With the launch of cryptocurrencies, the world witnessed a new addiction: trading cryptos! With such a volatile market, you can’t blame them traders. With the great rise and fall of Bitcoin essentially, traders could not help but dive into the potential of huge earnings and test their trading skills. While many are succeeding, others are drowning their fortunes and themselves into the never-ending waves of buy and sell. However, investors might not worry about taking advantage of such fluctuations due to long term goals, traders tend to make huge amounts of money from such volatility, and trading is nevertheless one of the most popular means of acing self-employment. Unfortunately, it’s humanly impossible to avail every profitable opportunity as it requires a trader to continuously analyse the trade graph with eyes glued to the screen, giving way to Bots!
So After all, What is a Crypto Trade Bot?
Simply put, Crypto Trading bots help automate the trading process and thereby relieve pressure on traders whether individuals or companies. The T.R.O.C Trade Bot is a software program that uses APIs to interact with crypto exchanges to actively monitor them round the clock and react accordingly with predetermined strategies and criteria that traders and companies have chosen as per needs. As a simplest example, if the T.R.O.C has been told to buy a commodity once its price touches $300 or lower, and sell once it reaches $600, it will perform exactly with these limits, hopefully making a profit. Advanced features such as strategies and indicators help specify market conditions in more detail thus making T.R.O.C behave like a human.
What are Trading Strategies?
T.R.O.C leverages algorithmic trading in order to run and process complex mathematical formulas essentially automating and accelerating the trading process.
Oh my! What on Earth is algorithmic trading?
Let’s start with the basic Trend Following Strategy
We call it the simplest trading strategy in which T.R.O.C reacts to direct market changes. As the name suggests, Trend Following does not involve complex algorithms that need to incorporate elements such as predictive analysis, forecasts etc. and hence are very simplistic.
This model makes T.R.O.C exploit the differences in prices among numerous cryptocurrency exchanges around the world wide web.
In the world of cryptocurrency, there is no single centralized exchange to determine the price of a crypto asset – on the contrary central banks perform this role with fiat money and due to this reason, prices vary from exchange to exchange.
For a good example, South Korean exchanges have historically shown a higher price than ones based in the United Staes, thereby opening an opportunity of potential profits for anyone switching trades between the two. The T.R.O.C helps traders take full advantage of this factor by allowing them to automatically trigger trades when designated price differentials are met.
The MM strategy allows cryptocurrency traders to buy and sell great volumes of currency and profit from the spread. With great volume comes great responsibility! Therefore, to be able to trade such high volumes, leading market making traders rely on T.R.O.C!
Percentage of Volume
With this strategy, until the trade order is fully filled, T.R.O.C continues sending partial orders according to the user’s defined participation ratio and the volume traded in the chosen markets. The related “steps strategy” posts orders, also as per user-defined percentage of market volumes and increases or decreases this participation rate when the stock price reaches levels defined by the user.
Like the idea? Explore more trading strategies here.
Crypto Exchanges love Bots. Or is it vice versa?
Many exchanges integrate Trading Bots to supplement their Order Books to provide liquidity to users. Beware, do not let your thoughts go astray like those South Korean exchanges which were either banned or badmouthed due to excessively Bot-generated trade volume. Use is good, even recommended. Abuse however, is bad. No, it’s worse!
Who can benefit from a Trading Bot?
Individual traders. Companies in the trade business. Cryptocurrency project owners. Market Makers, and Exchanges. If you’re still wondering or wandering, reach out and we’ll help you find your benefit. Find out more!