Despite all of its ups and downs, the cryptocurrency market is still profitable for traders. Actually, its volatility is exactly what makes it one of the most profitable markets to trade in right now. There are countless approaches to trading crypto and experienced traders know how to take advantage of them.
But what about the novice traders or those who are trying trading for the first time? Is the cryptocurrency market kind enough to welcome them in? There are plenty of opportunities to make money, but these opportunities are only open to those who try new things.
In this article we’ll cover one of the methods available for traders of any level: trading bots.
Trading manually: What is it like?
Trading is an art of mastering your emotions, according to trading gurus like Alexander Elder and Jesse Livermore. This is an important part, controlling emotions, but the hardest part is to understand exactly what you’re doing.
Trading means waiting for an opportunity to buy or sell. It’s basically waiting, nothing more, and it’s really as boring as it sounds. If you want to make a profit, you have to find trading opportunities across many assets, and stay near your trading terminal as long as the market is open. It’s a full-time job, and it requires staring at charts all day, and sometimes all night.
Most traders have follow a trading system: a set of rules that formulate buy and sell signals without any ambiguity or any subjective elements. These signals are determined by technical indicators. The rules can’t be violated, otherwise the trader will lose money by making bad trades, entering too early or exiting too late. That’s why it’s good practice to have a trading plan (and update it every day) to determine what assets you’re planning to buy and what prices you want for entering and leaving positions.
Every active trading strategy must be based on trading indicators and certain calculations are based on price, volume, or open interest. There are dozens of various indicators and some of them even contradict each other. The job of a trader is very technical, and all you have to do is to find the patterns defined by your strategy. It sounds boring to most people, and requires years of practice and countless money losses. Let’s take a brief look at what the usual pattern of trading actions looks like.
Digging a bit deeper into the trading process
To start trading, you have to make certain steps:
- Find an asset
Find an asset that seems interesting to you in terms of price and profit. There’s a special term, a risk-reward ratio; this ratio indicates how much you can win and how much money you can lose on a trade. A good trade is when you can win more than you lose, of course.
For example, if you have bought an asset for $100, and it’s indicators show that it can increase in price 1.5x or drop 0.75x, that means you can make $50 or lose $25, that’s a 1:2 ratio. The reward is bigger. If the reward is lesser than the loss, you should not make this trade.
- Estimate the chance of a favorable outcome
After doing your research, you should estimate the chance of a favorable outcome. If your risk-reward ratio is positive, but the winning rate of the $100 trade is only 20%, that means you lose $100 on every 10 trades with a 1:2 reward ratio.
- Set limit orders
If both are good, the chance and the ratio, you can open the trade. You set the price of the order and you choose whether you want to go long or short. Taking a long position is buying with the goal of selling it higher than you bought. Going short is borrowing an asset from the exchange or the broker, selling it, and buying back when the price reaches the target.
The order can be executed immediately, as a market order, at any asking price. Or it can be placed as a limit order, and it will be executed at the exact price set by the trader. The number of limit orders, set at different levels, is limited only by the size of the trading account, and as long as you have unreserved money you can open new trades.
- Set stop orders
After opening the position, and when your order gets filled, you should think about setting stop orders. Stop orders protect your account by limiting potential losses, in case the trade goes against your expectations, but setting these aren’t obligatory.
- Wait for your price target (it can be hours, days, or even weeks)
When the price reaches your target, it’s time to sell if you’re long, or buy if you’re short. You have to execute one more order, it’s up to you to choose, should it be a limited or market one.
- Take your profits and… start from the beginning!
After taking in your profits, it’s time to look for another trade. Hence the circular life of trader.
What if you don’t want to spend years learning to trade?
A simple solution for those who don’t want to spend their time sitting in front of a computer is automating the process with trading bots. These small software helpers automate the process by following a predefined strategy. They find good trades based on technical indicators and then they buy/sell crypto on their own, making profits for you. It’s easy to set up a bot and start making money, even if you don’t know how to trade properly (yet!).
There are many trading bots, such as CryptoHopper, 3Commas, CryptoTrader, and Shrimpy, but based on our research TradeSanta has the easiest interface and is well suited for novice traders. The platform allows users to simply start trading after making some initial configurations. It’s fast and easy to use, that’s why we’ll gonna talk about it next!
TradeSanta is cloud-based software. It doesn’t require installing it on your PC to run it. You can use it from your mobile phone or any other device. TradeSanta connects to a crypto exchange via the exchange API and starts to trade based on your configuration. It uses such tools as the trading signals we’ve talked about earlier alongside filters to find trading opportunities.
Filters are the way to customize TradeSanta to fit your own needs. You set the parameters, choose the long or short strategy, and choose the trading pair. It goes even further than that by letting you choose the amount of extra orders – the orders to be executed if the price goes in the wrong direction, for example.
TradeSanta doesn’t express fatigue, it can’t be emotionally affected by bad market conditions, and it can work 24/7. Also, it reacts a lot faster than any human, executing all orders instantly, when the necessary conditions are triggered. You can connect the bot to the most popular exchanges: HitBTC, Binance, Bitfinex, Bittrex, and many others such as BitMEX, OKEX, and Huobi are going to be added soon. It’s very important to understand that the trading bot doesn’t have direct access to your funds, it only sends buy and sell orders to the exchange (like you would do manually).
It has three plans, including the free one, which allows you to create up to five bots. The paid ones offer more bots, which may come in handy if you have a large account. There’s no additional commission for placing orders, only the exchange’s fee.
- Free plan – Up to 5 bots
- Basic plan – Up to 49 bots for $15/ month
- Maximum plan – Unlimited number of bots for $100/ month.
It’s up to you whether you want to trade by yourself or trade via TradeSanta. However, by using a bot you not only make money, but you also save time. A day trader spends five hours every day trading – because its a job for them, even if they’re self-employed. Crypto markets work 24 hours a day. You’ll always have the chance to miss something important. At the same time, a trading bot is consistent, it can trade non-stop, doing exactly what it needs to do in order to follow your strategy.
It can work for you no matter your trading experience or how much free time you have. It can bring in some small bags of money every day, and you don’t even have to worry about it. Giving it a try doesn’t require any skills or payment (the first plan is free). Perhaps you’ll find that it’s exactly what you’ve been looking for.