Bitcoin Custom Trading Algorithms

Julie
5 min readDec 9, 2020

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Algo-trading was developed so that traders do not need to constantly watch an asset and send simultaneous orders manually. which is a difficult task.

Driven by immense potential and greedy speculation. the altcoin market is extremely volatile. Seeing altcoins rise or fall by 20 to 30 percent in a day is nothing unusual for the market. These fluctuations present enormous opportunities for traders.

Money never sleeps in the altcoin industry. Unlike traditional markets. the digital coin market has no closing time. Being able to automate trading increases traders’ edge as it allows their activities to go on even while they sleep.

The altcoin industry is younger. and thus less saturated with algorithmic trading activities compared to traditional markets.

When to Trade Algorithmic trading can help traders figure out the right time to make a trade based on many variables like volume. price. momentum. etc.

  1. Arbitrage Arbitrage trading is the concurrent buying and selling of an altcoin to profit from its price imbalance. This strategy is done by exploiting the price differences of altcoin exchanges.
  2. While a human is capable of pulling this off. an algorithm works a lot better. faster. and more efficiently. Markets tend to even out quickly and if an arbitrage trader is not quick enough. he/she might lose money instead.
  3. A market-maker makes a profit in two ways: by raising the price of an undervalued altcoin or by lowering the value of an overpriced altcoin.
  4. This requires executing multiple orders simultaneously. which is better suited for an algorithm than a human.
  5. How to Trade Algo-trading bitcoin allows investors to trade more efficiently and at better prices. The algorithm looks at variables like the “size” and “timing” of the order.
  6. To build your trading algorithms we can use market tested code of our ready made trading strategies like:
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  24. © Copyright 2010–2019 Empirica. financial technology company that provides: Trading Software Development for Crypto Exchanges. Market Makers. Hedge Funds | Algorithmic Trading | Bots
  25. #1 Repetitive TasksRepetitive tasks consume a lot of time and effort. A crypto trading bot will allow you to virtually “copy and paste” specific tasks to conduct trades with ease. One of the best ways where bots can help with repetition is in periodic rebalances. If you want to conduct hourly rebalances. then you’ll need to. as the name suggests. rebalance your portfolio every hour. So. you have two options:
  26. Set the alarm every hour to rebalance the portfolio and lose your sanity in the process. Create a trading bot and program it to rebalance your portfolio every hour till the end of time. #2 TimingTiming and achieving a high degree of accuracy in your trading is essential for trading. Every single trade that you make can have an enormous impact on your potential earning. Let’s take an example. Suppose the price of Bitcoin is going down. and you want to sell your position the moment BTC hits the $8. 750 support line. If you were to do this manually. you’d have to patiently and carefully observe the price chart. and even then. you may not pull the trigger at the right time. The bot can be easily programmed to monitor the market and execute a trade at the correct times.
  27. The idea is to route trades through numerous trading pairs. Every single trading pair needs to be carefully determined as per its timing. asset quantity. and trading price. This entire route needs to be finished within a specific time-limit before the market conditions change. It seems pretty easy-to-understand. right? However. the execution of this trade could be nearly impossible. This is just one of the many examples of the several complexities that should be factored in while training. Some strategies could be almost impossible to implement.
  28. Trading bots could be used to automate these complicated and seemingly impossible strategies with ease.
  29. Each time the buy limit order is filled. a new sell order is placed by the bot right above that price. And vice versa. a new buy order is placed below any filled sell order. As long as the price stays within the borders of the trading range. the bot will be trading non-stop.
  30. A cloud-based solution. so you don’t need to download anythingTrading bots are based on a transparent and efficient logicRisk-free trading simulator in DEMO modeBacktested Strategies for a quick bot start14-Day Free TrialRead Bitsgap Review
  31. Mudrex does not build its own bot but instead has a curated marketplace of bots created by pro traders. The best part about the platform is that all info regarding the performance of a bot is public and easy for users to understand.
  32. However. with the release of HaasScript. their scripting language. you can develop highly complex trading bots using a drag-and-drop designer or intelli-sense editor. You also have the ability to backtest or paper trade your strategies before executing live trades on over 25 exchanges.
  33. The Hedged trading bot is the most famous as it provides active trading while reducing loss using a hedge.
  34. #7 Shrimpy — The social trading platform for cryptocurrencyShrimpy is a paid Crypto Trading Bot service for rebalancing. This is also the feature that makes it different from other bitcoin trading bot services. It helps you to automate your portfolio and rebalance it to a specific ratio.

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