Trading Bots User Guide

Overview

BlockbotX offers five types of trading bots, each designed for a different trading approach. This guide focuses primarily on the AI/Strategy bot -- the most versatile bot type that uses technical indicators to generate buy and sell signals automatically. For the other bot types, see their dedicated guides linked at the bottom of this page.

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Bot Types at a Glance

Bot Type	Best For	How It Works
AI/Strategy	Automated technical trading	Uses EMA, RSI, and Bollinger Bands to generate buy/sell signals
DCA	Long-term accumulation	Buys fixed amounts at regular intervals (hourly, daily, weekly, or monthly)
Arbitrage	Cross-exchange profits	Finds price differences between Binance and OKX
Signal	Following experts	Executes trades based on signals from external providers (Telegram, Discord, Webhook)
Pump Screener	Momentum trading	Detects volume spikes and price surges across monitored exchanges

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Prerequisites

Before creating a trading bot, make sure you have the following:

• A connected exchange account. Go to Settings > Connections (or the API Keys tab within the bot settings) and link your Binance or OKX account using your API key and secret key. OKX connections also require a passphrase.
• Sufficient balance on your exchange account. Your exchange account must hold enough funds (typically USDT) to cover the position sizes your bot will trade.
• Understanding of the trading pair you want to trade. Know the asset you plan to trade (e.g., BTCUSDT, ETHUSDT) and have a basic understanding of its price behavior and volatility.

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Creating Your First Bot

Step 1: Navigate to the Bots Page

From the dashboard sidebar, click Bots. This opens the My Bots page, which lists all your existing bots with their status, type, and profit/loss. If you have no bots yet, you will see a prompt to create your first one.

Step 2: Click "Create Bot"

Click the Create Bot button in the upper-right corner (or the "Create Your First Bot" button if this is your first time). This takes you to the bot creation page.

Step 3: Choose a Bot Type

You will see five bot type cards:

• DCA Bot -- Dollar-cost averaging strategy
• AI Bot -- AI-powered trading decisions
• Signal Bot -- Trade based on external signals
• Arbitrage Bot -- Profit from price differences
• Pump Screener -- Detect and trade pumps

Click the card for the type of bot you want to create. For this guide, select AI Bot.

Step 4: Configure Basic Settings

After selecting the bot type, fill in the configuration form:

1. Bot Name (required): Give your bot a descriptive name, such as "BTC Trend Follower" or "ETH Mean Reversion."
2. Description (optional): Add a brief description of what the bot does and why.
3. Trading Symbol (required for AI bots): Select your trading pair from the dropdown. Available symbols include BTCUSDT, ETHUSDT, BNBUSDT, ADAUSDT, and DOGEUSDT.

Step 5: Configure Strategy

For AI bots, select a strategy from the Strategy dropdown:

• Trend Following -- Follows market momentum using EMA crossovers.
• Mean Reversion -- Trades reversals using RSI and Bollinger Bands.
• Breakout -- Trades breakouts from consolidation ranges.
• Momentum -- A general momentum-based approach.

See the "Configuring Strategies" section below for full details on each strategy.

Step 6: Set Risk Parameters

Configure your risk level and position controls:

• Risk Level: Choose Low, Medium, or High. This sets the overall aggressiveness of the bot.
• Max Positions: The maximum number of trades your bot can hold open at the same time (default: 3).
• Stop Loss (%): The maximum loss percentage before automatically closing a position (default: 5%).
• Take Profit (%): The target profit percentage to automatically close a position (default: 10%).

Step 7: Save the Bot

Click Create Bot to save your configuration. You will see a success notification and be redirected to your new bot's detail page. From there, you can start the bot or further adjust its settings.

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Configuring Strategies

The AI/Strategy bot supports three core strategies. Each uses different technical indicators and is suited to different market conditions.

Trend Following

How it works: This strategy follows market momentum using Exponential Moving Average (EMA) crossovers.

• When the short EMA (fast) crosses above the long EMA (slow) and volume exceeds the average by a configurable multiplier, the bot generates a BUY signal.
• When the short EMA crosses below the long EMA, the bot generates a SELL signal.

Best for: Markets that are trending upward or downward with sustained directional moves.

Parameters you can adjust:

Parameter	Description	Default
Fast EMA period	The short-term EMA period (e.g., 9 candles)	9
Slow EMA period	The long-term EMA period (e.g., 21 candles)	21
Volume threshold	Volume must exceed this multiple of the average volume to confirm a signal	1.2x
Confirmation candles	Number of candles to wait before confirming the crossover	1

Mean Reversion

How it works: This strategy trades reversals by combining the Relative Strength Index (RSI) with Bollinger Bands.

• When RSI is below the oversold level AND the price is below the lower Bollinger Band, the bot generates a BUY signal (the asset is considered undervalued).
• When RSI is above the overbought level AND the price is above the upper Bollinger Band, the bot generates a SELL signal (the asset is considered overvalued).

Best for: Range-bound or sideways markets where prices oscillate between support and resistance levels.

Parameters you can adjust:

Parameter	Description	Default
RSI period	Number of candles used to calculate RSI	14
Oversold level	RSI value below which the asset is considered oversold	30
Overbought level	RSI value above which the asset is considered overbought	70
Bollinger period	Number of candles for Bollinger Band calculation	20
Bollinger standard deviations	Width of the bands (number of standard deviations from the mean)	2

Breakout

How it works: This strategy trades breakouts from Bollinger Band ranges, confirmed by volume spikes.

• When the price breaks above the upper Bollinger Band with a volume spike (volume exceeds the average by the configured multiplier), the bot generates a BUY signal.
• When the price breaks below the lower Bollinger Band, the bot generates a SELL signal.

Best for: Markets transitioning from periods of low volatility (consolidation) into strong directional moves.

Parameters you can adjust:

Parameter	Description	Default
Bollinger period	Number of candles for Bollinger Band calculation	20
Bollinger standard deviations	Width of the bands	2
Volume multiplier	Volume must exceed this multiple of the average to confirm the breakout	1.5x
Confirmation candles	Number of candles to wait before confirming the breakout	1

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Risk Settings

Risk management is critical to protecting your capital. The AI/Strategy bot provides the following risk controls. You can access these through the Strategy tab > Risk Management sub-tab on your bot's dashboard.

Setting	Description	Example
Position Size (%)	Percentage of your portfolio allocated to each individual trade	2%
Max Position Size (%)	Maximum percentage of your portfolio that can be in a single position	20%
Stop-Loss (%)	Maximum loss percentage before automatically closing a position	5%
Take-Profit (%)	Target profit percentage to automatically close a position	10%
Trailing Stop (%)	Follows the price upward and locks in gains. If the price drops by this percentage from its highest point since entry, the position is closed.	3%
Max Open Positions	Maximum number of trades the bot can hold simultaneously	3
Max Daily Trades	Maximum number of trades the bot can execute in a single day	10
Max Daily Loss (%)	If the bot's daily loss exceeds this percentage, it automatically pauses	5%
Max Drawdown (%)	If the total portfolio decline from its peak exceeds this percentage, the bot pauses	15%

Advanced risk options:

• Partial Take-Profit (%): Take partial profit at a specified level before the full take-profit target.
• Partial Take-Profit Size (%): The percentage of the position to close at the partial take-profit level (e.g., 50% of the position).

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Paper Trading vs Live Trading

Paper Trading

Paper trading is simulated trading that uses real market prices but does not execute real orders on your exchange. It is the safest way to test a strategy.

• No real money is at risk.
• Uses real-time market prices from your connected exchange.
• Performance tracking is identical to live trading (the same KPI cards, charts, and metrics).
• Your paper trading balance is tracked separately.
• Recommended for all beginners and whenever you are testing a new strategy or parameter set.

Live Trading

Live trading executes real buy and sell orders on your connected exchange account.

• Requires a funded exchange account with sufficient balance.
• Uses your encrypted API keys stored in the database (AES-256-GCM encryption).
• Trades are executed at market prices, subject to exchange fees and slippage.
• Start with small position sizes until you are confident in your strategy's performance.
• You can switch a bot from paper to live trading (and vice versa) at any time from the bot's settings.

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Starting and Stopping Bots

Starting a Bot

From your bot's dashboard, click the Start button in the header. The bot will begin executing its strategy on its configured interval. The status indicator changes from gray/inactive to green/active.

When a bot starts:

1. It fetches current market data (candlestick/OHLCV data) from your connected exchange.
2. It calculates technical indicators (EMA, RSI, Bollinger Bands, etc.) based on the historical candles.
3. It evaluates the strategy conditions and generates a signal: BUY, SELL, or HOLD.
4. If the signal is BUY or SELL and passes the confidence threshold, the bot executes the trade (or simulates it in paper mode).
5. It logs the execution result, including the signal, confidence level, price, and reason.

Stopping a Bot

Click the Stop button. The bot completes its current execution cycle, then stops. It will not open any new positions after stopping. Existing open positions remain open until you manually close them or restart the bot.

Bot Statuses

• Active: The bot is running and executing its strategy on schedule.
• Paused: The bot has been temporarily paused (e.g., due to hitting a daily loss limit or max drawdown). It can be resumed.
• Stopped: The bot has been manually stopped and is not executing.

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Monitoring Performance

Once your bot is running, the AI Bot Dashboard provides five tabs for monitoring.

Overview Tab

The top of the dashboard shows four KPI cards:

• Portfolio Value: Your current balance, with today's percentage change.
• Total Profit: Your overall return percentage, with weekly and monthly breakdowns.
• Win Rate: The percentage of successful trades, along with counts of successful and failed trades.
• Market Condition: The current overall market condition (e.g., Bullish, Bearish, Neutral) with volatility and sentiment indicators.

Below the KPI cards, the Overview tab displays:

• A performance chart showing balance and profit over time.
• Recent trades with entry/exit prices, amounts, and individual P&L.
• AI insights -- contextual observations about market conditions and bot behavior.

Portfolio Tab

Shows the assets your bot is currently holding, including:

• Symbol and current price
• Allocation percentage
• 24-hour price change

You can click on any asset to view details, adjust its allocation, view its trade history, or remove it from the portfolio.

Strategy Tab

The Strategy tab is divided into three sub-tabs:

1. Strategies: View, create, edit, clone, and delete trading strategies. Toggle strategies on and off. Each strategy card shows its name, description, risk level, and timeframe.
2. Risk Management: Adjust all risk settings (position size, stop-loss, take-profit, trailing stop, max positions, max daily trades, max daily loss, max drawdown).
3. Performance: Side-by-side comparison of strategy performance (return over 30 days) and risk metrics (Sharpe ratio, max drawdown, win rate, profit factor, average trade P&L).

Trades Tab

A detailed list of all executed trades, including:

• Timestamp
• Trading pair
• Trade type (buy/sell)
• Entry price and amount
• Status (completed, pending, cancelled, failed)
• Profit/loss per trade

Settings Tab

Bot configuration settings organized into four sub-tabs:

1. General: Bot name, auto-start, log level, max concurrent trades, and trading hours.
2. API Keys: View and manage connected exchange accounts. Test connections, add new exchanges, or remove existing ones.
3. Notifications: Configure alerts via email, push notifications, Discord, and Telegram. Toggle individual alert types (trade alerts, profit alerts, loss alerts, system alerts).
4. Advanced: Additional configuration options for fine-tuning bot behavior.

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Bot Templates

Bot Templates provide pre-built configurations for common trading strategies, so you do not have to configure everything from scratch.

Browsing Templates

Navigate to the Bot Templates page from the dashboard sidebar. You will see a grid of template cards, each showing:

• Template name and description
• Category (AI & Machine Learning, Dollar-Cost Averaging, Grid Trading, Arbitrage, Scalping, DeFi & Yield, Technical Analysis)
• Strategy type (Trend Following, Accumulation, Market Making, Cross-Exchange, Momentum, Yield Farming, Breakout, Sentiment Analysis)
• Complexity level (Beginner, Intermediate, Advanced)
• Performance metrics and rating

Filtering and Sorting

Use the search bar to find templates by name or keyword. Sort templates by:

• Most Popular
• Highest Rated
• Newest First
• Price: Low to High
• Price: High to Low
• Best Performance

Switch between category tabs to narrow your results.

Deploying a Template

1. Click on a template card to open its detail modal.
2. Review the strategy description, default settings (risk level, trading pairs, timeframe, max positions, stop-loss, take-profit), and performance data.
3. Click Deploy to create a new bot from the template. This pre-fills the bot creation form with the template's configuration.
4. Adjust any settings as needed, then save.

Favoriting Templates

Click the favorite icon on any template card to add it to your favorites for quick access later.

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Backtesting

Backtesting lets you test your strategy against historical market data before risking real capital.

How to Run a Backtest

1. Configure the backtest parameters:
   • Trading pair: The symbol to test (e.g., BTCUSDT).
   • Start date and end date: The historical time period to test against.
   • Initial balance: The simulated starting balance (in USDT).
   • Timeframe: The candlestick interval (1m, 5m, 15m, 30m, 1h, 4h, 1d).
   • Strategy configuration: The same strategy and parameter settings your bot would use in live trading.
   • Risk settings: The same risk controls (position size, stop-loss, take-profit, etc.).
2. Optionally set commission (trading fee percentage, default 0.1%) and slippage (price slippage percentage, default 0.05%) for more realistic results.
3. Run the backtest.

Understanding Backtest Results

The backtest report includes:

• Total return: The overall percentage gain or loss over the test period.
• Sharpe ratio: A measure of risk-adjusted return. Higher is better. A ratio above 1.0 is generally considered acceptable; above 2.0 is very good.
• Max drawdown: The largest peak-to-trough decline during the test period. Lower is better.
• Win rate: The percentage of trades that were profitable.
• Trade count: The total number of trades executed during the test period.
• Profit factor: Total profit divided by total loss. A value above 1.0 means the strategy is profitable; above 2.0 is considered strong.
• Equity curve: A chart showing how your portfolio value changed over time.
• Individual trade list: Every trade with entry price, exit price, quantity, profit/loss, duration, and exit reason (take-profit, stop-loss, strategy signal, or manual).

Tips for Backtesting

• Test across different market conditions (bull markets, bear markets, and sideways markets).
• Adjust parameters incrementally and compare results.
• Be wary of overfitting -- a strategy that performs perfectly on historical data may not perform well in live markets.
• Use the backtest results to set realistic expectations for live trading performance.

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Tips for Success

1. Start with paper trading. Always test a new bot or strategy in paper mode first. Verify that the logic, risk settings, and trade frequency match your expectations before switching to live trading.

2. Test strategies with backtesting first. Run backtests across multiple time periods and market conditions. A strategy that only works in bull markets may lose money in a downturn.

3. Use conservative risk settings initially. Start with a small position size (1-2% of your portfolio per trade), a tight stop-loss (3-5%), and a low max drawdown limit (10-15%). You can loosen these as you gain confidence.

4. Monitor your bots regularly. Even automated bots require oversight. Check the dashboard daily to review trades, verify performance, and ensure the bot is behaving as expected.

5. Diversify across multiple strategies and pairs. Running a single strategy on a single pair concentrates your risk. Consider running a Trend Following bot on BTC alongside a Mean Reversion bot on ETH, for example.

6. Do not over-leverage. Keep your total exposure (across all bots) to a level you can afford to lose. Never trade with money you cannot afford to lose entirely.

7. Understand the indicators. Learn what EMA crossovers, RSI, and Bollinger Bands actually measure. This helps you choose the right strategy for the current market and interpret your bot's decisions in the execution logs.

8. Review execution logs. The bot logs every decision it makes, including the signal (BUY, SELL, HOLD), confidence level (0-100), the reason for the decision, and the indicator values at the time. These logs are invaluable for understanding and improving your strategy.

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Timeframe Reference

The timeframe setting determines the candlestick interval the bot uses for analysis.

Timeframe	Label	Typical Use
1m	1 minute	Scalping, very short-term
5m	5 minutes	Short-term intraday
15m	15 minutes	Intraday trading
30m	30 minutes	Intraday to short swing
1h	1 hour	Swing trading (most common default)
4h	4 hours	Medium-term swing trading
1d	1 day	Long-term position trading

Shorter timeframes generate more signals but are also more susceptible to noise and false signals. Longer timeframes generate fewer, higher-quality signals but require more patience.

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Glossary

• EMA (Exponential Moving Average): A moving average that gives more weight to recent prices. Used to identify trend direction.
• RSI (Relative Strength Index): An oscillator that measures the speed and magnitude of price changes. Values range from 0 to 100; below 30 is considered oversold, above 70 is overbought.
• Bollinger Bands: A volatility indicator consisting of a middle band (SMA) and upper/lower bands set at a configurable number of standard deviations from the middle. Price near the bands suggests overbought/oversold conditions.
• Stop-Loss: An automatic order to sell a position when the price drops to a specified level, limiting losses.
• Take-Profit: An automatic order to sell a position when the price rises to a specified level, locking in gains.
• Trailing Stop: A stop-loss that moves upward as the price increases, maintaining a fixed percentage distance from the highest price reached.
• Drawdown: The decline from a portfolio's peak value to its lowest point. Max drawdown measures the worst historical decline.
• Sharpe Ratio: A measure of risk-adjusted return, calculated as (return - risk-free rate) / standard deviation of returns.
• Win Rate: The percentage of trades that resulted in a profit.
• Profit Factor: The ratio of total profit to total loss. A value above 1.0 means the strategy is net profitable.
• Paper Trading: Simulated trading using real market prices but no real money.
• Slippage: The difference between the expected price of a trade and the actual execution price.
• OHLCV: Open, High, Low, Close, Volume -- the standard candlestick data format.

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Related Guides

• DCA Bot Guide -- Dollar-cost averaging strategy
• Arbitrage Bot Guide -- Cross-exchange arbitrage between Binance and OKX
• Signal Bot Guide -- Trading based on external signal providers
• Pump Screener Guide -- Detecting and trading volume/price surges