Thu Nov 23 2023
Cryptocurrency markets are currently experiencing increased volatility and price swings, making it a prime environment for a cryptocurrency trading bot. Continue Reading.
Successful traders prepare themselves by waiting for the right opportunity before making their moves. Sometimes the right thing to do in a market is to do nothing. It takes both knowledge and patience to recognize when it’s time to wait and when is act.
A healthy market needs volatility, and it doesn’t get healthier than the cryptocurrency market in the last few weeks. The increased trading volume and swings makes it a great time to run a cryptocurrency trading bot.
For instance just this month, Solana saw a dramatic price fluctuation as it rose over 300% from the end of October, now trading at around $56.
BTC, ETH as well as many other alts have also seen dramatic spikes in price. This kind of volatility is exactly what cryptocurrency trading bots.
You see, every drastic market movement is usually followed by a correction. It’s these corrections that offer some of the best opportunities to pocket in some profit while increasing the size of your investment.
It’s hard to determine exactly the threshold at which point a spike will have a sudden and immediate correction, but with practice, you’ll get better at detecting them. For instance, take a look at the chart below.
This is a 10% pump followed immediately by an 8% correction. Timing this perfectly is nearly impossible, but entering around the time the spike has ended, or shortly after can still generate a good, and more importantly, consistent return. The best thing about this approach is that in the current market conditions is that it’s repeatable. Because it’s repeatable, it’s the perfect strategy to consider automating.
Algorithmic crypto trading platforms like Aesir are perfect for automating these kinds of strategies. They’re easy to use and best of all, allow you to safely test a strategy in a virtual environment with no risk, so you can double-check that your strategy indeed works the way you intend it to, without exposing yourself to unnecessary risks.
Not only are the market conditions ideal for this kind of swing trading, but many Algo trading platforms out there are also giving out massive Black Friday discounts for a limited time.
For instance, Aesir is offering 50% off on all subscriptions with code AESIRBF50 at checkout. This is the best value that users can get, and a premium subscription unlocks powerful new features such as Paper Trading, Trailing Stop Loss, Faster execution, and more complex trading bot logic.
The only thing to keep in mind is that testing a strategy is absolutely vital to its success. Especially with swing trading where it’s unclear where that sweet spot is. That’s why most Algo trading platforms allow you to run multiple bots in parallel to and see how they perform.
However, unlike other platforms, Aesir was specifically designed with swing trading in mind. Whether long or short term, Aesir allows you to select a Price Volatility threshold and a Time window.
For instance - you could create a bot that scans all coins on Binance and places a buy (or sell order) when the price rises by at least 10% in the last 20 minutes.
Naturally, you’re free to use other indicators such as MACD, RSI, and even computed TradingView Indicators. However, many moving average indicators are known as “lagging indicators” meaning they follow the price, and not the other way around.
Whatever you approach - always test and optimize.