Skip to main content

DMAC Bot (Dual Moving Average Crossover)

Use this bot to automatically trade based on moving average crossovers, a classic trend-following strategy that identifies potential ...

Updated over 2 weeks ago

Overview

The DMAC Trading bot implements a popular technical analysis strategy that uses two moving averages - a shorter (faster) and a longer (slower) period. When the faster moving average crosses above the slower one, it signals a potential uptrend and triggers a buy. The bot can exit positions either based on moving average crossovers or specified profit/loss targets.

Details

The strategy uses two Simple Moving Averages (SMA):

  • Short-term MA: More responsive to recent price changes

  • Long-term MA: Provides a longer-term trend perspective

Trading signals are generated when:

  • Buy Signal: Short-term MA crosses above Long-term MA

  • Sell Signal: Either:

  • Short-term MA crosses below Long-term MA (indicator-based exit)

  • Price reaches profit target or stop loss (target-based exit)

How to Configure the Bot

General Settings

  • Exchange Platform: Select your preferred exchange

  • Trading Account: Choose the account for bot operations

  • Market: Select the trading pair (e.g. BTC/USDT)

  • Starting Capital: Amount of quote currency to allocate

  • Entire amount is used for purchases

  • Profits are automatically reinvested

Strategy Settings

  • Candle Timeframe: Chart interval for analysis

  • Options: 1m, 5m, 15m, 30m, 1h, 4h, 1d

  • Lower timeframes = more frequent signals

  • Higher timeframes = stronger but fewer signals

  • Long Moving Average Period: Slower MA period

  • Default: 52 periods

  • Range: 2-200 periods

  • Higher values = smoother, slower signals

  • Short Moving Average Period: Faster MA period

  • Default: 28 periods

  • Range: 2-200 periods

  • Lower values = faster, more responsive signals

  • Exit Strategy: Choose between:

  • Profit Target or Stop Loss: Exit at specified profit/loss levels

  • Indicator Confirmation: Exit on MA crossover signals

  • Cooldown Period: Candles to wait after closing a position

  • Helps avoid immediate re-entry in choppy markets

  • Set to 0 for continuous trading

Profit & Risk Management

(Only visible when using "Profit Target or Stop Loss" exit strategy)

  • Profit Target: Percentage gain to trigger position close

  • Default: 2%

  • Can set values above 100% for longer-term trades

  • Stop Loss: Percentage loss to trigger position close

  • Default: 1%

  • Set to 100% to effectively disable stop loss

Frequently Asked Questions

How do Moving Average periods work together?

The relationship between the two periods is crucial:

  • Closer periods (e.g., 10 and 20):

  • More frequent signals

  • Faster reactions to price changes

  • Higher chance of false signals

  • Further apart periods (e.g., 20 and 50):

  • Fewer but stronger signals

  • Better for trending markets

  • Reduced false signals

Which exit strategy should I choose?

  • Indicator Confirmation:

  • Better for trending markets

  • Lets profits run in strong trends

  • May give back some profits when trend reverses

  • More suitable for longer-term trading

  • Profit Target or Stop Loss:

  • Better for ranging markets

  • Locks in profits at specific levels

  • Limits losses with clear stop loss

  • More suitable for shorter-term trading

How should I choose timeframes?

Consider your trading style:

  • Short-term trading:

  • Use 1m-15m timeframes

  • Smaller profit targets (0.5-2%)

  • Tighter stop losses

  • More frequent trades

  • Medium-term trading:

  • Use 1h-4h timeframes

  • Moderate targets (2-5%)

  • Standard stop losses (1-3%)

  • Daily trades

  • Long-term trading:

  • Use 4h-1d timeframes

  • Larger targets (5%+)

  • Wider stop losses

  • Weekly or monthly trades

What's the purpose of the Cooldown Period?

After closing a position, the bot waits for the specified number of candles before taking new trades. This helps:

  • Avoid choppy market conditions

  • Reduce overtrading

  • Allow trends to establish

  • Minimize commission costs

How does capital management work?

The bot:

  • Uses entire available capital for initial purchase

  • Updates available capital after each trade

  • Automatically reinvests profits

  • Accounts for trading fees (0.5% reserved)

Remember that moving average strategies work best in trending markets. In sideways or highly volatile markets, consider:

  • Using longer timeframes

  • Increasing the difference between MA periods

  • Setting appropriate profit targets and stop losses

  • Implementing longer cooldown periods

Did this answer your question?