It is hard to imagine an actively managed crypto portfolio that does not utilize automation to at least some degree. Bots are loyal friends of contemporary retail traders who want to quickly adapt to the market instead of relying on rigid and often outdated portfolio management techniques used by old school investors.
While the use of automated crypto trading bot does not guarantee consistency or profitability without a good technical analysis providing high-quality signals, it is an integral component of any modern investment plan executed, wholly or partially, in the cryptocurrency market. One of the best providers of automation products is WunderTrading.
Table of Contents
What is automated crypto trading?
The old way of entering the market may seem quite slow and unintuitive by the new generation of retail traders. Using the manual interface at a CEX platform is certainly not a chore, but it does slow down your reaction time and creates unnecessary obstacles on your way to placing an order. You need to create a position and set up delayed orders which can be time consuming processes.
Automation allows retail traders to instantly react to any market conditions around the clock given they use an appropriate technical analysis strategy to produce high-quality signals.
Bots can be used to achieve all sorts of investment goals with less time wasted and better performance on average compared to human traders. Here are some methods of utilizing automated crypto trading strategies:
- Use DCA bots to buy assets. Distributed Cost Average is the main strategy employed by crypto enthusiasts who believe in the future of the blockchain industry in general. DCA allows you to reduce the cost of investment over a long period by splitting a single market position into multiple orders spread across a descending trend.
- Employ copy trading to balance the risk level of your portfolio. If you do not have the necessary expertise and experience in the crypto world, you may simply choose expert traders to follow based on their risk style and profitability. It effectively introduces a new asset class to your portfolio.
- Build a sophisticated statistical arbitrage system. This approach allows investors use bots to rebalance their portfolio according to changes in the market. Usually, it takes a team of traders to do it, but bots can do all the busy work while you focus on the overall strategy.
- Diversify your portfolio with investments in safer strategies like crypto arbitrage. It is possible to use GRID and arbitrage bots as a hedge against riskier investments in your portfolio to make it more balanced. Preset bot systems at WunderTrading are designed to be safe while generating sizeable yields.
Automation is necessary. However, there are different types of automation vendors out there. You should be working with the best. Let’s talk about many features and products that you can find on the WunderTrading platform.
Building a fully automated crypto trading bot at WunderTrading
There are several products that you should keep an eye on: social trading, preset bots, and custom bots. The first two are quite straightforward. When you want to copy actions of more experienced traders, you go to the marketplace. When you need something easily deployable, you use presets like DCA or GRID bots.
The most interesting product in the WunderTrading’s lineup is custom automation. You may combine reliable crypto signals & automated trading to build an excellent bot that. WunderTrading can get from multiple sources, but the most commonly used is the TradingView platform, one of the best charting and technical analysis platforms out there.
You should always remember that the quality of trading signals defines the overall performance of your automated trading systems. If you have a technical analysis strategy that produces good alerts only 50% of the time, you should not expect any profits from your bot. Selecting the right strategy is the first step to success.
If you have one, the WunderTrading platform is the best place to automate it. The official website contains many detailed video instructions that explain how to connect your WunderTrading account to TradingView or set up your bot.
Here are several great tips how to use the platform and its advantages:
- When building a bot, carefully read all the parameters that can be adjusted. WunderTrading allows you to change many settings like size position, number of simultaneous orders, stop loss and take profit levels, and more. It is important to use these features to reduce risks and increase the efficiency of your trading strategy.
- The back-testing functionality is extremely useful. This feature allows you to test a strategy against the market history. The result won’t be an exact representation of what your system is capable of, but it will provide a new vantage point from which to look at the technical analysis strategy that you use. It may need some tinkering to produce even better results. Iterate until you find the right approach.
- You can run hundreds of bots simultaneously. Setting them up is certainly a chore, but it allows investors to build complex statistical arbitrage systems capable of rebalancing based on the changes in the crypto market. If you have the knowledge, resilience, and experience to build a sophisticated automated trading system, go for it. The WunderTrading platform has all the necessary tools to create it.
- Analyze your automation portfolio regularly. Systematic audits will help you see which systems perform well. The “My Analytics” section of the dashboard is a useful source of numbers to crunch. Adjust your portfolio depending on the results of each individual survey of your active bots.
If you are confident that your strategy can generate more true positives than false ones, an automated trading system can work autonomously without any new inputs from its user. While automated crypto trading strategies should never be used without any supervision, the ability to create something fully autonomous is quite intriguing.
Start automating right now!
One of the biggest changes in the product lineup of WunderTrading is the introduction of AI-assisted bots that will use machine learning to analyze the market and make trades based on the information they have analyzed. The system promises to change the way we see automation and investments in general. Become an experienced WunderTrading user to benefit from the inevitable rise of AI systems in the world of crypto trading!
