The rise in the value of cryptocurrencies in 2017 has attracted many new players to the market looking to get rich quick. Some of them managed to make money, but most suffered losses. A bot for trading cryptographic currencies is a tool that, when applied systematically, will help to reduce risks and achieve a stable result.
What is CRYPTOBOT
A bot http://steroid.one/ for an exchange is a specialized computer program that performs repeated actions to purchase (sell) currency pairs according to an algorithm established by the developers. Robots are written with the aim of saving the trader from being constantly at the trading terminal and performing mechanical, routine work. Such programs will usually work around the clock even in the absence of a person.
Robots are great for high-speed operations. Modern automated trading programs can execute thousands of transactions per millisecond. Such software is indispensable for high-frequency trading, arbitrage operations on several exchanges, market making and other strategies that require a high speed of placing orders.
BOTA operating principles
The trader’s task is to find a pattern in the price movement of an exchange instrument. The most primitive ideas often work. In order to determine the profitability of the strategy, the trading bot is tested based on the price behavior in the past. Debugging the algorithm makes it possible to determine the ideal trading parameters using technical indicators.
The robot includes a mechanical trading system written in the form of a program code. When the specified parameters are fulfilled, it places an application for the purchase or sale of currency. After the transaction is completed, the program creates a counter order to close the transaction. In arbitrage operations, the bot simultaneously buys and sells cryptographic currencies on various exchanges.
Types of EXCHANGE BOTS
There are several variants of trading robots:
Trendy. Seeking to catch a big move in the market by trading in the direction of a key trend. Very often, various technical indicators are used for this purpose. The simplest strategy is based on the use of moving averages. The trade takes place when the most varied period averages cross. Similar bots perform well in trendy high volatility markets.
Counter-trend. The principle of their action is opposite to trend ones. They trade against a key trend based on technical indicator signals, support (resistance) levels and candlestick patterns. Oscillators are often used here to indicate that the market is overbought (oversold). These robots are perfect for range trading.
Arbitration. This is a special type of robots, the purpose of which is to make a profit on the difference in the rates of cryptographic currencies on various exchanges. The program monitors all available trading platforms looking for inefficiencies. Finding a profitable opportunity, the bot simultaneously places orders for the purchase and sale of one currency pair on various exchanges. Likewise, you can generate risk-free income, but you need to account for transaction costs.
Will the newcomers need
Many novice traders believe that by purchasing a good robot, they will consistently make money under any conditions, but everything is much more problematic. The market is a dynamic environment in which conditions change regularly. Thanks to this, no algorithm can regularly generate profit from month to month, even if it showed pleasant results in the past.
To make a stable income, you need to spend enough time and effort to study the market and search for new trading ideas. Automation in the right hands makes this task much easier. As a basis for your research, you can purchase or download a ready-made robot for free, but it is worth understanding the strategy on the basis of which the trading algorithm is built.
Some developers provide entire complexes for automating trading processes. They recommend a set of bots of various types that you can customize by yourself, setting the desired parameters based on technical indicators. For the development of their algorithms, scripts are offered to facilitate writing a program.