What is ByBit?
This centralized exchange is a new-age crypto company that ventures into different domains and tries to establish a good name for itself in many areas. For example, it sponsors several sporting organizations and e-sports teams including well-recognized teams like Astralis and Virtus Pro.
The exchange cannot offer its services to residents of the US and has tense relationships with regulators from Japan and Canada. However, it has a strong presence in Europe, Sub-Saharan Africa, the Middle East, and Asia. If you are interested in trading on a platform that focuses on advertising, interesting promotions, and tries to create a new culture, ByBit is a good choice.
In terms of digital assets, the company has a large catalogue of cryptocurrency pairs and derivatives. It offers sizeable x100 leverage to all its users and provides access to a variety of contracts including futures, perpetual futures, and options derived from Bitcoin, Ethereum, and Solana.
You can run multiple ByBit trading bots without any issues with the help of WunderTrading, a premium provider of automation services integrated with a large number of centralized exchanges including Binance, KuCoin, Coinbase, and ByBit.
Is ByBit safe?
The company has had some questionable periods in its history when its security was compromised. The US and Canadian authorities issued warnings regarding their personal data handling. In general, the company has a good track record and avoided huge scandals. Nevertheless, it is not fair to call this particular exchange safe.
We recommend all users follow reasonable safety protocols like enabling two-factor authentication, storing only a fraction of their portfolios on account balances, and using the platform for trading only.
The profit potential of ByBit
A noticeable advantage of the company is its strong focus on maintaining instant order execution and providing access to a wide range of financial instruments to all its clients. It is a good platform if you want to make money by trading and do not plan to store your assets in the account on the exchange.
The functional API allows users to effortlessly connect third-party vendors to ByBit which is excellent for people who want to deploy automated trading systems on the exchange and benefit from fast-paced order processing, high liquidity, and the abundance of potentially profitable financial instruments.
Whenever you are working with centralized crypto exchanges that had issues with regulators, it is a good idea to focus on risk management and never dedicate your whole portfolio to trading on this platform. On the other hand, you may be interested in using ByBit for risker endeavors like options trading and scalping.
Which bots are the best for ByBit?
The platform is excellent for any type of automation product. We will give you a couple of examples of bots that will benefit from working on ByBit.
- DCA bots. These robots are designed to use the “Distributed Cost Average” approach to either accumulate resources in your balance (with automatic “stop loss” and “take profit” options turned off) or make money by reducing the average price of market positions and exiting at an opportune moment. DCA is a popular approach among crypto enthusiasts who use it to gradually grow their portfolios.
- GRID bots. GRID is an advanced form of DCA buying. This bot will place a series of orders each accompanied by a unique “take profit” and “stop loss”. This method is great for people focused on day trading or attempting to automate a system close to scalping. GRID will work just like a scalping system if you reduce time frames.
- Arbitrage. Triangular arbitrage may not work well on ByBit, but you can run bots to monitor prices on multiple exchanges and include BTC/USDC or ETH/USDC pairs from ByBit. Due to the geographical separation of this exchange from platforms like Binance US or Coinbase, price discrepancies occur regularly and allow arbitrage bots to make money safely.
- Custom bots. This method will work for experienced retail traders who already use sophisticated technical analysis systems that generate signals and allow them to enter market positions that promise huge profits. These systems can be automated using bots from WunderTrading and the analytical platform TradingView.
How to create a custom bot
How to set up a bot on ByBit using WunderTrading? You can use the combination of ByBit API, TradingView, and WunderTrading to create a fully automatic bot that will trade on ByBit on your behalf. The process is quite simple:
- Go to the ByBit account management page and switch to the sub-account that will be used for trading.
- Go to “Account & Security” and click “Create API”. Follow the instructions.
- Copy the newly created API key and insert it in the WunderTrading form when connecting a new exchange account.
- Go to “My Bots” in the WunderTrading dashboard and create a new bot.
- If you want to automate an existing strategy, go to TradingView and deploy it on a price chart.
- Follow the instructions on the WunderTrading page to allow TradingView to send signals to the bot.
- Launch the bot and monitor its performance. You won’t need to provide other inputs if you don’t want to.
The best ByBit trading bot is the one that uses a consistent strategy that you will use on TradingView. There is a relatively simple way to pick a good strategy. Choose an interesting solution designed by a power user on the analytical platform. Read the discussions between users who tried it. Ask about the strategy on specialized subreddits and online forums. Pick something that other users consider great.
Any strategy can be easily integrated into your automated trading system running on the WunderTrading platform.
Creating the best trading bot for ByBit
This exchange is an excellent choice for people who are interested in trading Bitcoin, Ethereum, Solana, and their derivatives. Since the vast majority of traders choose this particular exchange for its margin account, you need to focus your attention on building a system that will be suited for dealing with derivatives.
If you do not want to use an overly complicated custom-made system from a power user on TradingView, you can work with time-tested methods. Here are some interesting strategies that you may find interesting:
- Relative Strength Index for predicting reversals. You can use RSI to forecast price retracements and trend reversals. The indicator is extremely easy to use. It is just a line that moves between 100 and 0. When the indicator goes up to a value close to 100, it means that the asset of overbought, and there could be an opportunity for a short market position. If the indicator closes on 0, the market is oversold and a bullish trend may form in the nearest future.
- 3MA or Three Moving Averages is a very old approach that uses, as the name suggests, three different MA indicators each with a unique period. Usually, retail traders tinker with numbers until they find a good combination that represents the price action change history better than anything else. You may use periods 14/9/6 or 16/8/4. The idea is that there must be three lines that have different degrees of smoothness. When they converge, the current trend is weakening. When they diverge, the trend is getting stronger.
- MACD (Moving Average Convergence Divergence) takes this concept to the next level and tries to predict reversals by overlapping the median value of three MA (the MACD line) and the signal line. Note that this indicator is notorious for producing many false positives that can skew the performance of an automated trading system if you do not use other indicators for confirmation.
If you want to deploy the best trading bot on ByBit, it may be a good idea to use a simple strategy that will have simple rules and instructions for the robot.
Should you use bot trading on ByBit?
This exchange is a good place to trade a wide range of derivatives. However, it is also not the safest platform in the world. Ultimately, you will decide whether it is a sound idea to continue trading on ByBit. If you plan to stick with the exchange or even expand your operation, using bots is a necessity.
Automation is used by all serious retail traders who want to focus on maximizing profits and efficiency for their investment endeavors. ByBit allows users to connect advanced trading tools to their accounts and facilitates competition between market participants. It is quite hard to outperform robots manually.
For safer trading techniques like DCA and GRID, you should use bots. It is also a good idea to automate a reliable technical analysis strategy. The crypto market never stops. It means that you will miss out on an opportunity to enter the market and make a profit when you are sleeping or resting. Bots operate around the clock and never skip a chance to place an order.
You should automate all low-risk strategies and consider automating any strategy that has a positive ratio of good signals to bad signals. Consider adding copy trading and arbitrage to the mist to further diversify your investments in the ByBit account.
In conclusion
A quick summary:
- This exchange offers a solid product lineup to all its clients and allows retail traders to interact with a rich selection of financial instruments and digital assets.
- You can connect WunderTrading directly to the exchange and automate any strategy that you consider efficient to optimize profits.
- ByBit has some problems with regulators and does not serve US citizens. It also received warnings from US, Canadian, and Japanese regulators.
- You should always think about safety when working with exchanges that do not have an excellent track record regarding security.
- Try limiting the amount of assets that you want to use on this exchange. This advice is especially relevant for US and Canadian citizens.
ByBit is a good exchange if you are interested in trading derivatives and supporting a company that focuses on sponsoring e-sports. It is also one of the best places to deploy bots from WunderTrading! Whether you like this exchange or not, it has some advantages that are hard to overlook. Functional API, a deep catalog of financial instruments, and responsive customer support make it a good choice for experienced veterans who know how to protect themselves from risks.