📘 Chapter 7: Whitelist and Blacklist Mechanism — Trade Only the Coins You Want

In the crypto market, trading pairs are abundant, but their quality varies greatly. Freqtrade provides the pair_whitelist and pair_blacklist mechanisms, allowing you to precisely select the coins you want to trade. This helps avoid trading “low-quality” or low-liquidity coins and improves strategy stability and safety.

These two parameters are flexible and practical, making them essential tools for every quantitative trader.

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🎯 One-Sentence Principle

Parameter	Function
pair_whitelist	Only allow trading of these pairs; all others are ignored
pair_blacklist	Prohibit trading of these pairs; all others are allowed (unless excluded by whitelist)

✅ If both are configured: Tradable pairs = pair_whitelist − pair_blacklist ❗ Ensure the pair format matches the exchange (e.g., "BTC/USDT").

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🧩 Configuration Structure

"exchange": {
  "pair_whitelist": [
    "BTC/USDT",
    "ETH/USDT",
    "SOL/USDT"
  ],
  "pair_blacklist": [
    "DOGE/USDT",
    "LUNC/USDT"
  ]
}

Field	Type	Description
pair_whitelist	Array	List of allowed trading pairs
pair_blacklist	Array	List of prohibited trading pairs; can be combined with whitelist

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✅ Common Use Cases

✅ 1. Precisely Control Trading Pairs (Trade Only Core Coins)

If you only want to trade major coins like Bitcoin or Ethereum:

"pair_whitelist": [
  "BTC/USDT",
  "ETH/USDT"
]

🔒 All other pairs will be ignored, ensuring the strategy focuses on highly liquid and widely accepted assets.

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✅ 2. Exclude Specific High-Risk Pairs

If you want to trade multiple coins but exclude volatile or problematic ones:

"pair_blacklist": [
  "SHIB/USDT",
  "LUNA/USDT"
]

✅ This prevents accidental exposure to high-risk coins.

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✅ 3. Dynamic Management with Automated Filtering

You can dynamically generate the whitelist or blacklist via external scripts based on:

• 24-hour trading volume ranking
• Market capitalization ranking
• Time since listing
• Regulatory risk, etc.

This enables smart coin selection + blacklist exclusion as a combined risk-control approach.

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🔁 Whitelist vs Blacklist: Detailed Comparison

Feature	pair_whitelist	pair_blacklist
Control Method	Only allow listed pairs	Exclude listed pairs; others are tradable
Purpose	Select high-quality targets, limit strategy scope	Broad trading while excluding risky coins
Flexibility	Low; must manually list all pairs	High; only maintain pairs to exclude
Recommended Scenario	Conservative strategies; backtesting aligned with live trading	Automated selection strategies or momentum strategies needing wide coverage

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📌 Combined Usage Recommendation

You can use both whitelist and blacklist for finer control:

"pair_whitelist": [
  "BTC/USDT",
  "ETH/USDT",
  "XRP/USDT"
],
"pair_blacklist": [
  "XRP/USDT"
]

👆 Final tradable pairs: BTC/USDT, ETH/USDT ❗ Coins in the blacklist (XRP/USDT) are excluded even if they appear in the whitelist.

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💡 Practical Tips & Techniques

1. Combine Dynamic Management

   • Whitelist: Use automated scripts to fetch top N coins by volume for trading
   • Blacklist: Manually maintain long-term problem coins (e.g., low liquidity, abandoned projects)

2. Regular Review

   • Check lists weekly or monthly to ensure they match current market conditions

3. Combine with Position Limits

   • If whitelist is broad, use max_open_trades to control open positions

4. Multi-Strategy Isolation

   • Each strategy can have its own coin range to avoid interference (recommend separate config.json files)

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🧠 Summary Checklist

Parameter	Description	Recommended Practice
pair_whitelist	Clearly allow specific trading pairs	Select high-quality pairs consistent with strategy targets
pair_blacklist	Clearly prohibit specific trading pairs	Exclude risky, volatile, or low-liquidity coins
Combined Use	whitelist − blacklist	Precisely control core targets while avoiding temporary high-risk coins

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By combining pair_whitelist and pair_blacklist, Freqtrade allows precise coin-level trading control, improving strategy stability and preventing losses due to low-quality pairs.

📌 Next time, no more excuses like “the strategy lost because it traded a weird coin.” Start with proper configuration!