3Commas Review

What is 3Commas?

3Commas serves as a cloud-based trading terminal software. In essence, it is not an exchange for cryptocurrency sales. Instead, 3Commas offers an interface that seamlessly connects and synchronises with existing crypto exchanges featuring charting and order functionalities. 

3Commas trading bots offer manual traders a more advanced level of functionality and provide automated strategies and copy trading for traders who are looking to put their trading on autopilot by utilising artificial intelligence. 

3Commas Key Features

After signing in, users will have a 3-day trial with 3Commas and test out its key features. Let’s look at some of these key features offered!

Paper Trading Accounts

Paper trading, also known as account trading, is a crucial feature of 3Commas that users should utilise. Deploying this section of the platform, users can conduct a strategy mock and practice bots on demo accounts without risking live funds. 

It is crucial to emphasise this practice, given the widespread understanding that a significant number of traders using bots incur losses due to their lack of experience. Many traders neglect the essential step of mastering the trader’s mindset, and demo accounts often go underutilised. Impatience is a common pitfall, where traders rush into live trading, expecting immediate profits.

It’s noteworthy that over 90% of inexperienced traders using automated bots end up losing money. Therefore, it’s critical to understand that no single automated trading strategy can consistently thrive in all market conditions. While trading bots operate on static and rule-based principles, markets are dynamic, volatile, and unpredictable. Successful traders adopt different strategies for varying market conditions which cannot be mirrored by trading bots.

With that in mind, it’s advisable to thoroughly test any new strategy or bot on a demo account initially. A prudent approach involves testing the strategy or bot for 2-3 months, considering live funds only if a profit is sustained by the end of this period. A crucial aspect to underscore is the substantial risk associated with trading and automated bots, evident in the 90-90-90 rule discussed in TradingView’s article. Historical data reveals that 90% of traders lose more than 90% of their funds within their initial 90 days of trading, reinforcing the recommendation to prioritise demo accounts during the initial 2-3 months.

Connect Exchange APIs

The first step to execute orders on 3Commas is that users need to link their exchange accounts to the 3Commas platform. In essence, you need to give 3Commas access to your trading account and give it consent to execute trades on your behalf.

This is beneficial even for traders who do not want to use automated bots as they can conduct trades across various exchanges within one interface.

The procedure to link the APIs may differ depending on the exchanges you use. However, for most exchanges, you will simply navigate to the settings page and retrieve the API key. After obtaining the API key and API secret from your exchange, proceed to the Dashboard or My Portfolio on 3Commas, click on “Connect exchange,” then enter the required credentials to finish linking.

Automated Trading and Trading Bots

The primary appeal of the 3Commas platform lies in its trading bots, which have successfully attracted over 220,000 users. These bots offer high customization and user-friendly features, allowing traders to create bots effortlessly without requiring coding skills. Users can set up their own trading bots, choose pre-configured bots to run autonomously using artificial intelligence, or opt to copy bots created by fellow traders.

For those considering copying bots, it’s crucial to assess the statistics and performance of the bot before deciding. A noteworthy tip is to avoid solely selecting the best-performing bot with the highest return on investment (ROI). Bots displaying astronomical returns often involve an extreme level of risk, which can lead to significant losses. Opting for slow and steady growth tends to yield more sustainable results. Usually, highly profitable bots, capable of achieving extraordinary returns within a short period, often result in catastrophic losses within hours, days, or weeks. This underscores the importance of thorough testing on demo accounts.

When choosing a bot, it is advisable to select one with realistic returns and a proven track record of success over the long term. Opting for a bot with a consistent 3% monthly return that has demonstrated stability for a year is generally preferable to a bot that achieves a 400% return in a week but subsequently loses everything due to over-leveraging and excessive risk.

With this understanding, let’s delve into the various types of 3Commas trading bots available.

3Commas Grid bots

Grid bots are automated trading strategies designed to execute trades based on a predetermined pricing grid. Traders can choose a specific price point at which they want the bot to initiate trades. Subsequently, the bot continuously monitors the price, engaging in opening and closing trades based on the selected trading price range.

There are two options available for traders when using a grid bot:

• AI-based Strategy: Artificial intelligence determines the range for the upper and lower limits of the grid within which the bot operates.
• Manual Strategy: Traders can set the range, restricting the bot to buying or selling within the defined parameters. This method requires careful consideration of factors such as Average True Range and volatility. It is essential to recognize whether the market is exhibiting a range-bound/consolidating behaviour or is in a trending state. Grid bots are less effective in strong one-directional trends.

The customization of a grid trading bot can be done through a user-friendly interface, allowing traders to tailor the strategy to their preferences.

3Commas DCA Bots

Dollar-cost average (DCA) bots are well-suited for volatile markets characterised by frequent price fluctuations occurring multiple times within a day or week. These markets generally maintain a relatively stable range with several retracements.

This strategy proves advantageous for traders aiming to ensure a complete exit once a profit target is attained. To create a bot using this strategy, one can navigate to the designated area and configure parameters after selecting the “Create DCA Bot” button.

However, there is a flaw in dollar-cost average strategies. These strategies can falter and lead to substantial losses when the price follows a strong trend against the trader’s open position. In scenarios where there are no retracements in price, the basket of trades remains unable to close out in profit, resulting in amplified losses due to the additional open positions. While the dollar-cost average strategy has the potential to significantly boost a trader’s win rate under ideal trading conditions, it is not devoid of risks. For comprehensive insights into the dollar cost averaging (Martingale) strategy and its associated risks, the FX Axe YouTube trading channel provides an excellent video covering all essential aspects. 

SmartTrade/ Manual Trading

A quite huge weakness in almost every crypto exchange is the lack of trade-setting parameters available on the platform. For instance, crypto exchanges do not allow users to split take profit levels and use trailing profits, or do not even support simple trailing stop losses. 

SmartTrade on 3Commas, however, successfully addresses these flaws. Traders can set detailed parameters, settings, and customisations like: 

• Price
• Units to trade
• Alerts
• Stop loss timeouts
• Market, limit or conditional orders
• Profit target and split profit targets
• Trailing buys, trailing take profits, and trailing stop losses. 

The SmartTrade also holds notes and a trading record so that it can stay tuned to your trades and offer automatic summary of trading statistics. 

Tradingview Cryptocurrency Signal Finder

This feature can scan the crypto markets within microseconds to look for potentially profitable trade setups and alert users when they arise. It is quite straightforward but powerful and incredibly convenient. Traders may start by selecting/creating a bot: 

After that, users are navigated to a page displaying all the bot’s target info and a signal that needs to be entered into Tradingview. The platform can execute 4 order types, which are Buy, Strong Buy, Sell, and Strong Sell. 

Once a signal is issued, a 3Commas bot then carry out an order that comes with proper risk management parameters (e.g., a stop loss or take profit). The underlying specifics of what the bot searches for and what trades to execute can be fully modified. 

Portfolio Management

3Commas not only allows you to manage your own portfolio but also enables you to check out other traders’ portfolios. This is a huge advantage as you can compare your strategies and results to others and learn from them. However, it is noteworthy that you should use the same exchange with the traders you are copying their portfolios. 

Traders can perform the below functions in the Portfolio Management section: 

• Create portfolios with any coin amount
• View others’ performance and make analysis
• Copy and edit coin ratios of other users 
• Balance and rebalance your portfolio through coin ratio management

3Commas Pricing System

Users can freely choose between monthly subscription or annual subscription with a greater discount. It is advisable that you commit to a specific plan in a span, then you may consider upgrading. 

Monthly plans offered by 3Commas:

Annual plans offered by 3Commas: 

3Commas Security

On December 28th, 2022, 3Commas faced a security breach where a hacker exposed the API keys of 100,000 users on the Pastebin website. 

To counter the data leak, 3Commas has introduced an isolated Sign Center with additional security layers for exchanges. They have also expanded IP whitelisting functionality, providing users with more control over their security settings. While this incident has impacted the overall 3Commas review and affected users, the 3Commas team is committed to preventing such occurrences in the future.

The implementation of the Sign Center, a secure storage system for API keys, is a key measure to bolster the platform’s security. This feature introduces extra layers of protection to the 3Commas platform. When a trade request is initiated on an exchange, 3Commas services will request the Sign Center to sign the transaction, a process similar to how Metamask or Ledger sign transactions.

This additional security measure aims to prevent future hacking incidents and assure users that their funds and data are safeguarded. The company encourages users to review their security steps, providing a checklist with details of major exchanges and their current security status.

Exchanges and Cryptocurrency: What does 3Commas support?

3Commas offers 23 cryptocurrency exchanges with unlimited connections. You may also have multiple exchange accounts for the same exchange. However, not all features are available for all exchanges. Let’s take a look at the available exchanges and their features!

• Binance – Smart Trade, Portfolios, DCA Bots including Gordon bots, Margin Trading, GRID bots
• Binance DEX – Smart Trade
• Binance Futures – Smart Trade on Futures, DCA Bots, GRID bots
• Binance Jersey – Smart Trade, DCA Bots including Gordon bots, GRID bots
• Binance US – Smart Trade, DCA Bots including Gordon bots, GRID bots
• BitMEX – Smart Trade on Futures, DCA Bots, GRID bots
• Bitfinex – Smart Trade
• Bitstamp – Smart Trade
• Bittrex – Smart Trade, Portfolios, DCA Bots including Gordon bots
• Bybit – Smart Trade on Futures, DCA Bots, GRID bots
• Cex.io – Smart Trade
• Coinbase Pro (GDAX) – Smart Trade, DCA Bots including Gordon bots
• Crypto.com
• Deribit – NEW: Smart Trade on Futures
• Exmo – Smart Trade
• FTX and FTX.US – Smart Trade, Smart Trade on Futures, DCA Bots, GRID bots
• Gate.io – Smart Trade
• Gemini
• HitBTC – Smart Trade
• Huobi Global – Smart Trade, DCA Bots including Gordon bots
• Kraken – Smart Trade
• KuCoin – Smart Trade
• OKEx – Smart Trade, DCA Bots including Gordon bots
• Poloniex – Smart Trade, Portfolios
• YoBit – Smart Trade for pairs with daily volume over 2 BTC