Unleashing the Power of Trading Bots in Cryptocurrency Trading
When it comes to cryptocurrency trading, speed is often what decides the outcome of your trading endeavors. Traditional financial markets are often analyzed through the prism of fundamentals. Real capital investments, brand value, and many other important factors may come into play within decades and help investors make informed decisions calmly.
The crypto industry is wildly different. Most digital assets are speculative in nature providing ample opportunities for money making within short terms, but they also do not allow slow and methodical traders to reliably invest in the market. Sudden price collapses can significantly hurt your bottom line in the long run.
Working with shorter time frames seems to be the answer found by many retail traders who do not have large piles of cash to throw at every promising crypto. Scalpers and experienced day traders proficient in technical analysis throve in the cryptocurrency market for a long time. Now, they are often outsmarted by advanced crypto trading software which simply uses their tricks but faster.
Service provides such as WunderTrading provide the necessary technological platform for contemporary retail traders to lean on without ruining their finances. Affordable pricing and convenient products are the name of the game in the modern crypto market.
There are multiple reasons why trading bots succeeded as a product:
- The technology caught up to the demand. Just two decades ago, only institutional investors could afford using automated trading systems since they required not only good software but also expensive technological infrastructures. Modern systems are deployed in the cloud allowing end users to benefit from the expansion of the World Wide Web.
- Service-as-a-Service is a big thing. The latest trend in the software development industry is to turn everything into a SaaS product. While some end users believe that it makes it more expensive and less convenient for users while simultaneously pressuring everyone into using something that comes with the fanciest package, there is no denying that SaaS platforms often deliver excellent experience without forcing people to pay huge sums of money upfront. Modern automation vendors are all SaaS companies.
- Trading bots for cryptocurrencies were meant to be. The very concept of digital money favors the idea of implementing various advanced technologies like API-driven communications between various platforms and artificial intelligence. It just feels right. The crypto market is still growing uniting billions of people into an interconnected ecosystem that does not tolerate sluggish reaction from retail traders.
The Benefits of Using Trading Bots for Cryptocurrency Trading
The global cryptocurrency market value is expected to grow to over $50 billion by the end of 2024. The figure includes services from providers such as WunderTrading, TradingView, and other platforms from various industries-satellites. Contemporary crypto trading bots are a part of a much bigger ecosystem that now incorporates not only traditional automated trading systems but also sophisticated strategies, AI-driven tools, analytics, and more.
While you may think that buying a plan from an automation vendor is just your way to a slightly faster and more streamlined trading, the reality is that you can turn your whole investment strategy around by using novel products that are closely associated with bots.
Here are some advantages of using trading bots without any other complementary services:
- Staying active around the clock. When the market works 24/7 without any pauses, human traders often miss out on valuable opportunities due to being asleep or simply resting. Machines do not have any downtime. Aside from extremely rare server maintenance or downtime, bots never stop working.
- Affordability coupled with excellence. While it was quite expensive to run multiple trading bots just a couple of years ago, modern retail traders can set up a powerful statistical arbitrage system with dozens of active bots for a fraction of the price they would have paid in the 2010s. Crypto trading bots became cheaper and better. It is the most direct way to increase profit with bots.
- Time-saving crypto trading! Efficient retail traders using refined technical analysis strategies have to stay alert at all times. If only they could automate some of their actions to free up some time to spend on leisure activities, family, and friends… Contemporary automation systems allow you to save a lot of time!
- Unseen sophistication. You can create advanced automated trading systems that previously required large teams of professionals to run. For example, a massive portfolio managed by a statistical arbitrage approach usually employs dozens of retail traders coordinating their market positions. Now, you can substitute such workers with bots for a very low price.
- Decisiveness and firmness. Human traders often miss great opportunities or fail to close out a market position at the best moment due to stress, hesitation, fear, doubt, and many other emotions and issues that never affect robots. It is the biggest reason why so many novices prefer paying for bots.
It is also important to remember that you can also engage in other forms of investing. Social trading, preset automated trading systems, and in-depth analytics help users achieve incredible results even if they don’t have any prior exposure to financial markets and the crypto industry in particular. The flexibility is what makes contemporary automation platforms quite useful to all investors regardless of their risk style and investment preferences.
How to Use WunderTrading's Trading Bots for Cryptocurrency Trading
The WunderTrading platform is one of the best in the market. Thanks to its holistic approach to building products and excellent technology, users can deploy bots for various purposes and connect them to a variety of crypto exchanges that have a functional API.
The process of getting started with the WunderTrading platform is quite simple:
- Start with setting up a WunderTrading account. Go to the official website and simply register a new user. You won’t need to provide any sensitive information, but we recommend you to use two-factor authentication and other security features to protect your account.
- Immediately after creating a new account, you will be prompted by the system to start connecting exchange accounts to WunderTrading. All communications between technological platforms occur via API. You don’t need to give away your credentials. Simply use the API key from the exchange and connect your trading account with the WunderTrading app.
- Test various features of the platform before paying. It is a good idea to use the free account to take a closer look at what you will be receiving after paying for an upgraded plan. We recommend testing all available free features before committing.
- Learn about receiving signals from the TradingView platform, the best analytical and charting tool out there. You will be using various technical analysis strategies from this website a lot. We strongly recommend learning how it works and how it interacts with the WunderTrading app.
After laying down the groundwork, you will need to focus on creating and launching your first bots. There are various options to choose from. Novice investors are encouraged to use social trading and preset solutions to get started without diving headfirst into the complexity of running an automated trading system. While mastering all available features is a good idea, you should never overwhelm yourself with information and learning new skills.
The WunderTrading platform offers some of the best methods of customizing bot strategies. You can adjust everything:
- Choose the number of bots that will run at the same time using your strategy deployed on TradingView.
- Select the right position size for each trade to ensure that your portfolio is protected from unwanted risks.
- Set up stop loss and take profit delayed orders (SL/TP) to further reduce risks and make your bots autonomous.
- Browse through settings to make your bots faster, smarter, and less risky.
With the introduction of new AI-driven features and novel preset products, the WunderTrading platform presents you with a unique opportunity to build an efficient trading system based on the latest breakthroughs in the fintech industry.
Tips and Best Practices for Successful Cryptocurrency Trading with Trading Bots on WunderTrading
Some newcomers may wonder whether they should use bots to trade. Hesitation is often fueled by informational content from influencers and financial experts teaching their audiences various investment tricks and often condemn using bots. It is true that simply deploying a bot will not automatically generate money. However, many downfalls of automated systems can be easily neutralized by very simple yet time-consuming techniques.
Here are some crypto trading tips for people interested in using automation:
- Use stop loss and take profit orders strategically. One of the easiest approaches to using delayed orders is to employ ratios. More aggressive day trading strategies often employ the 1:3 ratio. It means that you set take profit at 300% of your stop loss limit. For example, if you have a 10% take profit order, you should be trying to aim at 30% stop loss. This is an aggressive system that requires a reliable and consistent technical analysis strategy. If you want to be safe, you should move the ratio to 1:2 or even 1:1.
- Use extensive testing. There are various instruments that can help retail traders check the potential profitability of any given strategy. The TradingView platform allows you to test any deployed technical analysis strategy using its terminal. You can also run the back-testing feature on the WunderTrading website with any crypto trading platform! All retail traders using automation should double-check their strategies before deploying them in the real market.
- Iterate until you refine your system. One thing that many retail traders do not fully understand is that a bot for crypto trading is not a single immutable entity. You don’t set it up and just leave it out there doing whatever it is supposed to do under your initial guidance. A bot can be adjusted and changed, your strategy can be fine-tuned based on its current performance, and risk levels can be corrected if something does not work is you intended. Stop, rethink, and adjust many times until you have a good system.
There are many other ways to reduce risks and cut losses. While many so-called professionals and experienced investors often criticize the use of bots, they are frequently referring to very specific cases and preset bot products. Obviously, you cannot just pay for a money-making machine. It would make the whole idea of investing meaningless. However, you can pay for an opportunity to create a very successful automated trading system capable of bringing in profits consistently and autonomously.
Risks and Limitations of Using Crypto Trading Bots on WunderTading
When it comes to using a cryptocurrency bot, risks are often illusive and obscure. People do not understand why they are losing money with bots that had such good reviews and testimonials from successful customers. What newcomers do not grasp really well is that bots are as good as their users.
Here are some risks associated with running automated crypto trading systems:
- Unforeseen volatility. Most retail traders are closely acquainted with the concept of volatility. However, many do not understand how it can affect an automated trading system. Bots are not fully autonomous entities that can easily adjust to changing market conditions. Users must predict potential volatility spikes and make corrections or simply disable bots when expecting something that can bring chaos into the market.
- The quality of technical analysis. All automated trading systems are based on a technical analysis strategy that users must choose on their own. It is the single most important responsibility of a retail trader interested in running a bot-driven trading strategy. Technical analysis is all about pattern recognition and systematization. If you can find a good approach to make solid predictions in the majority of cases, your bots will succeed. If a strategy fails to deliver reliable forecasts, your ATS will lose you money.
- Security risks. Giving away API access to any third-party is a way to create vulnerability. Users now have to ensure that two access points are secure: their exchange and WunderTrading accounts. It means that you should use common safety techniques and be very careful whenever interacting with your automated trading systems.
Managing risks while using bots can be tricky, but it is something that all retail traders must learn. As you see, all risks commonly associated with using automated trading bots in crypto are human factors. While technological risks exist, the probability of their occurrence is so low that you don’t need to account for them when assessing the overall riskiness of using bots.
The main takeaway
Using the WunderTrading platform is the best way to create a sophisticated automated trading system and make it as safe and reliable as you want. Get started right now to slowly move along the learning curve and acquire the necessary knowledge to build low-risk, consistent strategies for cryptocurrency trading.