Trading basicsMartingaleTrading bot
Crash Course on Spot Martingale
Beginner
2024-07-05 | 5m
What is Spot Martingale?
Many of you must have heard of the Martingale strategy, which originated from betting. For example, a gambler implementing the Martingale strategy in a game of Hi-Lo would double their bet after every loss until they start winning. Bitget Spot Martingale derives from the core idea of the traditional Martingale strategy. The
trading bot buys the dip in batches, then sells all positions at a higher price, while significantly reducing the average price by increasing the size of the buy order with each dip.
Bitget's Spot Martingale executes a buy order every time the price drops by a certain percentage. The buy order size increases in geometric mode (for example, 1, 2, 4, 8, 16...) If the bot is set to buy when the price drops by 1%, batch purchases are made when the price drops to 99%, 98%, 97%, 96%, 95% ... of the entry price. After the price has dropped by 5%, the average price of the position is 95.97% of the entry price. Then, a moderate price increase of 1.02% would be enough to cover costs, significantly reducing the risk. In a normal grid strategy, when the price drops by 5%, it needs to rise to about 99% of the initial price to break even, which means increasing by 4.2%.
The underlying logic of Spot Martingale's profitability is straightforward. Select a high-quality asset and as long as its value does not plunge to zero, you can profit.
Spot Martingale examples
The Martingale strategy buys when the price goes down to reduce the average cost of investment.
It is suited for users who have a positive long-term outlook on a coin but difficulty in determining the entry timing who do not wish to miss out on the opportunity, or simply for users who want to withstand floating losses. For example, if you
buy a coin at 50 USDT with the belief that the price will reach 100 USDT after some possible drops, then you can set the bot to buy more whenever the price drops by 10 USDT. When the price hits 100 USDT, you will hold more assets at a lower average price.
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Normal Spot Martingale: Best for users who are bullish on the market but expect the price to drop before rising. After placing the base order, more safety orders can be placed at the pre-set intervals and multipliers.
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Spot Reverse Martingale: Best for coin holders who are bearish on the market but worried that the market may rebound first. They can sell part of their holdings and continue to sell if the price increases to maximize their profit.
Advantages of Spot Martingale
Buy the dip with precise timing
Martingale bots allow you to buy at a lower price during short-term downtrends in the market. The more orders are made, the lower the average cost, and the greater the profits on a market rebound.
Customize parameters to control your risk
Traders can adjust the parameters of the Martingale bot according to their own trading habits and risk appetite, including single take-profit target and safety order multipliers, so that the risk is controlled.
Using bots lowers the entry threshold for traders who are not as experienced. In the AI mode, there are three types of trading styles for users to choose from: Aggressive, Balanced, and Conservative. Users can select the style that aligns with their needs.
Seizing oversold opportunities and trigger signals
Bitget's Martingale bot is the first of its kind that really suits crypto traders' needs. Thanks to its strong technical indicator research and development capability, Bitget offers exclusive features such as conditional entry and alert triggers to allow users to effectively seize market rebound opportunities and achieve greater profits. In the future, Bitget will release more diverse strategy trigger signals to satisfy investors' needs.
Spot Martingale vs Spot grid trading
The main difference is that a Spot Martingale buys in batches and sells all at once while a spot grid bot buys in batches and sells in batches. Martingale bots increase the order size when the market goes downwards, starting from small order sizes.
Spot grid bots typically open larger positions based on the investor's parameters, using around half of the initial investment. Spot grid bots earn more profit than Martingale bots when the price increases, but also suffer larger drawdowns when the price decreases. Martingale bots have a better capital utilization rate than spot grid bots, and will generate more profit in volatile
markets.
In summary, the pros and cons of Spot Martingale and spot grid bots are as follows:
| Trend return | Spot martingale < spot grid |
| Shock arbitrage income | Spot martingale > spot grid |
| Risk | Spot martingale < spot grid |
The Spot Martingale bot helps investors buy the dip in batches at the pre-set percentages, minimizing the risk. With this high level of safety, as long as the selected assets are of high quality, the asset price will rebound and gain profit even if there is a drawdown in the short term.
Disclaimer
Spot Martingale is a trading tool. The abovementioned information should not be considered financial or investment advice from Bitget. Profits from Spot Martingale bots may be impacted by one-sided market conditions or improper price intervals. You can adjust your Spot Martingale bots according to market conditions.
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