Tuesday, June 28, 2022

What Are Crypto Trading Bots

Handy Portfolio Management Tools Too

Pionex Tutorial: Crypto Trading bots made easy!

Exchange Valet also allows you to keep an eye on all your positions, and rebalance them almost automatically. The platform will display all of your crypto holdings on a pie chart, and allow you to buy a specific percentage of your portfolios total value in a single crypto.

Lets say you want to hold 40% of your total portfolios value in ETH. Exchange Valet will give you a simple input field that will let you buy whatever percentage of any crypto that you like. This is an easy way to make sure you maintain the balance of cryptos that you like, without doing a ton of work.

Exchange Valet also has solid communication tools. All of your orders can be delivered via Telegram , and other information will be emailed to you if you like. Portfolio info can also be delivered with Telegram, or by using the platforms proprietary chatbot.

Preparing A Comprehensive Project Plan

Success in this project requires effective planning. Your project planning needs to cover various aspects, e.g.:

  • Managing the business and non-functional requirements
  • Choosing the right SDLC methodology
  • Creating the project schedule
  • Planning key aspects like risk management, communications management, quality management, etc.
  • Hiring and onboarding the right developers
  • Metrics and measurements
  • Stakeholder management.

Should You Use A Crypto Trading Bot

Cryptocurrencies are a nascent and atypical asset class and for this reason it is hard to make a regular return off of them in the same way that cash or a stock create value. Many of the best stocks pay out dividends which is in addition to price appreciation main wealth creation mechanism from them. There isnt really an analogue for this in the crypto market, unless crypto owners lease out their cryptos to derive an income from their holdings.

Or you can hoard staking coins and participate in the network maintenance as a block producer or at least, delegate voter.

Trading bots represent the other option for passive income earning in crypto industry even though, as we emphasized earlier, they are not completely hands off and to require monitoring and manual interventions.

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Live Trader Offers A Lot

The first thing to notice about Live Trader is the number of exchanges that it will function with. Instead of being limited by your trading bot, Live Trader gives you numerous choices for an exchange. It also allows you to run multiple trading strategies at the same time, depending on which plan you decide to purchase.

While Live Trader is a pay-only service, it does offer a limited free trial so you can learn more about what you would be buying if you sign-up. The basic plan allows you to run one strategy, the mid-level plan gives you five simulations strategies, and the top-level plan that gives you 1000 bots to choose from will let you run 10 of them at once!

If you are wondering about pricing, the base plan costs $15 USD per month, the mid-level plan costs $39 USD per month, and the top-level plan will run you $79 USD per month. Given that Live Trader takes care of all the hosting, the rates it charges arent unreasonable.

What Are The Best Binance Trading Bots

Why Crypto Trading Bots Are Becoming So Popular

If youre Looking for the best Binance trading bots as a beginner, you can start by using CryptoHopper, Bitsgap, 3Commas, etc. Furthermore, if you like having complete control over your trading bots, Quadency or HaasOnline can be a perfect choice. However, you should only use HaasOnline when you have a basic idea of using HassScript, their coding language, to configure the automated bot.

Also Check: What To Look For In Crypto

Automated Crypto Trading Bots Worth Your Attention

Many traders are facing the difficult task of choosing software for analyzing the cryptocurrency market data. The number of options is growing, so we wanted to simplify this task for you. Below is the continuation of our list of trading bots along with the breakdown of their main features, pricing, pros, and cons.

Stop Loss And Take Profit With Trailing

Trailing stop loss can save you from a lot of losses, as it allows you to rake in some profits even if your trading position doesnt quite make it to your profit target. It can be seen as a safety net.

For instance, lets say that you have an arm trailing stop-loss set to 3% and a trailing stop-loss percentage set to 1%. If your trade moved to +3.5% at its highest and then dropped by 1%, the bot will sell it at +2.5%. Now you have made a 2.5% profit, rather than taking a loss if it had dropped any further.

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Do Crypto Trading Bots Really Work

In a word: Yes!

Just consider the fact that Wall Street firms have been using algorithmic trading for years. In fact, within the past decade, algorithmic trading bots has overtaken the entire financial industry, with algorithms now responsible for most of the trading activity on Wall Street.

The question, then, isnât whether they work, but rather how well they work. And their effectiveness largely depends on a number of factors, including the platform and bots that you choose as well as your levels of expertise and experience.

Crypto trading bots arenât an instant path to success, though. Theyâre automated, but not automatic. In order to trade profitably, traders must understand that the process of creating a good bot takes clear goals, patience, and knowledge as well as a certain degree of trust, which is why itâs crucial to avoid one-size-fits-all bots from unknown sources.

The Limitations Of Crypto Trading Bots

I Built A Crypto Trading Bot And Gave It $1000 To Trade!

Every crypto trading bot, regardless of how advanced it may be, will have inherent limitations. Also, keep in mind that not all bots are created equal. Bots may come with a steep learning curve.

Your starting configuration, with settings provided by the bots, may not make you money. In addition, it takes repeated testing in order to be effective. If the trading algorithms, strategies and signals youre using are widely available, their ability to turn a profit quickly diminishes as more people use them. It takes fresh algorithms, customized strategies and new trading configurations for each bot to try to beat the market.

You also need significant comfort with your crypto trading bot. A poorly designed, inaccurate trading bot can result in heavy losses, especially if it can execute a large number of trades quickly. Even a single bug in the source code can be painful.

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Is Automated Trading Profitable

A crypto trading bot can be profitable when used carefully and under the right circumstances.

When placing large volumes of orders over a short time span, it becomes possible to rack up profits by squeezing out small gains on each trade. Of course, losses could quickly mount as well.

Perhaps one of the biggest benefits of a crypto trading bot is that it takes the emotion out of trading. Greed and fear can harm a portfolio and even the economy.

When things go up, investors tend to get greedy, and this can make them biased to the point that they might miss changing market conditions until its too late to take profits.

Using a crypto trading bot doesnt work in set it and forget it fashion.

When things go down, investors tend to get fearful, and they might make bad decisions while in a state of panic, like selling at the bottom of a downtrend.

However, using a crypto trading bot doesnt work in set it and forget it fashion. To begin, a trading bot strategy will be needed. On top of that, it could be wise to consider the fact that markets dont always trade on technical analysis alone.

Bots arent capable of recognizing fundamental market forces like big news headlines or rumors .

Worth Learning More About

If you prefer to trade your own account, Exchange Valet could be a great tool for you. While it does lack algo-based trading features, it does offer traders all the tools they would find on a conventional trading platform.

Exchange Valet takes your security seriously, which is great to see. The communication tools that Exchange Valet built are also useful. If you are looking for a platform that fills in the gaps that exchanges left open, Exchange Valet is worth a deeper look!

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Programming The Cryptohopper Bot

As with the majority of crypto trading robots, bots can only be as good as the individuals programming them. This means that, because the bot is pre-programmed to follow specific rules in pre-determined conditions, a weak strategy will almost certainly cause losses. In terms of design, the way these crypto trading robots work is actually pretty similar to the IF-THEN function found in Microsoft Excel. The IF component of the equation is the market trigger, whereas the THEN is what the automated bot should do when the trigger is activated.

For instance, lets assume that the market trigger is Bitcoin breaking 50k. To be certain that the pricing target is broken convincingly, a user could set the market trigger at $50,100, which would activate the IF element of the equation. A trader would then need to pre-program the bot to execute a specific trade at this level, representing the THEN component of the equation. This not only enables traders to better gauge the potential direction of the market but it actually gives them an extra layer of confidence and security. This is because, quite frankly, no one really wants to end up like this guy here below!

Image via

Are Crypto Trading Bots Profitable

Best Crypto Trading Bots 2020

Now, admittedly I havent gone out and tested a bunch of bots yet however we can turn to our good friends over on reddit and other blogs to see what the consensus is from those that have used bots available on the market.

All commercial bots Ive tried lost money compared to buy and hold, no matter what settings were tried. intertron

If bots worked everyone would use them. This does not discount the private bots used by BlackRock and other massive trading firms. We will never have access to the data and teams of devs that they do. vibrate

It is safe to say that the best bots are the ones you never hear about and will never be offered. Kai Sedgwick via Coin Trellis

Its a good way to lose all your money.if people here dont know what they are doing in the market I wouldnt expect them to be able to set up so it is useful. Person51389

This is unfortunately where the reality of the current trading bots kicks in.

Algorithmic trading can be extremely profitable.

However,

The problem really is that theres just a huge level of disconnect between the knowledge base of professional investors vs the hackers that build these sorts of algorithms and then make them available to the public.

The fact that so many public-facing forums still tout technical analysis as a viable investing tool gives you a small glimpse into the extent of the problem.

And dont even get me started about overfitting.

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What Exactly Are Crypto Trading Bots Anyway

Cryptocurrency trading bots are computer programs that automagically buy and sell various cryptocurrencies at the right time with the goal of generating a profit.

Thats literally it.

Its important to note here that not every bot is profitable, in fact, most arent.

It is trivial to make a working bot, less so to have a profitable one. @pdesgrippes

Ideally the bots actually generate a profit and ideally that profit is greater in risk-adjusted terms than had you have just bought the same coins and held them throughout.

When I say risk-adjusted, what I mean is that your positive gains relative to the negative gains youve suffered whilst being invested is better. To demonstrate this have a think about the following,

Which would you rather have:

  • Daily returns of 1% every single day with zero negative days, with a total return across the year of 250%.
  • Returns of +10% Monday, -5% Tuesday, +3% Wednesday with a total return across the year of 500%.
  • Hopefully you picked the first one.

    See,

    The first example is consistent. And when something is consistent it becomes a lot less risky.

    In fact, you should still prefer the consistent returns of the first example even if the second one ended up at 1000% over the course of the year.

    Hint, the key is in compounding: 1.01² 1 = 1103%. This is really outside the scope of this article though.

    High returns isnt enough, you want high risk-adjusted returns.

    What Is A Crypto Trading Bot And How Does It Work

    On Wall Street, the saying goes Money Never Sleeps, which became an Oliver Stone movie title. Bankers figure that money never sleeps because somewhere around the world, you can always make a deal and at least one type of market is often open and trading. That being said, most financial institutions and markets are closed during nights and weekends.

    By contrast, cryptocurrencies trade around the clock, 365 days a year. Its biologically impossible for a trader to take advantage of every opportunity in the market. But its not technologically impossible. In fact, algorithmic trading plays a huge part in the global financial markets and the crypto markets are no different.

    Once configured, crypto trading bots take over most of the work, seizing opportunities as they arise in the rapidly evolving crypto market. Automated trading leaves no room for guesswork, executing trades with fixed parameters while minimizing execution risk. However, an inaccurate crypto trading bot could also cause heavy losses.

    Today, well be taking you through the types of crypto trading bots, highlighting pros and cons, and breaking down a few of the many crypto trading bots on the market.

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    What Are The Best Kucoin Trading Bots

    KuCoin, one of the best crypto exchange platforms provides in-house KuCoin bots. You do not need a third party trading robot provider that needs API keys and a montly subscription. Furthermore, this KuCoin bot is entirely free to use for traders. You also do not have any KuCoin fees on the automated GRID bot. You can read our article to learn more about KuCoin trading bot.

    Creating A Robust Development Approach

    Crypto Trading Bots: Are They Worth It?

    You need a sound approach when you undertake a software development project, and thats true for developing a crypto trading bot too. Your development approach should cover the following:

    • Identifying the appropriate technology stack to use
    • Choosing the right set of open-source tools and frameworks
    • Identifying the appropriate cloud platform
    • Formulating the right application security solutions

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    When Should You Use Crypto Trading Bots

    A well-executed bot can conduct many functions for you like portfolio management, rebalancing, smart order routing, data collection, etc.

    Here are the points you should exactly improve with trading bots:

    • Repetitive Tasks: Repetitive tasks takes a lot of time and effort. A good automated Crypto trading bot helps you to virtually copy and paste a specific task to conduct trade with no hassle. One of the good ways where bots can help with repetition is in periodic rebalances.

    In case if you have to conduct hourly rebalances, then you will get two options:

  • Set the alarm every hour in order to rebalance your portfolio.
  • Create a program and trading bot to rebalance the portfolio every hour.
    • Timing: Timing accuracy is important for trading. If you want to sell your currency, then it is good to observe the price carefully. Here, the bot can monitor the market and execute a trade at the correct time.
    • Complications can be simplified: In crypto trading, every single exchange pair should be carefully determined as per its asset quantity and trading price.The entire route needs to be finished within a specific time and the condition of the market. A wisely chosen trading bot can help you to automate complicated and impossible strategies with ease.

    Top Crypto Trading Bots: The Principle Of Work

    More and more crypto traders enjoy benefits from using crypto trading bots. But there are still those who have a skeptical attitude toward bots because they dont have a clear understanding of bots work. You can get it a try by making a few simple steps. Its very important to choose a bot with a flawless reputation. For this, go to the Safetrading platform and check the rating of bots. Youll learn more about trading bots and will be able to choose the best crypto trading bots. Each of them appears on the list of the Safetrading the place where each bot is checked carefully. You can be sure that they are approved. This means that you wont be scammed. Dont use an unknown trading app as it can transfer your money to its founder.

    If you use a trusted Bitcoin trading bot, you should just provide the necessary information for it to open and close deals for you. Its also possible to enable an auto trading regimen. Its best to save time and effort. Most traders combine their crypto trading career with a permanent job. It can be a good additional source of income for you. You can choose the best trading bot on the Safetrading website and be sure that it will use reliable crypto trading signals. Crypto calls are provided by professional traders for your maximum convenience.

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    Access To Advanced Market Analysis

    Because crypto bots run on computers, they can carry out a series of complex calculations incredibly quickly. Among these complex calculations are certain types of market analysis that can provide predictive insight into market trends. Crypto bots make use of some of these to deliver better results.

    These analyses include some that have been used in stock and forex markets for decades. Bollinger Bands rely on a moving average to generate upper and lower bands to quantify volatility. Basically, its a way of looking at the constant fluctuations in crypto price to determine if its normal or if something strange is happening.

    The bots can also rely on a Fibonacci retracement, ratios that connect relative highs and lows in order to predict future trends. Stochastic oscillators for cryptocurrencies can evaluate current price vs. historical prices to tell if its been overbought or oversold. There are many more indicators that crypto bots can incorporate into their strategies, and they can calculate them far faster than any human trader.

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