The moment has finally come. After a month of testing, bug-fixing and optimising, this open source crypto trading bot has finally made a profit, but not in the way you would expect so let’s break it down below.
Quick recap on this Python crypto trading bot
Before we jump into it though, just a quick recap if you’re new here. About a month ago, I started building an open source crypto trading algorithm that would buy a new coin the moment that it’s being listed on Binance. The bot is coded in Python and free to use – check out the GitHub repo here.
I also made a video explaining the recent activity for this crypto trading bot as well as the developer journey so check it out below, or continue reading.
Does trading new coin listings work?
At this point, some of you may be asking – would this strategy work at all? Are we able to make consistent profits by placing orders on new coins the momemt they get listed on Binance?
Well, I’m glad you asked. Here’s my argument to support the idea that, yes it can potentially be a very profitable strategy.
As some of you may have noticed, many coins seem to go through to what I would like to call a “lightning-pump” during their first few seconds of being listed on an exchange.
If you have a look at the initial listing price of multiple coins, you will notice, what I would like to call a “lightning-pump” in the first 1 minute candle. For example, just have a look at the ICP initial coin listing below. The price shot up 10X in under a minute before stabilising again. The rationale behing the original version of this crypto trading algorithm was to buy low (where the green candle starts) and sell at the peak of the candle.
How this crypto trading bot became profitable
So I built the logic for it, with an initial reaction speed of 20 seconds. Soon enough, it became apparent that 20 seconds is way too slow. Fast forward a few iterations later, the trading bot can now detect and place an order on a new Binance listing in just 0.1 seconds.
Testing this out has been quite a challenge since I had to wait for new coins to be listed in order to see if an order will successfully be placed or the script would break entirely, but I’m happy to say that the script is relatively stable now.
So with that in mind, I went back to testing with 0.1 seconds speed of execution. And even this has proved to be too slow to make a profit by buying the listed price and selling a few seconds later, so this is what I did…
Just because we’re catching new coin listings at their peak that doesn’t mean we can’t make a profit on these massive swings. This is when I deceide to switch the orders around. Instead of placing buy orders on the Spot market, I have configured the bot to place margin sell orders.
And surely enough, it actually made 11% profit on a new coin listing with this strategy (in test mode).
The interesting part here is that it didn’t just make 11% profit on a regular coin listing, no. The trading bot detected a stablecoin listing, and made 11% profit on a stablecoin. What?
It placed a sell order on USDP (previouslt known as PAX) at 1.18 and closed the order at 1.05. There still some room to improve the exit strategy but I’m quite struck by the fact that it made this profit by catching a stablecoin listing.
Probably the biggest caveat for this strategy – any new coin listing would need to be added to margin trading by Binance in order for this strategy to work. I have not yet observed this I can’t say whether new coins are automatically added to margin trading or not. I they aren’t then we might have a substantial issue on our hands.
I will keep testing this strategy and hopefully confirm that new coins are added to margin trading. Sign up below to follow my updates.