The power of AI is being experimented with other technologies by researchers in different areas and in different ways. I’m not bragging, but it honestly does a decent job. AI can reduce the efforts on a task by around 80%. The percentage speaks loud, isn’t it? Trading is a task that requires so much time and effort in order to achieve profitable results. For example, analyzing a coin’s past price data requires comparing the price charts of the specific coin for a few months. On the other side, AI can do it in a matter of seconds. You can create a highly profitable bot by using proficient AI Crypto trading bot development services. Let us find out more!
What else can AI do in Cryptocurrency Trading?
That is what this blog is all about. If you take automated crypto trading bots, they are suitable for naive traders. Likewise, experienced traders can use trading bots to increase their potential returns. Moreover, these bots are very easy to use, similar to your smartphones. They work based on the instructions you feed into them. As simple as that!
Helps Optimize your portfolio
The trading bot does a great job of rebalancing your investment portfolio based on your preset strategies. With regular performance tracking, asset allocation, and market analysis, bots can make better data-driven decisions. In the end, your portfolio will remain aligned with your goals and risk tolerance levels without needing constant monitoring manually.
Gives you powerful computational abilities
Trading bots are the best tools for high-frequency trading strategies. They will help you perform trades in fraction of seconds by employing advanced algorithms to find a short-term market condition and yield good profits. Thanks to its exceptional computational skills! It allows you to trade quickly and efficiently.
Be your all-time trading partner
Unlike us, bots don’t need a burger or a Coke to work actively. So, it will work day and night throughout the year for you. They can examine the market movements 24/7 in real-time to increase your chances of getting profits.
Gives you wall street trader advice
Risk is an unavoidable part of a trading adventure. Managing risks might be a difficult task for you but not for bots. Bots are equipped with various risk indicators to execute less-risk or zero-risk trades. Also, they are integrated with new APIs and algorithms to analyze real-time news and market emotions. So, you can react immediately to market-making situations and reap good profits.
Can mimic successful trader's strategies
Another feature of using a bot is that it can help you copy and follow the trading strategy of successful traders. If you’re a newbie taking baby steps into the trading world, trading bots will help you by copy-trading expert traders’ trades.
So far, I have talked about trading indicators, but I would like to add some examples for a better understanding. Here you go!
Relative Strength Index (RSI)
This indicator tracks cryptocurrencies and tells you if a coin is overbought or oversold. With that, you can find the potential entry and exit points.
This crypto trading indicator acts as a protective shield around your coin’s price chart. When the price hits the upper band, it means the coin is overvalued. Touching the lower band indicates an undervalued opportunity.
Moving Average Convergence Divergence
MACD is best at investigating price trends. It indicates when the MACD line crosses a bullish or bearish signal line. MACD indicator will help you spot changes in momentum and stay ahead of trends.
Rising coin prices with high volume indicate a strong trend, while price dips with low volume indicate a weak market trend.
Now, I have explained a few unique selling points of a trading bot in general. If you want to know what your perfect trading bot will look like, then let me spill some more information about choosing a suitable trading bot for you. Keep scrolling!
How can you choose your ideal trading bot?
That’s simple! Widely, two strategies hold a steady place in the trading world – Long and Short trading strategies. The long strategy will help you purchase coins at lower prices and sell them at higher prices with maximum profits. Conversely, the short one will help you sell owned coins with the thought of purchasing them back after a while, during the dip. The price difference between the buying and selling value will be your profit.
Keep in mind that choosing a trading strategy is an art. You need to look into two factors – trend of the crypto pair and asset composition of your trading portfolio.
Analyzing the trend will help you make better decisions. Bots use trend indicators to explore the market to accomplish the task in no time. Some traders use both long and short strategy bots to take advantage of the market circumstances. However, you need to adjust and configure the bot according to market trends.
Let me make it more narrow. If you prefer automated trading, then long strategies will work well for you. Or, if your portfolio consists more of altcoins, then a short strategy will be the best option. In some cases, you can combine both based on the market trends. Ultimately, the choice of strategy is up to your convenience and goals. After fixing it, you have to consult a good Crypto trading bot development company to create your bot.