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59 lines
3.0 KiB
Markdown
59 lines
3.0 KiB
Markdown
# Freqtrade basics
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This page provides you some basic concepts on how Freqtrade works and operates.
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## Freqtrade terminology
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* Trade: Open position.
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* Open Order: Order which is currently placed on the exchange, and is not yet complete.
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* Pair: Tradable pair, usually in the format of Quote/Base (e.g. XRP/USDT).
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* Timeframe: Candle length to use (e.g. `"5m"`, `"1h"`, ...).
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* Indicators: Technical indicators (SMA, EMA, RSI, ...).
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* Limit order: Limit orders which execute at the defined limit price or better.
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* Market order: Guaranteed to fill, may move price depending on the order size.
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## Fee handling
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All profit calculations of Freqtrade include fees. For Backtesting / Hyperopt / Dry-run modes, the exchange default fee is used (lowest tier on the exchange). For live operations, fees are used as applied by the exchange (this includes BNB rebates etc.).
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## Bot execution logic
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Starting freqtrade in dry-run or live mode (using `freqtrade trade`) will start the bot and start the bot iteration loop.
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By default, loop runs every few seconds (`internals.process_throttle_secs`) and does roughly the following in the following sequence:
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* Fetch open trades from persistence.
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* Calculate current list of tradable pairs.
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* Download ohlcv data for the pairlist including all [informative pairs](strategy-customization.md#get-data-for-non-tradeable-pairs)
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This step is only executed once per Candle to avoid unnecessary network traffic.
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* Call `bot_loop_start()` strategy callback.
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* Analyze strategy per pair.
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* Call `populate_indicators()`
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* Call `populate_buy_trend()`
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* Call `populate_sell_trend()`
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* Check timeouts for open orders.
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* Calls `check_buy_timeout()` strategy callback for open buy orders.
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* Calls `check_sell_timeout()` strategy callback for open sell orders.
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* Verifies existing positions and eventually places sell orders.
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* Considers stoploss, ROI and sell-signal.
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* Determine sell-price based on `ask_strategy` configuration setting.
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* Before a sell order is placed, `confirm_trade_exit()` strategy callback is called.
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* Check if trade-slots are still available (if `max_open_trades` is reached).
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* Verifies buy signal trying to enter new positions.
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* Determine buy-price based on `bid_strategy` configuration setting.
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* Before a buy order is placed, `confirm_trade_entry()` strategy callback is called.
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This loop will be repeated again and again until the bot is stopped.
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## Backtesting / Hyperopt execution logic
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[backtesting](backtesting.md) or [hyperopt](hyperopt.md) do only part of the above logic, since most of the trading operations are fully simulated.
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* Load historic data for configured pairlist.
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* Calculate indicators (calls `populate_indicators()`).
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* Calls `populate_buy_trend()` and `populate_sell_trend()`
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* Loops per candle simulating entry and exit points.
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* Generate backtest report output
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!!! Note
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Both Backtesting and Hyperopt include exchange default Fees in the calculation. Custom fees can be passed to backtesting / hyperopt by specifying the `--fee` argument.
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