📘 Freqtrade config.json Basics & Initialization

Before using Freqtrade for strategy backtesting, data downloading, or live trading, the most crucial step is to create and configure the config.json file. It serves as the “main command center” of the entire trading framework, determining which exchange to connect, how to trade, how strategies run, and how funds are allocated.

This guide explains the purpose, creation, structure, and editing tips for config.json, helping you get started quickly and avoid common pitfalls.

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🧱 What is config.json?

config.json is the main configuration file for Freqtrade, centralizing all runtime parameters:

• Exchange account info (API Key / Secret / Password)
• Trading coins and amount settings
• Strategy rules (e.g., maximum open trades, long/short settings)
• Data timeframes and backtesting settings
• Limit / market order control
• Risk management settings (stop-loss, take-profit, slippage)
• Optional notification channels (Webhook, Telegram, etc.)

No matter if you are doing data analysis, backtesting, or live deployment, this file is indispensable.

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🆕 How to generate config.json

Freqtrade provides a CLI tool to quickly generate a default template, ideal for beginners:

freqtrade new-config --config user_data/config.json

Notes:

• --config specifies the target path (official recommendation: user_data/config.json)
• If the directory does not exist, it will be automatically created
• After generation, you can edit it with any text editor

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📂 Recommended project structure

Recommended folder layout:

freqtrade/
├── user_data/
│   ├── config.json         ← ✅ main config file
│   ├── strategies/         ← strategy scripts (.py)
│   ├── logs/               ← log outputs
│   └── ...
├── freqtrade/              ← Freqtrade core code / virtual environment

Keeping config.json inside user_data/ ensures consistent paths and easier backups.

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🐳 Docker folder structure

When using Docker, the directory is controlled via volume mapping:

ft_userdata/
├── user_data/
│   ├── config.json         ← ✅ main config file
│   ├── strategies/         ← strategy scripts
│   ├── hyperopt/           ← hyperopt results
│   ├── logs/               ← log outputs
│   └── ...
├── docker-compose.yml      ← Docker service entry

You can modify user_data/config.json to adjust runtime parameters without rebuilding the Docker image.

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🔍 Beginner example

Basic config.json snippet:

{
  "max_open_trades": 3,
  "stake_currency": "USDT",
  "stake_amount": 100,
  "tradable_balance_ratio": 0.95,
  "dry_run": true,
  "exchange": {
    "name": "binance",
    "key": "your_api_key",
    "secret": "your_api_secret",
    "password": "your_api_password"  // required by some exchanges, e.g., OKX, Kraken
  }
}

Field explanations:

• max_open_trades: Maximum simultaneous open positions
• stake_currency: Base trading currency (e.g., USDT)
• stake_amount: Amount used per trade
• dry_run: Enable simulated trading (true = no real funds used)

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🛠️ Editing & debugging tips

1. Check if the exchange API is valid:

freqtrade list-markets --config user_data/config.json

API Key Configured	list-markets works?	Can trade?	Notes
✅ Yes	✅ Yes	✅ Yes	Full functionality, live trading possible
❌ No	✅ Depends on exchange	❌ No	Can only view market data

2. Initialize strategy check:

freqtrade backtesting --config user_data/config.json

This helps catch strategy or config errors before live trading.

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🧠 Summary

Key point	Recommendation
File name	Keep as config.json, recommended in user_data/
Generate command	freqtrade new-config --config path
Debugging	Use backtesting or list-markets to check
Version control	✅ Strongly recommend including config.json in Git

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This guide helps you initialize config.json, the foundation for running strategies, downloading data, and deploying to live trading.