Sat Jul 22 2023
Cryptocurrency volatility can be a deciding factor in your strategy's success. Here are some tips on how to take advantage of it using a binance volatility trading bot.
The cryptocurrency market is highly volatile, which makes it both a very appealing yet risky market to navigate from a trading perspective. Trading bots that react to market volatility are used to quickly detect and take advantage of a pattern in order to make a profit. There are many indicators and approaches to this, but in this article we’re going to cover a tool that’s unique to Aesir.
Originally named the Binance Volatility Trading Bot, Aesir’s Volscan Module allows traders to create a unique set of trading logic designed to help trades take advantage of rapid market movements. The Binance trading bot on Aesir can automate your trading strategy, allowing you to take advantage of trading opportunities based on predefined strategies. You can create strategies tailored to your trading goals, such as focusing on coins with high volatility or those that have shown a specific percentage increase in price.
This module tracks market volatility by analyzing price changes over a specific period.
The two primary configurable options in the Volscan module are the price change in percentage and the volatility window. By tweaking these options, you are able to create a volatility trading bot that works for your particular trading style. For instance, you can set the Binance crypto trading bot to buy any coin on Binance that gained more than 3% in the last five minutes. This is known as short term volatility, but both the Price Change % and the Volatility window are configurable to match any trading style.
The Volatility trading bot can therefore be used to detect short or long term volatility, or even listen for a potential spike in the price, allowing you to potentially catch a moon shot. It’s up to you to find that sweet spot though, so it’s recommended that you start off in paper trading mode, and only deploy your strategy to the live environment once you’ve found a combination that works for you.
One of the significant advantages of Aesir is its ability to analyze all coins on Binance. If you leave the “Coins To Analyze” field empty, the bot will review every coin available on the platform. Alternatively, you can specify which coins to focus on, giving you granular control over your trading strategy.
Effective risk management is a cornerstone of successful trading. Aesir incorporates several features to ensure traders manage their risk effectively.
The platform provides a Trailing Stop Loss option, an essential tool in the volatile crypto markets. This feature adjusts your stop loss level automatically as the price of your asset increases, securing your gains in case of a sudden market downturn.
The Max Open Orders feature lets you determine the maximum number of open orders at a time. By controlling the number of orders, you can manage your potential exposure effectively.
Finally, the Volatility Cool-off feature prevents hasty decision-making. If a coin is bought, it will ignore another buy signal on the same asset for a specified duration, helping you avoid buying into short-term price spikes.