Dec 08, · Bitcoin robot trading is a lot faster than manual trading. Instead of manually analysing markets, opening an account on a cryptocurrency exchange platform, waiting for . Oct 02, · 24crypto.de("long", true, limit = close - 1, when = longCondition) 24crypto.de("short", false, limit = close + 1, when = shortCondition) Finally, our Bitcoin bot has been finished, and is technically functional as is. However, there is one more thing we must add to . Aug 21, · In our last article on the subject of Bitcoin trading assisted by a trading “bot”, we had the opportunity to review the evolution of different trading strategies, from classic and very human strategies in the finance sector to strategies managed in full autonomy by crypto-traders robots which prove most of the time much more efficient than a trader in flesh and blood.
Bitcoin bot trading strategyLearn How to Day Trade Bitcoin: a Guide with Winning Trading Strategies
One of the significant advantages of trading Bitcoin CFDs is the addition of leverage. After all, you are able to trade multiple times the amount of BTC than you would if you had to buy the cryptoasset outright.
The downside, however, is that potential losses are increased as leverage is increased as well. If you net a profit, it would be 50x higher than what you would have earned if you purchased the cryptoasset outright and then sold it. But, if you predict wrongly, your losses will be 50x as much. So, in order to determine whether you want to buy and sell Bitcoin outright or work with CFDs, you must determine if the potential rewards are worth the risk.
Before you delve into cryptocurrency market research, we recommend reading up on the following terms and their applications. On a Bitcoin trading platform, buyers and sellers are automatically matched up.
These platforms act as a middleman between both parties, and trades are based on the current BTC market price. Marketplaces, on the other hand, are peer-to-peer, meaning that sellers and buyers communicate with each other directly while carrying out a trade.
For higher volume trades, it may be better to use a Bitcoin broker. The dealer acts as a middleman, finding buyers and sellers who have large pools of cryptoassets.
There are usually larger associated fees, but this option is more convenient, more flexible, and faster than going through an exchange platform. It will look like this:. This is different from fiat currency prices because there is no universal BTC price that everybody follows. Depending on the platform, you may be able to change the timeframe that highs and lows are pulled from.
This term refers to the total number of Bitcoins that have been traded in a specified timeframe. Traders use volume to determine the significance of a trend. If a trend is significant, it will be accompanied by large volumes — and, conversely, low volumes indicate a weak trend. A market order also referred to as an instant order is where a trader sets the amount of BTC they would like to buy or sell. They can then order the exchange to execute the purchase or sale instantaneously.
The platform will then match you up with a buyer or seller to meet your order. In many cases, you may be matched with multiple people and at different price points. The order will be complete once enough buyers or sellers have been gathered to fulfill your set amount of BTC. This kind of order allows traders to buy and sell BTC at a specific price that they can set.
This is used to minimize losses in case the price of BTC or another kind of crypto drops dramatically. If you learn to study the patterns that Bitcoin follows, and where to buy and sell at, you can take advantage of long-term trends and minor fluctuations alike. The two main types of price prediction are fundamental analysis and technical analysis. Fundamental analysis consists of studying what is going on in the world right now.
There are also disadvantages to using fundamental analysis. The information you receive may not be entirely reliable. Double-checking your sources and always ensuring that you know what the information you receive is based on can help guarantee your success.
Additionally, news sources that you may indulge in could be biased or just totally wrong. Thus, stay safe so that you never fall susceptible to faulty information that can put you at risk and even harm your bottom line.
If you want to implement technical analyses, you need to research a lot about the former history of Bitcoin and how it has changed overall throughout its past. This means that reviewing previous rises and falls in the Bitcoin price history to help you reach an informed decision will be your main strategy.
By checking how the cryptocurrency has responded to past situations, you are able to accurately guess how the extremely volatile currency will respond to current events. One of the disadvantages of using this method is that the history of Bitcoin only dates back a mere 10 or so years.
This means that, while a lot has happened in this time, it is still not a large enough period of time to confidently make completely accurate decisions. Perhaps, in another decade or so, this method will become increasingly feasible; however, at the present moment, that is just not the case.
We recommend incorporating both technical and fundamental analyses into your trading strategy. There is no official BTC exchange market — so, you have lots of options to choose from. Some are great, while others are less-than-reputable. Take the following factors into consideration:. You will likely need a verifiable email address and phone number to create an account. Some exchanges will also require you to verify your identity by uploading documents.
Once your account is set up and verified, deposit funds into your account. This step of the process will vary depending on the exchange you use. This is where you can set market and limit orders. There are many different strategies that can help you to effectively trade Bitcoin, and more are being invented by the day. However, although we have analyzed multiple trading systems, the three explained below are the most optimal and profitable, per our findings. We hope that you are able to successfully implement and benefit from them to the fullest extent.
Day trading is a type of trading where you never hold onto any Bitcoin at all, and actually sell all of yours by the end of the day, no matter the losses you have sustained unless, of course, Bitcoin has dropped a tremendous amount. Although it does take up a lot of your time throughout the day, this is a way to make a lot of money in a short time.
Due to the fact that you are actually just buying and selling on the fly, whenever Bitcoin rises a predetermined amount, you will never benefit a huge amount from rises, but also avoid major losses from dramatic downfalls as well. Therefore, you reduce risk while maximizing the amount of profit you are able to obtain from buying and selling your preferred cryptocurrency.
This strategy works for any cryptocurrency, but Bitcoin is the most volatile and, therefore, the best choice. Bitcoin automated trading works very similarly to the previously mentioned method. You utilize software to do all of the hard work for you, such as deciding when, where and how much Bitcoin to buy and sell.
At the same time, you control whether your strategy changes day-by-day, or if you are gunning for the long term. Additionally, by trusting the software, you no longer need to worry or concern yourself with your gut feelings, meaning that you can sit back, relax, and enjoy the lessening of pressure.
Bitcoin scalping is more of a fringe method than any other way of trading Bitcoin due to its unreliableness. Scalping is when people buy the entire stock of something and then sell it back to the actual real purchasers at inflated prices. This often occurs due to there being no supply left for those other people to access, meaning people are forced to buy from the scalpers who drove up those prices in the first place.
Bitcoin scalping works in relatively the same way. When the price is low, you buy up a lot of Bitcoin, and then drive it upwards again. Although, this method does require a large amount of either assets or other people willing to work as a coordinated team to help you achieve the level of effectiveness that you seek.
Swing trading is the act of buying and selling following a certain degree of chart movement. With swing trading, you are holding your BTC for longer than a single day — as opposed to day trading, in which you close the position before the end of the day. Once you understand how to read Bitcoin price charts, you can use them to increase your profits and minimize your losses.
These charts are typically fresh with relevant information and the most up to date prices that are available to the general public. These indicate rising and falling prices within a certain given time period such as an hour, a day, or more.
A bull market is economically sound and on the rise, whereas a bear market is receding, and asset values are decreasing. Essentially, this is the consequence of large volumes being executed at a particular price point, which is why the overall price fails to break through this cap. Support levels, on the other hand, appear to be a floor that Bitcoin will not drop below. To determine the strength of resistance and support levels, you have to look at the number of times the price of BTC has not been able to move beyond these thresholds.
If it happens frequently, the levels are considered to be strong. As aforementioned, you can trade bitcoin through a brokerage, a marketplace, or a Bitcoin trading platform. Some of the most popular Bitcoin exchanges include:. Security is your most important responsibility.
Making sure that your personal information and banking credentials are never compromised should be at the top of your priority list. Being confident in who you are dealing with, whether it is the company that is storing your cryptocurrency or the person on the other end of the trade, will help to put your fears at ease and make you certain that you are safe.
The cryptocurrency market is extremely volatile. Due to its unregulated state, the market of cryptocurrency exchanging is very flexible, and thus fluctuates readily. You can earn a lot of money in just a single time period, but then lose your entire fortune the very next day.
BTC transactions are permanently located on a public document — anybody can see your balance and transaction history. These transactions are associated with your Bitcoin address rather than your identity, but government agencies are able to use the address to determine who you are.
If you value privacy, you will need to take steps to ensure your privacy. Bitcoin is taxed. All beginner traders are bound to make mistakes — but, by keeping these tips in mind, you will be able to minimize the consequences. We recommend reading up on trading psychology and the detrimental effect that fear and greed can have on your trades. Stay on the side of rationalism, rather than emotions.
You should always be sure to have a trading strategy and actually stick to it. Now that we have a basic strategy in mind for this bot, we can begin to program! Perhaps the most basic language to write our bot in will be PineScript , TradingView's language for writing indicators and scripts. To begin programming, navigate to the PineScript editor in your TradingView account shown below. Firstly, we must derive an algorithmic method to find a " peak " in Bitcoin's volume based on the volumes of surrounding candlesticks.
To pull values for volume, insert these lines into your editor. Essentially, for every candlestick on our chart, these lines will pull the 3 volumes of the 3 candlesticks before it and then calculate their average. These values will be necessary for our next step. To determine whether volume has peaked at a given candlestick, I will be using a simple method of determining whether the current bar's volume is 5 times greater than that of the average of the 3 bars before it.
Note: in a more advanced bot, you could calculate the standard deviation or IQR of the data to determine peaks. This calculation will be entered as two boolean values as shown below, either true to long, true to short, or false to not long, false to not short. Having written our long and short conditions, the buy and sell orders may finally be added to our script.
This can be done as shown below. Note: limit orders are being used because most exchanges charge high taker fees, and our bot aims to avoid those, as it trades at a high frequency.
Finally, our Bitcoin bot has been finished, and is technically functional as is. However, there is one more thing we must add to it: stop-loss and take-profit orders. Stop-loss orders prevent bad trades from losing too much money and take-profit orders allow us to get out with out profit before the price could take a hit.
To implement this, we will add two values that the user may input: percentage change to cause a stop-loss, and percentage change to cause a take-profit.
The orders will be written as shown below, and on the next image, the two user-entered variables are programmed at the top. And with that, you've finished programming your Bitcoin trading bot!