How a Cryptocurrency Trading Bot Can Help Improve Your Trading

Fri Jul 21 2023

understanding crypto trading bots

Cryptocurrency markets are always open, making it difficult for day traders to keep track of their investments at all times. However, the use of cryptocurrency trading bots can help automate the process and allow traders to take advantage of price movements whenever they occur. This article will explore what trading bots are, how they work, and why any serious cryptocurrency trader should consider using them.

What Are Trading Bots?

Trading bots are software programs that execute trading strategies without the need for constant monitoring. These bots interface directly with cryptocurrency exchanges and look for pre-programmed buy or sell conditions. They are designed to execute trades based on a trader’s strategy, without any emotional influence. While historically they presented a real challenge in terms of creating, setting up and running them, algorithmic cryptocurrency trading platforms such as Aesir offer a simple way of creating, running and testing your cryptocurrency trading bots with no code at all.

Benefits of Trading Bots

One of the biggest benefits of using trading bots is that they remove the emotional element from trading, therefore improving the consistency and accuracy of your strategy. Naturally, it’s up to you to find a strategy that works. Trading bots can help you do that with advanced testing features such as backtesting and paper trading, but it’s ultimately up to you to determine which strategy you’re taking to the live market.

Emotions can cloud judgment and cause traders to make poor decisions. Trading bots execute trades based on pre-determined conditions, which means they make logical, calculated decisions based on market indicators. It also means that remove any human bias from the equation helping you determine if what you have is indeed a repeatable pattern or strategy.

Cryptocurrency trading bots also operate at lightning speed, making it possible for traders to take advantage of small price movements that occur over short periods of time. Aesir’s volatility trading bots offer a unique approach to trading market volatility using real time market volatility by analyzing all assets on a single exchange.

Building a Cryptocurrency Trading Bot

There are hundreds of cryptocurrency trading bots available on the market, so it’s important to do your research before selecting one. High-quality bots typically come with a price tag, but they offer more features and better security than free bots. When selecting a bot or an algorithmic trading platform, it’s important to consider its security history, support network, and the currencies it trades.

With Aesir you can create your own trading bots from scratch, or use our Social Hub to find other profitable trading bots and clone them with a single click. However, keep in mind that with copy trading, when you’re copying a running configuration, you’re not copying existing positions, so your results will differ from the original strategy.

Using a Cryptocurrency Trading Bot

Once you’ve built, configured or cloned your trading bot, you’ll need to set it up to trade on your chosen exchange. Most major exchanges allow bots on their platforms and have an API that allows bots to interface securely with the exchange. Depending on the exchange you’re planning to trade on, you’ll need to generate an API key and pass this to the trading bot so that it can place orders on your behalf.

It’s important to note that API keys allow access to your account, so please ensure to store them safely and never share them with untrusted sources. For security reasons, make sure that you disable the withdrawal feature, and wherever available, restrict IP access to IP addresses that you recognize.

Before launching your trading bnot on the live market, you’ll want to test its performance and ensure that your bot works in the way that you are expecting.

The best way is to learn by doing, so why not take Æsir for a spin. See you around!


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