Top 5 Bot Setup Mistakes That Kill Your Profit

The cryptocurrency market is an aggressive environment. Previously, access to sophisticated automation capable of eliminating human weaknesses (fear, greed, fatigue) was available only to large hedge funds and institutional investors. Today, the situation has changed.

Veles.Finance has democratized technology. Now, retail investors hold a toolkit comparable to professional terminals in their hands. However, this is not just a “magic button,” but a complex system for multi-strategies, deep backtesting, and integration with top exchanges.

We analyzed thousands of support tickets and identified five fundamental mistakes traders make. This is a study of cause-and-effect relationships, risk mathematics, and psychological traps.

The Engine of the System: How DCA and Martingale Work

Before analyzing the mistakes, let’s look under the hood. Veles algorithms are based on two concepts: Dollar Cost Averaging (DCA) and Martingale.

In classic trading, you try to guess the entry point. Veles bots proceed from a different premise: it is impossible to predict the market perfectly. Instead of a single trade, the algorithm plans a series. If the price goes against the position (drops after buying long), the bot buys more of the asset. This lowers the average entry price.

The logic is simple: when the average price decreases, the break-even point (Take Profit) needs to cover a shorter distance during a rebound to close the entire position in profit.

Martingale is a betting management system where the volume of each subsequent trade increases. In Veles, each averaging order is larger than the previous one. With a multiplier of 2.0, the grid looks like this: $10, $20, $40, $80.

This is how the bot pulls the exit price closer to the current market value. But here lies the root of the problem. Martingale creates an exponential growth of risk. A mistake in this parameter can lead to liquidation if greedy settings are applied.

Mistake #1: The Leverage Trap and the Illusion of Infinite Margin

The most destructive mistake is the incorrect use of leverage. In the hands of an inexperienced operator, it destroys a deposit faster than any external factors.

Beginners perceive leverage as a simple profit multiplier: “I’ll set 20x — I’ll earn 20 times more.” This is a fundamental misconception. In grid strategies, leverage works differently.

The task of a grid bot is to survive price movement against the position. Leverage determines how many buy orders the deposit can withstand.

• 1x Leverage: The liquidation price is zero (for long positions). You will lose money only if the asset completely depreciates to zero.
• 10x Leverage: The theoretical liquidation point is only 10% away from the entry.

The catastrophe scenario looks like this: You launch a bot on ETH/USDT with 20x leverage. Deposit: 1000 USDT. The market falls by 5%. The bot correctly executes 5 averaging orders. The position volume grows. Due to high leverage, the maintenance margin required by the exchange skyrockets.

At a 6% drop, free margin runs out. The position hangs with a huge loss, and the slightest downward movement triggers forced liquidation.

Choosing the margin type often becomes a systemic error:

1. Isolated Margin. Risk is limited to the funds allocated for a specific position. If the bot makes a mistake, only part of the deposit burns. The mistake here is allocating too small an amount with aggressive settings.
2. Cross Margin. The entire balance of the futures account secures the leverage. This allows sitting out deep drawdowns. The critical mistake is running multiple correlated bots (BTC, ETH, SOL in long) with high leverage. When the market falls, all bots simultaneously pull margin from the common pot.

We recommend a conservative approach:

• 1x-3x. Conservative Zone. The strategy withstands drawdowns of 30–50%.
• 5x-10x. Moderate Zone. Precise filters and Stop Loss are needed.
• 20x+. Extreme Risk Zone. The mathematical expectation of profit tends to zero.

High leverage does not increase the probability of winning; it compresses time. With 50x leverage, the market has minutes to go in your direction. With 3x leverage, you have weeks or months of safety margin. Veles bots have no emotions and patiently wait for an exit in profit.

Mistake #2: Geometric Greed

Configuring grid parameters is the art of balancing the desire to quickly exit a drawdown and the need to preserve money.

An aggressive Martingale multiplier brings the break-even price closer. It seems good: only a microscopic rebound is needed. But sometimes users set a multiplier of 1.8 or 2.0.

Let’s calculate: With a multiplier of 2.0, the tenth order will be 512 times larger than the first. For such a grid, you need more than $10,000 with a starting order of $10.

Suppose a trader launches a bot with a $1,000 deposit and settings for $10,000. During a fall, the bot places 3–4 orders and stops with an “insufficient margin” error. The most important, saving orders at the bottom simply do not execute.

Others fear missing out on profit and make the order step too dense (0.2%, 0.3%). At the slightest market rebound, the bot buys up the entire deposit. Liquidity is spent on a 2% range. If the market falls further — there will be nothing left to cover it.

Solution: Use logarithmic step distribution. This increases the distance between each subsequent order. The grid becomes “elastic,” stretching following the price drop. You catch the bottom and average down where necessary, rather than wasting resources on market noise.

Overlap is also important. This is the price range covered by the grid. The mistake is setting an overlap of 10–15% for altcoins. Meme coins easily make movements of 30–40% per day. A grid with a 15% overlap will be breached instantly. Analysis of successful cases shows: surviving settings have an overlap of 40%, 50%, or more with conservative multipliers.

Mistake #3: Trading Blindly — Ignoring Backtests or Overfitting

In business, no one launches a product without a prototype. In trading, many neglect tests. Ignoring the Backtest module in Veles is a critical mistake.

The mistake has two facets:

1. Lack of tests. Simply taking settings you like and launching them. What worked in a growing market will kill the deposit in a falling one.
2. Overfitting. Adjusting parameters to fit the past week for a beautiful PnL. The market is changeable.

A competent approach is to test the strategy in different phases: bull market, bear market, stagnation.

Do not look only at total income. The main indicator is Max Floating Loss (Drawdown). If the test shows a 50% profit, but the drawdown reached 80%, are you ready to see such a minus on your account? Most likely, you will stop the bot manually at the very bottom.

A 3-day test makes no sense. Run the strategy for at least 3–6 months to capture different volatility states.

Checklist for a healthy backtest:

• Max Floating Loss < 20–30%.
• Even distribution of trades.
• Zero liquidations. The deposit amount must be greater than the Max Floating Loss multiplied by leverage.
• Ratio of Income (Net) to Max Floating Loss > 1.5.

If you reached these indicators in the backtest, you can test on a deposit, starting with small amounts.

Mistake #4: Random Entry — Working with Filters

A Veles bot is an algorithmic strategy using complex signals. The mistake lies in refusing filters or combining them incorrectly.

The setting “Start immediately after deal closing” works great in a calm sideways market. The bot collects the spread like a market maker. But during pumps or dumps, this is death. Imagine: Bitcoin drops like a stone. Your long bot closed a trade by stop loss and… immediately opened a new one because the setting is on, catching a falling knife.

Use filters (RSI, CCI, Bollinger Bands) so the bot waits for optimal conditions. For example, enter long only when RSI < 30.

There is another mistake. We offer more than 20 indicators, and users sometimes create multiple filters. The mistake here is a pile-up of contradictions. Example: RSI > 70 (upward impulse) and Price < Bollinger Bands (return to the mean). These conditions almost never occur simultaneously. The bot will remain silent for weeks, and you will decide that the platform is broken.

Distinguish the nature of indicators. Oscillators are good for flat markets. Trend indicators (MA, MACD) are for movements. Attempting to short against a strong trend (when MAs are looking up) is a path to liquidation.

Advanced users combine them: “Enter long on a pullback (RSI < 40), BUT only if we are in a global uptrend (Price > EMA 200).” This is the gold standard.

Mistake #5: Psychological Failure — The “Panic Button”

The human factor is always the weak link in any automated system. Interfering with the algorithm’s work at critical moments often causes harm.

There are two commands in Veles, and confusing them costs money:

1. Stop the bot. The bot stops opening new trades but accompanies the current one to the end. Standard completion.
2. Cancel. Emergency reset. The bot deletes orders and “forgets” about the deal.

Seeing red numbers, a user in panic hits “Cancel.” The bot removes take-profits and insurance orders. The position remains “naked” on the exchange. You are left alone with a loss without an exit plan.

Some buy coins manually through the exchange, trying to improve the average. But Veles takes into account only its own orders. Manual intervention disrupts the math. The bot will incorrectly calculate the volume for closing. As a result, when the target is reached, it will sell only the part it knows about, and “dust” (remnants) will remain on the account.

Greed (high leverage) → Fear (20% drawdown) → Panic (manual closing in minus) → Regret (market turned around).

Trust the math. If you conducted backtests and configured risk management, let the bot play out the scenario.

Veles.Finance offers functions to minimize risks

Using these tools distinguishes pros:

• Multi-Take Profit. Break the position exit into parts. Close 50% of the volume at +0.5% profit, then 30% at +1.0%, etc. The first take triggers quickly, offloading the position and reducing psychological pressure.
• Stop Loss to Breakeven. In combination with Multi-Takes, this is excellent protection. As soon as the first take triggers, Veles moves the Stop Loss for the rest of the position to the entry level. The trade becomes risk-free. Even if the market crashes, you will exit at zero.
• Trailing Stop. A tool for the smart and greedy. Allows not limiting profit. If the price flies vertically upward, the trailing stop follows it. The trade will close only upon a reversal by a set percentage. This way, you can capture movements of 10–20% in one trade.
• Marketplace of Strategies. For those unsure of their abilities. There, ready-made configurations from verified authors with transparent statistics are collected. This is a great way to learn: copy a successful bot, analyze its settings, and understand the author’s logic.

Conclusion: From Intuition to System

Algorithmic trading on Veles.Finance is the evolution of a trader. A transition from chaotic emotions to a system that accounts for all risks and potential profitability. But the bot is just a tool. It will not fix fundamental mistakes in capital management.

Leverage must correspond to volatility, not ambitions. The grid of orders must account for the worst-case scenario. Backtests are your mandatory virtual training.

Eliminating these five mistakes does not guarantee the absence of losing trades — that is only part of it. But it guarantees that losses become controllable and do not lead to collapse. Veles provides the technology: from logarithmic grids to protection via breakeven. Your task is to virtuously master this arsenal.

Integrate this knowledge with the platform’s functionality, and you will create a flow capable of generating profit in any conditions.