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Shorting


One way to make up for a loss-making position is our Short and Trailing Stop-Short feature. It's an exciting feature for traders that are looking for an alternative for their traditional stop-loss.

Shorting is the practice of making a profit while the price of an asset goes down. Our way of shorting is a little bit different than "traditional" shorting, in that our shorting is more like a buyback function. When you expect a position to make a more significant loss, you initiate a Short, and your bot will sell the position. When you think the price has reached its bottom, you consolidate your short and directly buy back the position.

Let's say you bought 1 BTC for 8,000 USD, and you get a hunch that BTC is going to drop in value. You can then go to your Cryptohopper dashboard and click "short" on your BTC position. Cryptohopper will then sell your BTC, reserve these funds, and track the position in your shorting tab. You can then set up a buyback price, indicating at what price you want to buy back the asset. If/when the asset hits your chosen buyback price, your hopper will automatically repurchase it.

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Shorting can be done automatically and manually, so it’s an exciting feature for both manual and automatic traders.

Manual Shorting#

Manual shorting can be initiated by directly selecting a position and selecting “Short positions” from the bulk actions menu. This will move the position to “Short Positions”. Effectively, your position has been sold for your base currency, but your Hopper will track the position now and calculate the “profit” you have from selling it and rebuying it later. This can be done both from the regular as the advanced view.

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Let’s say you’ve shorted some positions. How does the reporting work? What do all the numbers mean?

shorting short trailing stop stop-short automated automatic crypto cryptocurrency bitcoin ethereum trading bot platform cryptohopper

  • The Percentage on the left indicates your result. This is different from open positions because a positive number will actually reflect a decline in price.

Take QKC in the figure above - since you sold it, the position has gone down 2.25%. This figure is green because you saved yourself from a 2.25% loss.

  • Moving on to the figure on the right, in the case of QKC, you see it in yellow: -13.79%. This figure indicates your actual result.

QKC was sold at -16.04%, but since your position has gone down 2.25%, your actual indicates a loss of -13.79%. The actual figure will show you at what point you could buy back an investment to help you break even on bags (loss-making positions).

Automatic Shorting#

Manual shorting is the easy part, but we’re algorithmic traders, so it’s in our nature to automate as much as we can. To do this, we do need to understand the configurations that we can adjust. This is also where you could use the “Trailing Stop-Short”, a great tool to automate your shorting. Like a Trailing Stop-Buy and the Trailing Stop-Loss, the Trailing Stop-Short keeps tracking the price so that it helps you close the short position when the price rises again.

We explain every single setting here, but first go through the essentials to get your automatic shorting going. Seeing all those potential configurations may seem daunting, but having a plan helps find what’s best for your Hopper.

Go to your Base Config -> select “Shorting Settings” -> and enable “Automatic Shorting”.

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To further configure shorting correctly, there are a few basic configurations. Ask yourself these questions:

  • When do you want your Hopper to start shorting automatically?

Most often, this is when a specific position is in a loss. You can enable that setting when your strategy sends a sell signal (indicating that it will go down) or select “always short instead of sell”. We advise the first option for beginners.

  • When should your short be “liquidated”, or, when should your Hopper buy back the position?

You can do this based on your strategy (advanced), by a certain “profit” (when you saved yourself from a certain percentage loss) or by using the TSS (Trailing Stop-Short), which closes the short when the price goes up by a certain percentage.

Automatic Shorting with Trailing Stop-Short (Beginner)#

A simple way to set up automatic shorting is with the help of the Trailing Stop-Short. When in your Base Config -> select “Shorting Settings” -> “Automatic Shorting” is enabled, enable Trailing Stop-Short.

Now we need to configure when your Hopper should close its Short automatically. For that, we have the “Arm trailing stop-short at” & “Trailing stop-short percentage”.

The “Arm trailing stop-short at” determines when your Hopper should start trailing the short position. Basically, how much loss should a position have before it will trail the price?

The “Trailing stop-short percentage” determines how much a price should rise again to close the short (buy back the same coin).

Did you know you could even use the Trailing Stop-Short to make a profit? Enable “Use trailing stop-short only,” and it will disable your shorting-take profit and only use your TSS settings.

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Automatic Shorting with your strategy (Advanced)#

This is more advanced because it’s harder to make a good strategy that indicates the best moments to short. Enable “Open short based on strategy” and “Close short based on strategy” in your shorting config.

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Next, make sure to select a good strategy for buying and a good strategy for selling. This is both done in your config at “Strategy” or “Sell Strategy.”

shorting short trailing stop stop-short automated automatic crypto cryptocurrency bitcoin ethereum trading bot platform cryptohopper

Where do you get the right strategies? Either download them from the Marketplace or create one yourself in the Strategy Builder.

These are the basics of shorting! Do you want more info about every single possible configuration? Read about the Shorting Configuration here.


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