Category Archives: Blog

What is Bitcoin?

I was asked at the start of the year what is bitcoin, is it all virtual, and are you actually buying and selling anything real? This is the answer I gave, and I’m reposting it here as it may be useful to newcomers.

In a nutshell Bitcoin is virtual or software money, it’s a little bit like how banks used to issue their own currency in the past. The clever thing about it is that it is trustless – for hundreds of years people have wanted a universal payment system that didn’t need a third party to take their money (credit and debit cards, PayPal, Western Union, etc.) and Bitcoin was the first to solve that. A network of computers around the world hold a record of all Bitcoin transactions ever, and when a new transaction (block) takes place it is added to the list of previous transactions with a software pointer to the previous transaction (so it is impossible to add, remove or replace any transaction without breaking the chain) – hence the term Blockchain. That makes Bitcoin virtually impossible to hack. Also anyone can run one of these computers – I did for a while – so it is completely decentralised and no-one can change Bitcoin or devalue it.

What is Bitcoin? (Image: AI/BIC)
What is Bitcoin? (Image: AI/BIC)

There will only ever be 21 million BTC, that is fixed, and 19M have already been issued, following an algorithm hardcoded into it. As to whether you are buying and selling anything real, that is a complex question. Since fiat currency (pounds, dollars, etc.) are no longer connected to anything but printed at will there you are definitely not buying and selling anything real – all you know is that there will be more next year and what you’ve got will be worth less, which can’t happen with Bitcoin. I don’t want to get into the politics, suffice to say a staggering amount of new currency was created in the pandemic (https://techstartups.com/…/80-us-dollars-existence…/) and we are starting to reap the effects of that with inflation and the cost of living crisis. Suffice to say that the big investment houses and banks know all this and have been getting into BTC for the last few years. A number of applications for Bitcoin funds have also gone in, with Blackrock the biggest, and approval is hoped/expected for January. At that point tens of thousands of businesses and pensions will be able to buy into Bitcoin ETFs, which will jump up the demand for Bitcoin (since any money invested has to be backed by the same amount of Bitcoin being bought, same as a gold ETF).

In parallel, the next halving is in April when the amount of Bitcoin produced per transaction halves, so we are hitting a demand/supply perfect storm. I believe Bitcoin will continue its bull run until late next year and will definitely exceed $80k but could potentially exceed $200k. My first 2 Bitcoin I bought for £500 each in 2017, and continue to buy in whenever I can. I think people with software knowledge are able to appreciate it better than most, and in the bigger picture we are still early into Bitcoin. Some people say it will eventually replace fiat currency altogether, as the world becomes more digitised, but certainly its increasing use by banks, and as sovereign currency (El Salvador so far, other countries likely to follow), show the direction of travel is clear. I expect in the next 4 year halving cycle (from early 2027) it could hit $1M per Bitcoin.

How to Buy Your First Bitcoin on Coinbase (2024)

Before buying your first Bitcoin on Coinbase you need to open an account as described in How to Open a Coinbase Account to Buy Bitcoin (2024).

After that you will have an account page that looks like this – with 2 of 4 steps complete:

Coinbase Account page (Bitcoin-Investors.co.uk)
Coinbase Account page (Bitcoin-Investors.co.uk)

Click on Add a payment method to get to the next screen:

Coinbase Add payment method (Bitcoin-Investors.co.uk)
Coinbase Add payment method (Bitcoin-Investors.co.uk)

Here for simplicity we’ll add a debit card:

Coinbase Link card (Bitcoin-Investors.co.uk)
Coinbase Link card (Bitcoin-Investors.co.uk)

Fill in the details and press Add Card. That will add the card as a new payment method and you’ll be returned to the main account page, now showing 3 of 4 steps complete:

Coinbase Payment added (Bitcoin-Investors.co.uk)
Coinbase Payment added (Bitcoin-Investors.co.uk)

Next select Buy crypto then Continue and trade crypto:

Coinbase Trade crypto (Bitcoin-Investors.co.uk)
Coinbase Trade crypto (Bitcoin-Investors.co.uk)

At this point you will be required to pass a quiz on crypto to show you understand what you’re doing – rather ‘nanny state’ but that’s where we are. It’s best to select Read our crypto guide and then learn the basics about crypto:

Coinbase Crypto quiz (Bitcoin-Investors.co.uk)
Coinbase Crypto quiz (Bitcoin-Investors.co.uk)

There are then a dozen screens like the following to read through:

Coinbase Crypto quiz 2 (Bitcoin-Investors.co.uk)
Coinbase Crypto quiz 2 (Bitcoin-Investors.co.uk)

On the last one select Take the test:

Coinbase Crypto quiz 3 (Bitcoin-Investors.co.uk)
Coinbase Crypto quiz 3 (Bitcoin-Investors.co.uk)

There are then half a dozen quiz questions like the following – in most cases you will be right if you choose the most pessimistic or negative response!

Coinbase Crypto quiz 4 (Bitcoin-Investors.co.uk)
Coinbase Crypto quiz 4 (Bitcoin-Investors.co.uk)

Once you’ve passed, select Continue and trade crypto:

Coinbase Crypto quiz 5 (Bitcoin-Investors.co.uk)
Coinbase Crypto quiz 5 (Bitcoin-Investors.co.uk)

You’ll finally get to the Buy screen – in future you can just select this from the main account page menu. Here the £ option has been selected (to spend so many pounds sterling on Bitcoin, e.g. £100) but you can instead select the BTC option (to buy so much Bitcoin, e.g. 0.1, and be told how many pounds this will cost). Enter the amount required. Note the card you entered will be shown at the bottom, with a credit limit:

Coinbase Crypto buy screen (Bitcoin-Investors.co.uk)
Coinbase Crypto buy screen (Bitcoin-Investors.co.uk)

Press Preview Buy, note here that the exchange rate changes live:

Coinbase Crypto buy screen 2 (Bitcoin-Investors.co.uk)
Coinbase Crypto buy screen 2 (Bitcoin-Investors.co.uk)

Press Buy now:

Coinbase Crypto buy screen 3 (Bitcoin-Investors.co.uk)
Coinbase Crypto buy screen 3 (Bitcoin-Investors.co.uk)

And you’ve bought your first Bitcoin! Note that the value of your Bitcoin will be shown at the bottom, and it will be less than you asked for – there are always trading fees, for buying and selling, so you’ll have to get used to this. Coinbase fees are quite high (here £100 bought £95 of Bitcoin, so nearly 5%!). There are ways to reduce this – but that’s beyond the scope of this article (if you’re going to spend a lot of money, do investigate Coinbase One – but you will have to learn how to do trading).

A short time later the Bitcoin will appear in your account. The subject of how Bitcoin is transferred and how long it will take is a big topic in its own right (essentially the speed depends on how large the fee is that Coinbase spends on the transaction). Suffice to say it should arrive within 10 minutes but may be much faster. Conversely, if there’s a lot happening in the Bitcoin market (e.g. the price is changing fast and lots of people are buying and selling) then it could take longer – I have known it take more than an hour when the network is very busy.

Click on View details to get taken to the Bitcoin Primary balance page (in future you can select this from your main account page):

Coinbase Primary balance (Bitcoin-Investors.co.uk)
Coinbase Primary balance (Bitcoin-Investors.co.uk)

This shows your current holdings of Bitcoin and the pound sterling equivalent. For a more general overview, return to Home:

Coinbase Account home (Bitcoin-Investors.co.uk)
Coinbase Account home (Bitcoin-Investors.co.uk)

Also note that if you buy multiple cryptocurrencies (e.g. Ethereum, USDC, etc.) you can see the balance of each coin, plus the total value of your portfolio, via the My assets menu and page:

Coinbase Assets page (Bitcoin-Investors.co.uk)
Coinbase Assets page (Bitcoin-Investors.co.uk)

Welcome to cryptocurrency and Bitcoin – you are no longer a Nocoiner! There will only ever be 21 million Bitcoin in existence so you own something that no-one else can own (that’s part of the reason why its value is trending upwards).

Further blog posts will cover how to securely store, lend and trade Bitcoin. Welcome to the crypto community!

How to Open a Coinbase Account to Buy Bitcoin in the UK (2024)

Buying Crypto

This is an introduction to buying Bitcoin for those new to cryptocurrencies in general and to Bitcoin in particular. The first step is to create an account on a website where you can buy some crypto (elsewhere we’ll look at how to hold your cryptocurrency in your own ‘wallet’).

Here I’ll show you how to create an account at Coinbase.com. It claims to be “the most trusted platform in the UK for buying, selling and trading crypto” and is certainly very well known worldwide. As well as being popular it is also easy to use. It is not the cheapest nor the most fully featured platform and so we’ll look at other platforms later (like Nexo.com) for those more experienced with cryptocurrencies. Coinbase is, however, good for newcomers.

The process has got more onerous over the years, unfortunately, probably due to the UK government’s increasing requirements for financial institutions to follow Know Your Customer (KYC) rules. If you look through the process below in advance you’ll understand what you need to do before you get on the Coinbase website.

Opening a Coinbase Account

Go to the following website: https://www.coinbase.com/en-gb/

When you follow that link you’ll see a webpage like the following:

Coinbase UK Home Page (Bitcoin-Investors.co.uk)
Coinbase UK Home Page (Bitcoin-Investors.co.uk)

Then go through the following steps.

  1. Click on the Sign up button, enter your email address and click Continue:
Coinbase Sign Up Page (Bitcoin-Investors.co.uk)
Coinbase Sign Up Page (Bitcoin-Investors.co.uk)

3. Enter your first and last name and a secure password.

A good place to get a password is PasswordsGenerator – choose a length of 16 characters and include symbols, numbers and upper and lowercase characters. Make sure at this point that you record the password somewhere, e.g. in a new document. You will need a lot of passwords when dealing with cryptocurrency and the general rule is that if you lose the password you can lose the money! Get into careful organisation now.

If your password is suitably secure you will see the green lines below the password box as shown below. Make sure the check box is ticked, and press Create free account. You may need to pass a Captcha at this point.

Coinbase Create Account Page (Bitcoin-Investors.co.uk)
Coinbase Create Account Page (Bitcoin-Investors.co.uk)

4. You’ll come to the Verify email screen:

Coinbase Verify Email Page (Bitcoin-Investors.co.uk)
Coinbase Verify Email Page (Bitcoin-Investors.co.uk)

Go to your email interface (Outlook, Gmail or whatever) to find the email and click on the Verify Email Address button:

Coinbase Verification Email (Bitcoin-Investors.co.uk)
Coinbase Verification Email (Bitcoin-Investors.co.uk)

5. You should now be able to login to Coinbase with the email and password you provided:

Coinbase Sign In (Bitcoin-Investors.co.uk)
Coinbase Sign In (Bitcoin-Investors.co.uk)

At which point you may be emailed a code to enter:

Coinbase Sign In Code (Bitcoin-Investors.co.uk)
Coinbase Sign In Code (Bitcoin-Investors.co.uk)

7. Once logged in you will have a bunch more questions to answer:

Coinbase Sign In email option (Bitcoin-Investors.co.uk)
Coinbase Sign In email option (Bitcoin-Investors.co.uk)
Coinbase Sign In phone (Bitcoin-Investors.co.uk)
Coinbase Sign In phone (Bitcoin-Investors.co.uk)
Coinbase Sign In citizenship (Bitcoin-Investors.co.uk)
Coinbase Sign In citizenship (Bitcoin-Investors.co.uk)

8. Enter your date of birth and home address and answer some questions:

Coinbase Sign In personal information (Bitcoin-Investors.co.uk)
Coinbase Sign In personal information (Bitcoin-Investors.co.uk)
Coinbase Sign In personal information (Bitcoin-Investors.co.uk)
Coinbase Sign In personal information (Bitcoin-Investors.co.uk)

9. Next we have to get through all the KYC and ‘be careful crypto is dangerous’ warnings and questions. Most people reading this will be Restricted Investors:

Coinbase Sign In KYC (Bitcoin-Investors.co.uk)
Coinbase Sign In KYC (Bitcoin-Investors.co.uk)
Coinbase Sign In KYC (Bitcoin-Investors.co.uk)
Coinbase Sign In KYC 1 (Bitcoin-Investors.co.uk)
Coinbase Sign In KYC (Bitcoin-Investors.co.uk)
Coinbase Sign In KYC 2 (Bitcoin-Investors.co.uk)
Coinbase Sign In KYC (Bitcoin-Investors.co.uk)
Coinbase Sign In KYC 3 (Bitcoin-Investors.co.uk)

10. Finally, if you have had the patience, you will have got through all the KYC requirements:

Coinbase Sign Up (Bitcoin-Investors.co.uk)
Coinbase Sign Up (Bitcoin-Investors.co.uk)

11. Next, you have to do identity verification, again most likely due to government requirements for Anti-Money Laundering (AML). For most people the simplest option is likely to be uploading a scan or photo of the back and front of their driving licence:

Coinbase Sign Up identity verification (Bitcoin-Investors.co.uk)
Coinbase Sign Up identity verification (Bitcoin-Investors.co.uk)
Coinbase Sign Up identity verification 2 (Bitcoin-Investors.co.uk)
Coinbase Sign Up identity verification 2 (Bitcoin-Investors.co.uk)
Coinbase Sign Up identity verification 3 (Bitcoin-Investors.co.uk)
Coinbase Sign Up identity verification 3 (Bitcoin-Investors.co.uk)

12. After you press the Upload button you will get an acknowledgement:

Coinbase Sign Up identity verification 4 (Bitcoin-Investors.co.uk)
Coinbase Sign Up identity verification 4 (Bitcoin-Investors.co.uk)

It’s worth keeping this window open until it completes; if you try to sign out you may have to start again. At some point it will complete (in the example shown it took less than 5 minutes) and you will be signed into your new account on Coinbase:

Coinbase Sign Up success (Bitcoin-Investors.co.uk)
Coinbase Sign Up success (Bitcoin-Investors.co.uk)

At this point let’s take a break, and we’ll continue setting up inside your account in another article. By all means now take a look around the Coinbase platform and see what features are available to you.

Next: How to Buy Your First Bitcoin

The Stock-to-Flow Model (S2F) and the Virtue of Hodling

Having a lot of your net worth in Bitcoin can be a rollercoaster as the price of Bitcoin is so volatile. One day you’re up 20%, the next day you’re down 25%. I have bought and sold regularly in the past, very often at the wrong times, and found the whole business very stressful.

These days I mostly just Hodl, and so far that has worked well. One of the reasons I changed strategy was Stock to Flow, and that’s what I’d like to talk about today.

Like the infamous alchemists of old, most people in crypto are looking for shortcuts to wealth. Finding the cheap coins before they rise in value, looking for the trends in price, particularly the dips, etc. I’m just the same, and over the years I’ve been doing crypto I have had a particular eye out for predictions – mathematical models – of the future Bitcoin price so that I would know what was coming down the line. The thing is, with Bitcoin, such predictions may be possible and practical. While the value of most assets is at the whim of the market, and their supply can respond to changes in demand, Bitcoin is different. Its entire supply is defined in code – we know there will only ever be 21 million, and we know more are created every 10 minutes, and so on. Therefore it seems credible that its price could be predicted in the future.

I have looked into various models and many of them seem to have some value for predicting price and/or market peaks, for example:

All of these have some value but none appeared to me to be both precise enough and easy to read.

Instead the model I always return to is Stock-to-Flow. This was introduced to the community by a Dutch trader known as ‘Plan B’ (aka ‘100TrillionUSD’) through an article on Medium early in 2019: Modeling Bitcoin Value with Scarcity. It caused quite a stir with its bold claims. Firstly, that Bitcoin price could be accurately modelled into the future. Secondly, fundamentally, it was all about the rate of creation of new Bitcoins. In particular, because the rate of creation drops in half every 4 years (in events known as ‘halvings’) it was able to match and predict the four year boom-bust cycles that Bitcoin is prone to. For the details, it’s well worth reading through the article.

I have now been following this model for two years and have repeatedly found that it works, the match between prediction and reality is good enough to inform my view of the market and the way that prices are going – and that’s a very reassuring feeling. It is a logarithmic model so with its wide error bars (1 and 2 standard deviations) you have to accept that the Bitcoin price can still vary hard and fast and be within the broad range of the model. However, it always seems to get the long term trends correct. Personally I check it about once a day, and usually find it has the price about right and well within 1 standard deviation. I take note, however, if the price starts tending out of the 1sd range – something that happened at the height of the Covid panic, and a couple of times since. However, the bitcoin price has always returned to the model, and I have relaxed.

There are various instances of the model available online. There is a well known one here: Bitcoin stock to flow model live chart. It is well featured, with the ability to zoom in live etc. However, the one I always return to, and which I believe most closely matches the S2F model as defined in the original Medium article is here: Daily updated charts of Bitcoin’s stock-to-flow vs price. In particular, the chart I check about daily is this one: Bitcoin daily stock-to-flow and price (2 years).

Bitcoin daily stock-to-flow and price (Image:s2f.hamal.nl)
Bitcoin daily stock-to-flow and price (Image:s2f.hamal.nl)

Hodling while watching the S2F chart has worked well for me over the last year or two, and in particular has helped me to be steady through the various downturns. However, it’s worth noting two things on the S2F charts. Firstly the good news is that Bitcoin will hit a peak this summer and it will be at least $100k. Secondly the bad news is that the period approaching a peak is very volatile, and after each previous post-halving peak there has been a big crash.

In other words the real price goes above the prediction at a peak and drops below it in the months following:

Bitcoin all time price (Image: s2f.hamal.nl)
Bitcoin all time price (Image: s2f.hamal.nl)

Therefore I will be looking to ‘reduce my exposure’ as the price passes $90k. That doesn’t necessarily mean I’ll sell any Bitcoin, as it has been hard to come by, but I will at least cancel the Bitcoin loans I have taken out and then hunker down for a likely tumultuous following year or so.

So that’s Bitcoin stock-to-flow (S2F) in a nutshell. I can’t tell you how you should use it, but it has worked well for me, both psychologically and financially in guiding my trades.

Before I go, for completeness, I’ll just touch on Bitcoin S2FX. A year after Plan B announced the original S2F model he introduced a refined version called Stock-to-Flow Cross Asset (S2FX); for the details see here. The new model is more attractive in a number of ways, for example giving more justification for the application of S2F theory, and also predicting a high this summer for Bitcoin near $300k. However, I find the theory less convincing and by eye I don’t think its price predictions are quite as close to real prices as the original model. Take a look, though, it may work for you. Of course it does rather muddy the waters: if Bitcoin hits $200k this summer then it could be S2FX being correct, and the value will keep going up, or it could be S2F is correct, and it’s just about to crash. But then investing in Bitcoin has never been boring!

What is the Current Outlook for Bitcoin?

I’m a big fan of Bitcoin and over the years made many more buys than sells – in a nutshell, my default position, whether the market has gone up or down, has been to HODL.

However, that is starting to change – despite my view that I believe Bitcoin will go up in value hugely in the future. I am a long term Bitcoin bull and think that it will beat its all time high in the next few years.

In the short term, though, there’s no getting away from the fact that Bitcoin is going down. Despite a few rallies and spikes it has been dropping pretty consistently since the New Year, and now has half the value it did then (£5k vs £10k).

Bitcoin Price on Trading View 2018 (Image: BIUK)
2018 Bitcoin Price on Trading View (Image: BIUK)

I had got used to the price of Bitcoin going steadily down and hadn’t thought too much about it. I had bought most of mine at £1k – £3k so I wasn’t bothered. Then on 25th July everything changed for me.

Oddly what woke me from my stupor was an email from BullionByPost telling me that the Gold price was beginning to climb. Was it particularly low, I wondered? I idly looked into it and found that, incredibly, at £935/ounce (spot price) it was at the lowest it had been for 8 months, and very nearly the lowest it had been for 18 months.That woke me up. Here I was sitting on a stack of Bitcoin slowly decreasing in value while missing out on other investments. Being a keen proponent of hedging, this made no sense.

I Immediately looked into the Bitcoin price, which I had ignored for some time, and saw that it had been rising, erratically, for exactly a month to a peak of £6400 but since 6am that morning (25th) had been dropping sharply. It was now mid evening.

Bitcoin Price on Trading View from 27 June to 27 July (Image: BIUK)
Bitcoin Price on Trading View from 27 June to 27 July (Image: BIUK)

I took one Bitcoin out of cold storage (on a Ledger Nano) and transferred it to Pro.Coinbase. As soon as the transaction went through, at about 1130pm, I sold it. I got £6300.

By 0020 I had bought 7 one ounce gold coins for an average of £976 each. The total was £6343. That seemed like a very good hour’s work.

Just 36 hours later the value of Bitcoin had sunk to £6000. I decided it was time to start active trading again, if only to hedge against what seemed like inevitable losses if I kept staying out of the market.

I came up with a plan to offload Bitcoin at the best price I could get, ready to buy it back once it had gone lower.

More to come in the next blog post.

Manual Crypto Trading 1: Forex Training

I recently attended a ‘Fast-track Forex Training Programme’ organised by Trendsignal Ltd. I have always been sceptical of Forex (‘foreign exchange’, i.e. currency) trading as a means to make money unless you’re a professional. However, a friend was already going along and there was an extra ticket so I thought I might as well give it a go.

My hope was that the day would give me useful information about trading techniques that I could apply to my cryptocurrency trading (most of which is currently done with a bot). In fact it was mostly about a particular software application called Trendsignal Plus that provides a range of indicators added to trading charts that are intended to help you know when to trade, i.e. to indicate when the market is just about to go up or down.

Forex Trading (Image: Sanandros/Wikimedia)
Forex Trading (Image: Sanandros/Wikimedia)

The agenda was as follows:

  • Charting techniques
  • Price patterns, trends and trade identification
  • The best markets and timeframes to trade
  • Effective use of trading platforms
  • How to manage risk and target exponential returns
  • Access to live trading workshops and introduction to the strategies used
  • Other opportunities with TrendSignal

Notwithstanding the focus on the particular software package, I found the content very interesting – and I’m a bit less sceptical than before I went about using tools to give you an ‘edge’ when trading. I have also since attended some online webinars that go into the details of trading using chart indicators.

Overall my interest in manual trading with Bitcoin and other crypto coins has been rejuvenated. While I will continue to do automated trading with Gunbot I am now actively learning about and implementing indicators on my own trading charts and will soon be testing the results to see if there is money to be made in manual trading this way.

I’ll report back on my results here as usual.

Gunbot Crypto Trading 5: Emotionless Trading

Previous posts:

Trading So Far

The situation as we left it in my last post is that Gunbot had made 3 complete buy-sell trades of 0.002 BTC each using the ‘Emotionless’ strategy. It had then bought again, and hadn’t seemed to be able to sell again that day. In fact early the following day it did manage to sell, and then later that morning it bought and sold again quickly. Each trade was, naturally, profit making, though only to the tune of about 10p.

Emboldened by this I increased the stake for each trade to 0.005 BTC (about £33). Gunbot soon did another Ether trade, for a profit of about 27p, so a healthy gain of about 0.8%.

I was impatient to see more trades and profits at this point, so I increased the stake to 0.01 BTC and added further coin pairs:

  • Bitcoin – Bitcoin Cash (BCH)
  • Bitcoin – Litecoin (LTC)
  • Bitcoin – Ethereum Classic (ETC)
  • Bitcoin – Dash (DASH)
  • Bitcoin – Ripple (XRP)

This naturally increased the transaction volume, here’s what’s happened since:

Poloniex Trade History: Gunbot trading Ether with Emotionless Strategy - more coins (Image: BIUK)
Poloniex Trade History: Gunbot trading Ether with Emotionless Strategy – more coins (Image: BIUK)

In a nutshell, Ether trading has continued solidly but Gunbot has also regularly bought and sold Litecoin, and Ethereum Classic, and also made single completed trades with Dash and Ripple. Bitcoin Cash is nowhere to be seen.

Profits so far, in Bitcoin:

  • Ethereum: 0.00059094
  • Litecoin: 0.00032900
  • Ethereum Classic: 0.00032669
  • Dash: 0.00007898
  • Ripple: 0.00013795
  • Total: 0.00146356 (about £10)

So not a bad start having been out of bot trading for some time.

Advanced Trading

One thing I like very much about the latest Gunbot is the charts in the user interface – they pretty much reproduce what you get in Poloniex or Trading View with the addition of clear markers of where Gunbot bought and sold.

Gunbot chart with buy/sell indicators (Image: BIUK)
Gunbot chart with buy/sell indicators (Image: BIUK)

What this highlighted for me, though, was that the Emotionless strategy is a bit ‘literal’. What I mean is that Gunbot is selling once it achieves the profit it has been set but is missing opportunities for greater profit. For example, in the middle of the screenshot shown we can see that Gunbot sold even though the market was rising fast and if it had waited a couple more minutes the profit would have been many times greater (perhaps even 10x).

I believe this consideration of trend is part of other strategies, particularly those using Trading Stop / Stop Limit (TSSL) which wasn’t an option in my previous Gunbot version. I’m therefore going to investigate that further before changing any more Gunbot settings, in particular increasing the trading stakes.

Gunbot Crypto Trading 4: Your First Gunbot Trade

Previous posts:

Strategy

After my previous post, creating my first Gunbot Setup in this version of Gunbot using the Bollinger Band strategy, I had a change of heart. I decided to try the Emotionless strategy instead, something I don’t remember being an option in my previously installed versions.

Emotionless is described on the Wiki as follows:

“The Emotionless strategy is fully tuned and ready to use, even for novice traders! It’s meant to be a relatively safe strategy, with modest but steady gains.

“With this strategy, you don’t need to think about setting the right or best parameters: it’s all there already. You only need to set the basics like your trading limit and choose on which pairs you want to trade. Optionally, you can increase GAIN slightly.

“Behind the scenes, an advanced algorithm based on the Ichimoku cloud indicator does the hard work. The specifics will not be disclosed.”

Given I haven’t used Gunbot seriously in many months this seemed like a good bet. I cancelled the run and restarted it with the strategy set to Emotionless. I kept all other settings the same.

Trading

I then went to bed, and didn’t check the results until the next morning. Success! Gunbot had bought some Ether and sold it again at a higher price during the night.

I suspect you won’t be impressed if I say the profit made was just 0.00001482 BTC (worth about 10p) but that is to miss the point. The stake, remember, was just 0.002 BTC (£13) and the setting for GAIN is 0.6, i.e. aim to make a profit of 0.6%. In fact the profit is 0.74% so the bot has done really well.

Of course, once you have gained confidence that the bot is working then you naturally increase the stake. If it were set to 1 Bitcoin, for example, then each trade would make a profit of about £50 and you could get multiple trades in one day. 10 BTC would make you £500 per trade, and so on.

In this case I left the bot running unchanged and it has now made 3 complete trades (for a total profit of 2.25%). In any other field such a gain in 2 days would be unprecedented.

Here’s the record of transactions so far:

Poloniex Trade History: Gunbot trading Ether with Emotionless Strategy (Image: BIUK)
Poloniex Trade History: Gunbot trading Ether with Emotionless Strategy (Image: BIUK)

Note that the bot has since gone on to buy again, but has not yet sold. It will be interesting to see if it sells successfully or if the market drops and it’s left holding Ether it can’t sell – I’ll report back once the outcome is clear.

Update: Gunbot Crypto Trading 5: Emotionless Trading

Gunbot Crypto Trading 3: Your First Gunbot Setup

Previous posts:

Initial Setup

Click on Create my first setup. For Setup Name I use the name of the exchange, also select the exchange in the Exchange dropdown. The pair of coins to trade is nearly always Bitcoin and another coin, both specified by their common abbreviation. I’m starting with Bitcoin trading against Ether, so I enter BTC-ETH. The strategy I choose is bb (‘Bollinger Band‘) because it’s the one I’m most experienced with – though I plan to try out others very soon.

Setup with a new trading pair (Image: BIUK)
Setup with a new trading pair (Image: BIUK)

Click Add pair. The new pair will appear as a tab in the lower window, with settings on the left and a Trading View window on the right. Repeat the process if you want to add more trading pairs.

A new trading pair added (Image: BIUK)
A new trading pair added (Image: BIUK)

Click Create. You’ll get a message “Setup created! Go to the dashboard to preview and run your setup.” Click on Go to dashboard.

 

Preview and Run

You are now in the preview screen – here you can check all the settings for the setup by clicking on the triangle marker next to each set. I’ll accept the defaults, however you may want to review how much Gunbot will spend on each trade – for this go to the particular strategy you selected under strategies and review TRADING_LIMIT (this is the amount in Bitcoin). The default is 0.002 (currently about £13).

Preview screen (Image: BIUK)
Preview screen (Image: BIUK)

Click Run Gunbot. A gunthy.exe command window will open (allow it if asked by Windows Firewall). The trading pair tab will now contain a and a trading view window and a window showing real-time output from gunthy.exe (the actual Gunbot bot).

Gunbot running (Image: BIUK)
Gunbot running (Image: BIUK)

That’s it – Gunbot is up and running and ready to trade when the conditions are right. We’ll go over the details of the trading in future posts.

Next post: Gunbot Crypto Trading 4: Your First Gunbot Trade

Gunbot Crypto Trading 2: Installing Gunbot

I have previously described Gunbot and how it works, including how to prepare for using it. Here I cover installation and initial setup.

Installation

Download and unzip the most recent version of Gunbot from GitHub (obviously you will need to have paid for a license for it to work). I run the Windows version and have mine in a C:/Gunbot/Latest folder (and move older versions into other folders as they get replaced).

Gunbot folder and files (Image: BIUK)
Gunbot folder and files (Image: BIUK)

Double-click on gunthy-gui.exe to run the Gunbot user interface. If you get a message about needing to get something from the Windows store, cancel it. If you get a message from Windows Defender Firewall, Allow access.

You should have a Windows command window running that says “Gunthy GUI <version> running on http://localhost:5000″.

In a new brower tab (I recommend Chrome as the browser) type in the address “localhost:5000” and enter.

 

Gunbot User Interface

You should now see the Gunbot interface up and running – the first time it will take you to the Login screen.

Gunbot Login screen (Image: BIUK)
Gunbot Login screen (Image: BIUK)

If you don’t get that then you may need to open access to port 5000 through the Firewall – for more details see the official installation video.

Choose and enter a password, record it somewhere safe, then click on Create password. You are now in the main Gunbot dashboard.

Gunbot Dashboard after first login (Image: BIUK)
Gunbot Dashboard after first login (Image: BIUK)

Assuming you are a new user, and so don’t have an existing config file, select Start without import.

On the next screen, Settings/API Keys, enter the API Key and Secret for the exchange you want to use (I use Poloniex). I have previously covered the method to get an API key for the Bitfinex exchange, but it’s a very similar process on most exchanges.

Gunbot settings screen for API keys (Image: BIUK)
Gunbot settings screen for API keys (Image: BIUK)

With Master Key enabled, click Add. You should get the message “API Key sucessfully added!” and it should be shown in the table at the bottom of the screen.

Next post: Gunbot Crypto Trading 3: Your First Gunbot Setup