Software Requirements Document (SRS)
Software Design Document (SDS)
Bybit Cryptocurrency Derivatives Trading Bot
The Bybit Cryptocurrency Derivatives Trading Bot (BCDTB) automates the trading of cryptocurrency derivatives on the Bybit exchange. This is done by regularly fetching OHLCV (Open, High, Low, Close, Volume) data directly from Bybit and generating buy/sell signals using a trading strategy1 based on technical analysis. This strategy uses three Supertrend instances, the 50_EMA, and 200_EMA to determine trend direction while using the Stochastic RSI for entries.
The Strategy
The 50_EMA and 200_EMA
The strategy implemented in the BCDTB determines the macro trend of the OHLCV data by looking at the two exponential moving averages. If the 50_EMA is above the 200_EMA, then the price is in a macro uptrend. If the 50_EMA is below the 200_EMA, then the price is in a macro downtrend. The BCDTB will only look for long positions when in a macro uptrend, otherwise it will look for short positions when the macro trend is down.
Supertrend
Three Supertrend2 instances are used to determine when a micro trend occurs in the same direction as the macro trend. The first supertrend is instantiated with (period=10, atr_multiplier=1), the second with (period=11, atr_multiplier=2), and the third with (period=12, atr_multiplier=3). If two supertrends are indicating the same direction as the EMAs, the BCDTB will look for entry signals from the Stochastic RSI.
Stochastic RSI
If the price is determined to be in both a macro and micro uptrend, a long position will be created when SD is below 20 and K is crossing up over D. Alternatively, if the price is determined to be in both a macro and micro downtrend, a short position is created when the SD is above 80 and K is crossing below D.
How to Use
Bybit Account
To use the BCDTB, the trader will need a Bybit account with cryptocurrency in their derivatives wallet. First they will have to deposit the cryptocurrency into the corresponding spot wallet, then transfer it into the derivatives wallet. If the cryptocurrency is anything other than USDT, they will be confined to trading that cryptocurrency only against USD (ex. BTC/USD, ETH/USD, etc.). If the trader would prefer to have fast access to a variety of trading pairs, it would be beneficial to exchange their cryptocurrency for USDT, which will trade against all available cryptocurrencies (ex. BTC/USDT, ETH/USDT, XRP/USDT, etc.).
Bybit API Key
Once the Trader’s Bybit account is set-up, they need to go into their account settings and generate an API Key. Give the API all permissions except for withdrawal. If the BCDTB is going to be running on a specific server with a static IP address, the Trader can restrict the API to only work with that IP address, which is more secure. If this is not the case, or the Trader is unsure, then give the API permission to run from anywhere. The Trader needs to pay attention and write the API secret down immediately after creating it, because it will only be displayed at that time.
Configure BCDTB Settings
Settings must be configured in a file named config.py, which is located in the settings folder of the project directory ( ~/BCDTB/settings/config.py ). Examples of how to do this are presented below.
Set API Key and Secret
API_KEY = 'your-api-key'
SECRET_KEY = 'your-api-secret'
Live Exchange or Testnet
If the API key is for the Bybit testnet, set SANDBOX to True. If using the Live exchange, set SANDBOX to False.
SANDBOX = True
Set Symbol
Go to https://www.bybit.com/data/markets/ for full list of available market symbols.
If the Trader only wants to trade one market, they should enter the SYMBOL as a string in quotes.
SYMBOL = 'BTC/USD'
If trading multiple SYMBOLs is desired, provide a list of strings.
SYMBOL = ['BTC/USD','ETH/USD']
If the Trader’s funds are in USDT, and they want to scan every cryptocurrency that pairs with USDT, just provide ‘USDT’ as a string.
SYMBOL = 'USDT'
Set Timeframe
Bybit makes OHLCV data of multiple timeframes available for setting TIME_FRAME with. A list of these and the string by which to reference them can be found below.
| Time Frame | Reference String |
|---|---|
| 1 Minute | ‘1m’ |
| 3 Minute | ‘3m’ |
| 5 Minute | ‘5m’ |
| 15 Minute | ‘15m’ |
| 30 Minute | ‘30m’ |
| 45 Minute | ‘45m’ |
| 1 Hour | ‘1h’ |
| 2 Hour | ‘2h’ |
| 4 Hour | ‘4h’ |
| 6 Hour | ‘6h’ |
| 12 Hour | ‘12h’ |
| 1 Day | ‘1d’ |
| 1 Week | ‘1w’ |
| 1 Month | ‘1M’ |
Below is an example of setting TIME_FRAME to 1 hour in config.py.
TIME_FRAME = '1h'
Set Position Amount
If it is desired to enter into every position with a specific dollar amount, then assign that value as an integer.
AMOUNT = 100
If it is desired to use a percentage of the available account, then assign the percentage as a string value in quotes.
AMOUNT = '30'
Leverage
Set LEVERAGE with an integer. For 5x leverage, set LEVERAGE to 5.
LEVERAGE = 5
Stoploss
STOPLOSS is set with percent as a decimal. If the Trader wants to restrict the risk on the position to 15 percent, they would assign .15, i.e., 15/100.
STOPLOSS = .15
Take Profit
TAKEPROFIT is set with percent as a decimal. If the Trader wants to take profit on the position when it reaches 35 percent, they would assign .35, i.e., 35/100.
TAKEPROFIT = .35
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At this time, there is only one strategy to choose from, but in the future I would like to add more options or make the code more modular so a trader can code a custom strategy as a class and drop it in the project directory. ↩
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Supertrend is a trend detecting indicator that uses two parameters, look-back period and multiplier. It consists of an upperband and lowerband. The upperband is calculated with the following:
BASIC_UPPER_BAND = (HIGH + LOW)/2 + (MULTIPLIER * AVERAGE_TRUE_RANGE) BASIC_LOWER_BAND = (HIGH + LOW)/2 - (MULTIPLIER * AVERAGE_TRUE_RANGE)
And AVERAGE_TRUE_RANGE is determined using the parameter passed in as the look-back period. ↩