Complete Guide to 3Commas SmartTrade Tool
One of the most important components of successfully navigating the markets is the actual management of funds once they have been allocated to trades. Having the proper tools to do so can mean the difference between marginal profitability and consistent, lasting income. This is because we often let winning trades turn into losing ones, and let losers carry on until they have killed our profits.
Trade management imposes a set of controls that can keep one’s capital intact over the long run. In this piece, I will explore the versatile features of the SmartTrade tool in 3Commas.
Getting Started With 3Commas SmartTrade
Once you have opened your 3Commas account, you will be able to access the SmartTrade feature from the main panel, below ‘Dashboard’.
You will arrive at a window that looks like this:
Once a coin pair is selected from the drop-down menu, a TradingView chart and exchange order book will be populated. One issue here is the latency factor. Upon testing, we found there was often a 1-3 second delay between the exchange and 3Commas platform. While not devastating, this could cause some small discrepancies in order execution and fill rates.
Using SmartTrade on 3Commas
Moving on from the coin selection, chart, and order book, we come to the next step where we enter the trade details.
Scroll down in the SmartTrade window to access the following:
You will notice there are four different types of trades shown at the top of the frame. These are Buy/Sell, Smart Trade, Smart Sell, and Smart Cover.
Buy/Sell is the same basic market/limit trade function found on your exchange. There is nothing special to know about it, other than the convenience it offers the user by allowing him to place trades on any exchange connected to 3Commas via API key. In the following sections, we will explore the other three order types.
SmartTrade & Smart Sell Features in 3Commas
Here’s where things get exciting! Working from left to right across the screen, one is able to set the parameters for a trade from start to finish. In the left column, an entry can be set up with order size, order type, and price. This can be done with a limit, market, or conditional order.
The difference between a limit and market order is the bid-ask spread. By using limit orders, you will get more favourable fills. Market orders are more likely to get filled but are also subject to slippage.
In the second column, take-profit targets are set for the trade. The split targets feature allows you to sell portions of your position at different price levels.
Trailing take profit will follow the highest price level attained by a certain percentage, after your final price objective is reached. This can be highly beneficial when coins pump more than expected.
The last column is the most important, because one should always determine the price at which a trade will be invalidated before entering it. Once that is worked out, this number can be placed into the stop loss calculator. It will then display the percentage risk on the trade.
Trailing stop loss can also be used, but our personal recommendation is to activate this only after the trade has moved significantly into profit (e.g. reaches your first price objective). Doing so before then can stop you out prematurely and before your invalidation level has been reached.
A more recent features is called Move to Breakeven. This makes it possible to move stops to entry after the first target is reached. That’s a fantastic option for most traders! The second column even tells us the approximate profit resulting from the split targets.
Another outstanding feature in the last column is the stop loss timeout. Oftentimes in crypto, there are flash moves that only last a minute or two. Getting caught in these can leave you scammed out of a perfectly good position.
The timeout feature can keep you in a position even if the coin momentarily wicks aggressively in the opposite direction of the trade. You can set this for however long you wish, and the amount of time should be proportional to the timerame your trade is based on. For low time-frame trades as an example (15M to 1H), our recommendation is 3-5 minutes.
Under the smart sell tab, you will find the same setup, except that this time it can only be used to take profit on an existing position. If the coins in your exchange account have any pre-existing orders attached to them, you will receive a message saying that you have insufficient funds to create a trade. In this case, you will need to cancel the open orders before proceeding.
Smart Cover Feature in 3Commas
The smart cover acts a lot like a simple bot configuration, which I have covered in a previous article called Using 3 Commas to Fully Automate Crypto Profits. The smart cover is a little more straightforward, however. Essentially, you will use this if you want to flip a position and buy it back at a lower price. This can be done with a coin you are accumulating, trading within a range, or selling in anticipation of a pullback.
Final Thoughts
The SmartTrade feature in 3Commas is a trade management tool used by many crypto traders not only to streamline the trading process, but also to optimize risk control and maximize profits.
To manage positions effectively, a trader must constantly monitor price action, watch charts, and place orders on various exchanges. Thankfully, this can all be done from the comfort of an all-in-one, cloud-based web application.
In fact, once you have learned the basics of the SmartTrade tool, it is easy to complete tasks very quickly and save countless hours of time over the course of a year. It also adds a benefit of reduced human error due to being able to check and verify all inputs before a trade goes live.
If this article was helpful, be sure to check out our other 3Commas guides on this site! Also, if you’re seriously considering a 3C subscription, now would be the best time to use this link for a special discounted price! You won’t regret it.
Note*
All information about various features is subject to change and some things in the application may have changed or appear differently by the time of reading. I do not officially represent the company but I am an active user and affiliate for the product.
