Index, the directional movement index (DMI), Positive (+DI), and Negative (-DI) are part of a trading system that you can use to measure the strength of a particular trend. They were developed by Welles Wilder, who found them to be incredibly accurate.
The Directional Movement System is a useful way to describe how the price of an asset moves. Positive and negative directional movements are formed by comparing two consecutive lows as well as two consecutive highs. This can help us determine the momentum of the price.
What are the Positive and Negative Directional Movement Indicators?
The +DI and -DI are parts of the ADX that we use to assess the existence of a downtrend or an uptrend. When the +DI is rising, it gives us a signal that the uptrend is strengthening. When the -DI is rising, it gives us a signal that the downtrend is strengthening.
- If the Positive Directional Indicator (+DI) moves above the Negative Directional Indicator (-DI), it signals a strong uptrend.
- If the Negative Directional Indicator (-DI) moves above the Positive Directional Indicator (+DI), it signals a strong downtrend.
- If the +DI is moving down below the -DI, then the price drop is strengthening.
- If the -DI is moving down below the +DI, then the price pump is strengthening.
The crossovers between the +DI and -DI are used as trading signals because the crossover indicates the possibility of a new trend developing.
As a rule of thumb, let me tell you that when the ADX indicator is reading below 25, you can consider this a non-trading period or range market on which you shouldn’t enter the trade unless you know what you’re doing.
On the other hand, a reading above 25 is enough to signal a strong bullish or bearish trend, indicating it is time to get in or out, depending on your position.
You can find this setting in Gunbot as “ADX_LEVEL,” and the default value is, of course, 25, so you can leave that setting with its default value.
The ADX indicator uses a smoothing moving average in its calculation. You can find out that the best ADX indicator setting to use is 14 periods, which is also set as a default in your Gunbot Strategies section. The name in your config.js file is “DI_PERIOD.”
You can argue that you can combine this with other confirming indicators, and yes, it could give you more signal validation, especially the RSI.
For example, you can use it to gather your entry signals while the ADX already told you the intensity.
In this article, especially when you trade with any Gunbot strategy, I recommend keeping it simple because the more indicators you add, the more checkpoints the bot will have to go through.
Remember: Gunbot execute your strategies following the “AND” rule, not “IF,” “THEN.” That’s why every strategy condition for a trade to take place must be true simultaneously.
Okay, allow me to explain the ADX strategy rules to you to understand better how to apply them when you’re trading with Gunbot or manually if you choose to.
These Average Directional Index trading rules will ensure that you only trade when there is a strong trend regardless of the time frame you choose.
Gunbot Strategies ADX Strategy Rules
Rule #1: The ADX Indicator must read above 25; this will confirm a trend development.
Rule #2: Check the Direction of the Trend; for this, you can add the 20 or 50 Moving Average indicators, and if you’re in a lower time frame, feel free to zoom out to the daily to make sure you get a bigger picture of the overall market trend for the particular pair of your choice.
Rule #3: Use the RSI indicator to enter or exit the trade; as a rule of thumb, when RSI is under 30 shows an oversold market and a reversal zone, while RSI over 70 will indicate overbought.
Please note that these values are not set in stone, and smart trading means looking beyond what the textbook says, but overall at least you got an edge to enter or exit and some values to go from.
Rule #4: Protect your money with Stop Loss, or if you’re a Gunbot user, you can choose the Dollar Cost Average (DCA) feature, but in any case, you should make your decision before you enter the trade, and in the Gunbot case you can preset this also in your strategies page on the GUI or in the JSON file.
If you’re trading manually, you should profit when the ADX indicator goes back under the 25 mark since that would indicate you the trend is running weak.
Gunbot Strategies ADX Strategy Creation
When you create this strategy, you’re telling Gunbot to “BUY” when the price is moving up (uptrend) and “SELL” when the price is moving down (downtrend).
To start, click on the “Strategies” link on your Gunbot GUI, so you can Name and choose ADX as your buy and sell methods, then hit the “Create” button.
Simple right? Now, let’s dive into your new strategy settings.
Gunbot ADX Strategy Buy Settings
The trading bot buy settings are the parameters that activate your entry orders when using the ADX as your buy method. You can adjust the values based on your trading preferences thru the GUI or by editing your config.js file.
“BUY_ENABLED“: true or false to deactivate it.
“TAKE_BUY“: true or false (your choice to set a buy trailing percentage)
“NBA“: Never Buy Abobe ( I recommend leaving it as it is)
Gunbot ADX Strategy Sell Settings
The trading bot sell settings are the parameters that activate your exit orders when using the ADX as your sell method. You can adjust the values based on your trading preferences thru the GUI or by editing your config.js file.
“SELL_ENABLED“: true or false to deactivate it.
“SELL METHOD“: ADX
“GAIN“: 0.5 this is the strategy default gain level, meaning Gunbot will sell when you’re at 0.5% profit from your last BUY, including fees.
“TAKE_PROFIT“: true or false (your choice to set a sell trail percentage)
“DOUBLE_CHECK_GAIN“: true, highly recommended activating this feature.
Gunbot ADX Strategy Indicator Settings
These are the most important indicator settings for your ADX strategy.
“PERIOD“: 15 minutes is the default time frame. Adjust this to your chosen time. Make sure the exchange supports it.
“ADX_LEVEL“: 25, this is the default ADX level, so Gunbot will execute your trades as soon as the ADX signal is at 25 or higher.
“DI_PERIOD“: 14, this is the default number of candles to calculate the Directional Indicator (leave it at that)
These are the basic settings for your Gunbot ADX strategy. Make sure to check this strategy setup guide if you need help setting other parameters.
Gunbot Strategies Conclusion
Understanding how to use an indicator and a strategy properly will help you maximize your success, either when you’re doing it manually or with the help of an automated trading system.
Being able to identify trends is one of the most important things for a trader. Regardless of what type of trader you are, if you’re not trading in the direction of the trend, you’re simply going against the market, which means increasing your chances of loss.
Whether you’re day trading, scalping, or just buying and holding, you want to trade in the direction of the trend. The bottom line is that in my experience, the best profits come from catching strong trends, and the ADX strategy can help you with that!
But this is just one simple strategy, by no means better than any other one you may see, just a set of rules to follow that can help you accomplish your trading goals.
I really hope this article helps you understand a bit more about crypto trading and Gunbot automated strategies so you can win some trades.
As a Disclaimer, I must add “This Is Not Trading Advice” this strategy is meant for educational purposes. Use it at your discretion. It is just my personal experience, one of the most basic trading ideas and Gunbot Strategies.
Gunbot is a potent tool that you can use to trade on many different exchanges on automatic. But what if you don’t have Gunbot yet?
You Want to Get Gunbot from CryptoDROI Now, right!:)
Trading with Gunbot is a lot of fun, and if you take the time to learn its settings, you will be able to generate higher profit margins and reduce the risk of your trades.