Managing Unprofitable Crypto Assets (Bags) in Gunbot

In crypto trading, holdings that have lost value after a purchase are commonly called "bags." These unprofitable assets can impede further trading activities, so they require management strategies.

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A 'bag' in crypto trading refers to a holding of a cryptocurrency that has significantly decreased in value since its purchase, often leaving the trader in a loss position.

Strategies to Tackle Bags

Embrace the StepGrid-Like Strategies

The StepGrid strategy family can trade even when the market price dips below the break-even point of a trade. It does this by generating profits at lower rates, gradually reducing the overall break-even price.

Patience: A Virtue in Trading

Patiently waiting for the market to recover can be a sensible approach. This method relies on the market returning to a profitable level, which is common but not guaranteed. Maintain sufficient base currency balance to continue trading other pairs while you wait for bag recovery.

Reversal Trading: Turning the Tables

Reversal trading is an approach where Gunbot helps accumulate quote currency as market prices fall. It involves selling assets at a decreased value and repurchasing more units when the price drops further. This can allow you to dispose of bags at a lower rate than the initial purchase price while still at a profit. This method is complex and not recommended for beginning Gunbot users.

Implementing Stop Limits

Setting a STOP_LIMIT is a preventative measure to avoid bag accumulation. This Gunbot feature enables automatic selling of a pair after it depreciates by a specified percentage, minimizing potential losses. Check whether your strategy supports this stop option, as strategy settings can vary.

Averaging Down: The Balancing Act

Averaging down involves purchasing more assets at a price lower than the original buying price, reducing the average cost of your holdings. This tactic allows for the disposal of bags at a price lower than the first purchase price, ideally leading to profit. While this can be done manually, Gunbot's DOUBLE_UP feature automates the process. Use this feature carefully and avoid applying it to multiple pairs simultaneously. Control the extent of funds used for averaging down with the DOUBLE_UP_CAP setting.