@ Interested folks who don't quite understand how Butter Bot does things:
![](https://ip.bitcointalk.org/?u=http%3A%2F%2Fs12.postimg.org%2F56w3s5wrh%2FUnderstanding_EMA.png&t=665&c=4JBiPTT02eLYDQ)
If you look at the above graph, this is how EMA values are read by the bot at 1 hour or 2 hour intervals.
If you look at the first arrow in orange, it shows that EMA (and butterbot) works by measuring deviations from two different EMA values and spits out a difference measurement. From this it generates a column called "DIFF". A negative (down trend) in red means that the deviation is downward, while a positive one in green is in a up trend.
If you look carefully, you'll notice that even though the deviation is growing, butter averages it out over whatever the update period is.
You can have a very large price drop and butter will show a proportion of change based on it's update frequency. A gradual price drop over a protracted period might not set off your threshold values! <--- important point Depending on your settings you will find that butter (can and does) report a "DIFF" of -0.2% at two VERY different price points even as the market continues to drop.
It is a deviation measurement as the numbers it is using are (EMA values) that change over time.
Sharp drops [depending on your update frequency] in a very short period of time register as a larger "DIFF". While long term drops register as a very small DIFF over a larger period of updates.
![](https://ip.bitcointalk.org/?u=http%3A%2F%2Fs7.postimg.org%2Fu2vz598zf%2FUnderstanding_EMA_1.png&t=665&c=1GqjXxLFYdkOeQ)
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A potential mistake you might make when using the bot is the following:
If you mistake the DIFF measurements as being based on price...you'd be setting up the bot in the wrong way.
So if you set a threshold value (for either buy or sell) of a very large value, [1%+] then you are instructing the bot to only react when the DIFF value it measures has a very sudden change in market prices based on the two EMA values you have chosen. (NOT based on the price)
Your thresholds determine when the bot reacts. Larger values means the bot reacts at sudden changes between updates. The smaller thresholds describe smaller and more gradual corrections [up or down].
Butter bot treats all threshold values as positive numbers. <---- IMPORTANT POINT
Placing any negative number in the threshold does NOT mean the bot will look for price drops based on price. It will default to any DIFF larger than 0.
In other words, if you use -0.2 as a buy threshold, Butter bot treats the threshold value as "any DIFF number greater than 0". So you should use positive numbers instead in any of the 4 threshold settings which will not leave you confused as to what you wanted the bot to look for.
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If you are the type of person who is looking for sharp drops, you should change your update period to a shorter value. This will tell butter to update more frequently and make measurements often.
If you are the type of person who is looking for trends over many hours and days (or weeks) you should use a longer update interval. (1 hour or higher). Butter will then ignore any sharp drops and rises and focus on the long term EMA deviations.
Basically, a longer update period will cause butter to smooth out sudden changes in favor of long term changes.
Shorter update periods will allow butter to react to sudden moment-to-moment large deviations (drops and rises) with extreme sensitivity. But beware because it may pay attention to noise rather than trends.
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I would suggest (and only a suggestion) that if you are in a down market (as we are right now) you focus on trends. If we are in a uptrend market, then you might want to use a fast update period and high DIFF setting.