Who Else Wants to Make Money with Cryptocurrency Trading Bots?

Crypto Trading bots are on the rise in the crypto world. Usually, these bots, which are developed based on algorithms, place orders on your behalf. They also monitor price movement, trade volumes, and other trends for you.

This article was published first at CryptoDROI.com

Cryptocurrency trading bots are valuable tools that provide investors with the opportunity to make trades without having to monitor markets and perform other tasks.

With these automated trading systems, traders can get access to the volatile digital currency market at all times of the day.

These bots make trades for you in various ways, including placing orders for your desired cryptocurrency at the best prices available, alerting you when new opportunities arise, and automatically executing trades on your behalf.

This robot-generated automated process is designed to take care of your crypto trading tasks with high accuracy and less influence from human psychology.

With complex strategies and algorithms built into the platform, traders can achieve consistently high levels of success.

Crypto trading bots can help reduce your risk by adhering mathematically to a strategy, making decisions based on fact, not feelings.

As a result, High-frequency and institutional traders widely use crypto trading bots for tasks that would be almost impossible to sustain otherwise.

A cryptocurrency trading bot responds to an algorithm designed by the developer. You choose the trading strategy, and the indicators used to generate “BUY” and “SELL” signals. The bot makes trades based on the requirements you set.

Customization is one of the essential elements of any successful trading. A good trading bot should allow you to customize the settings of your trading strategy as much as possible and be configured with a simple, user-friendly graphical interface.

So, you are probably asking yourself why traders use automated bots in such a volatile market as cryptocurrency trading?

Well, here are seven benefits of relying on automated crypto trading…

Crypto Trading Bots Facilitate Your Access to the Trading Industry.

Before jumping into the crypto field, it is important to note that some people make money by “manually” trading digital currencies. This is exhausting.

For some time now, cryptocurrency has been a gift for experienced traders, while newcomers encounter setbacks after setbacks as they cut through the steep learning curve.

Without a friendly system, you will need preparation and constant research before investing in this space.

You have to learn the ins and outs of the volatile crypto market.

So, a reliable automated trading system will provide an easier stepping stone for you. It will help you minimize your risks as you learn the principles and strategies of crypto trading.

Automated crypto trading is based on the idea of letting a bot or software, which has been given specific instructions or trading strategy, monitor opportunities and market conditions and execute the commands preset by you.

While it is not entirely error-free, automated crypto trading enables newbie traders to monitor successful traders’ strategies to craft their trading plans.

Besides trading on your behalf, the system also allows you to take advantage of several intuitive features as you learn the basics to minimize grave mistakes, which could cost your entire wallet.

Crypto Trading Bots Provide a Degree of Efficiency in Trading.

It is inefficient and tough for us to learn how to trade and decide to enter or exit a trade while analyzing trends in the constantly changing crypto space to execute profitable trades.

Even if you are an experienced trader, it will be impossible to work on similar tasks for long hours without losing track or getting mentally exhausted.

Any honest seasoned trader will admit that trading is an exhausting and time-consuming venture.

You have to be fast-thinking, mathematically quick, and have plenty of experience to profit from your trades.

A crypto trading bot will relieve you of all the stress of analyzing the market, as it does all the work in the background, even when you are sleeping.

Sure, you will have to do your part in feeding the system with effective strategies and instructions, but most of the work is handled by your trading bot.

Crypto trading bots can make split-second mathematical analyses to enable them to execute a trade.

Wall Street couldn’t be depending on bots if they were more efficient than humans.

If you were to make all the right decisions and keep up-to-date with every industry development, you would need to monitor the whole crypto industry nearly on an hour-to-hour basis.

As they say, time is money, so if you waste several hours on a computer only to execute a single order, then you are wasting your precious time.

Crypto Trading Bots Benefits

Crypto Trading Bots Work 24/7-365 for You.

This advantage of crypto bots ties to the above discussion. Naturally, you will need to rest as a trader and take care of other issues outside crypto trading.

Since the crypto market is a 24-hour business, some of the most profitable opportunities might show up when you are away from your machine, for example, when you are sleeping.

In such a situation, Your Crypto Trading Bot will take up the monitoring and execution of orders when the conditions are favorable and will Start Trading since computers respond to changes within seconds, so an automated system will execute orders immediately as soon as your strategy rules are met.

Crypto Trading Bots are Emotionless Traders.

Traders often suffer from emotional baggage when they engage their thoughts in the trading process.

They often question a trade or hesitate before making a move, which can be exhausting.

Automated trading bots relieve you of this problem, as all the orders are completed automatically.

As mentioned above, all orders are executed according to your strategy and rules. It will refer to what you set in terms of profit targets, stop losses, and buy signals to make decisions.

So, if you tend to overcompensate for losses or are excessively hesitant in pulling the trigger, crypto trading bots will help you regulate your trading.

It will also keep you down from getting a bit cocky when your trades are profitable.

This is one of the crypto trading bots benefits I like the most!

Crypto Trading Bots Help You to Maintain Discipline.

Besides minimizing emotional inconsistencies, trading bots will only stick to a specified trading strategy.

Sometimes, this is the kind of discipline that is required in volatile markets.

As you would expect, discipline is likely to dissipate when emotional factors are involved in a trade.

There is always a tendency to desire a little more profit or fear to take action for fear of making a loss.

Consistency is key to success in trading.

Even if you believe your trading strategy will guarantee you a huge margin, you might lower your profitability if you overlook the system’s rules.

An automated trading system will eliminate most of these emotional triggers and stick to a proven pattern.

Crypto Trading Bots can BackTest Your Strategy Using Historical Data.

This one is one of the most useful of the 7 crypto trading bots benefits

Nearly all reliable automated crypto trading platforms have some form of backtesting. This tool will allow you to test your current strategy against historical data.

Some of the metrics that are critical for your profitability are trade volume and win/loss ratio.

So, before you engage in a live trade, try as much as possible to reduce risk.

Crypto Trading Bots Help You Diversify Your Trading Portfolio.

Crypto bots enable traders to manage several accounts and strategies simultaneously.

This will allow both new and experienced traders to spread their risk over several cryptos and markets while putting limits over losing positions.

An automated crypto trading system will scan profitable opportunities across various cryptos and process orders within milliseconds.

Crypto Trading Bots Benefits Conclusion

If you want to really get the main advantages of a crypto bot, get this:

Automated Trading Programs will Help you

1. Reinforce your winning formula: If you’ve spent years perfecting a trading strategy, automation can help you run it more efficiently. This can, in turn, provide you with more significant and consistent gains.

2. Help You Diversify: An automated day trading system allows you to increase your odds using multiple accounts and any number of strategies simultaneously. This will enable you to spread the risk over different exchanges while still hedging against losing positions.

**Now You have learned about “Crypto Trading Bots Benefits,” **so Bottom Line:

Automated crypto trading can be effective when configured correctly. For this reason, you need a well-tested strategy before you engage in a live trade.

With the right strategy, an automated trading system will save you time, help you secure more opportunities, and minimize emotions out of trading.

Gunbot continuously monitors the crypto markets and buys and sells cryptocurrencies on your account when your conditions are met. You choose what to trade, where to trade, when to trade, how much to trade, and optionally you can even take manual control at any time!

Gunbot comes with everything you need out of the box: Built-in Trading Strategies, Trading Indicators, Risk Management, and much more…

Are you Ready to Make Money Now by Taking Advantage of these Crypto Trading Bots Benefits? Get Gunbot Now So You Can Profit!

The new Gunbot V.23 Stable version is out, and a new strategy for you to earn more. Take advantage of this new price action trading method included in all Standard, Pro, or Ultimate Gunbot Editions.

Suppose you want to make money in crypto trading in the long run. In that case, your trading strategy must give you an edge because without an advantage, even if you have the best risk management, discipline, and psychology, you’ll still be a losing trader.

And this edge is what the Gunbot StepGrid strategy gives you!

Gunthar’s legendary “Gunbot the Way I Run it” article that we haven’t see since Gunbot V11 is out again. Gunthar got inspired one more time and took the time to explain how he runs Gunbot.

This time he and Pim tuned a unique strategy and named it “The Gunbot stepGrid Strategy,” this strategy follows the main principles as the SpotGrid strategy.

The StepGrid strategy capitalizes on the predictability of the crypto markets, following the price range only without any other trading indicator.

Before we begin, let me give you three remarkable facts about “Price Action.”

1. Price action trading is about understanding the imbalance between buying and selling pressure so you can identify trading opportunities and make a profit.

2. As a price action trader, price is king, and everything else is secondary.

3. Price action trading is not only a strategy but a structure for trading in different market conditions.

The strategy logic is simple: BUY when the coin price goes down by “x” amount of price value (for example, $500) and SELL when the price goes up by the same “x” value.

For example, the bot can buy $250 worth of bitcoin every time the price drops $500 in value and sell $250 worth of bitcoin every time the price rises $500 in value.

Math calculation based on the above example:

• $250 worth of bitcoin at a price of 34k is equal to 0.00735394BTC

• 0.00735394BTC sold at 34.5k is equal to $253.67

• Net Profit 1.46%

If you don’t want to run out of money, you have to calculate your TRADING_LIMIT based on your wallet balance and consider the price of bitcoin as if it would have dumped a lot.

Here’s how to calculate your TRADING_LIMIT based on your Total Balance:

Divide the price by the step and then divide your Total Balance by the result, like this: Wallet Balance/(price/step)

For example: With a wallet balance of 10k USD and a bitcoin price at 35k, a “STEP” of 500 dollars would give you 142 dollars max of TRADING_LIMIT

The idea is to keep some balance to cover if Bitcoin drops by a lot, so, regardless of how much the bitcoin price goes down, you can keep running your bot without running out of money.

Keeping Gunbot running means you will be able to trade continuously, taking advantage of the perpetual swinging of the USDT/BTC pair.

Gunbot StepGrid Strategy Keypoints

• Calculate your Trading Limit so you never run out of money, or your bot gets stuck because you got useless bags.

• Run this strategy only on coins you consider spendable “money.” In other words, don’t go for “Super-Shitcoins” 🙂

• If you run out of money because you didn’t calculate your TRADING_LIMIT with the above formula, do not add more funds to your balance. If you’re in a position, the bot will start selling at a loss because this strategy doesn’t consider BREAK EVEN unless the price is above your BREAK EVEN price.

The automatic trailing from the SpotGrid strategy family is now available on the Gunbot StepGrid strategy, too, on both buy and sell orders. Pim developed a system that would adjust your STEP automatically as the pair swinging range contracts or expand.

The crypto trading bot strategy calculates the STEP value automatically, no need for any unique settings. It continuously watches that specific pair volatility and adjusts the STEP internally to fix the price action and trade.

If you want to run manual steps, set AUTO_STEP_SIZE: “false” and enter a STEP_SIZE price value. However, trailing is hardcoded for buys and sells in the step grid. It starts trailing every time a step reaches the target.

With ENFORCE_STEP, instead, you can make it respect steps when trailing. It also supports Keep_Quote.

I did my best to explain his Guntharish, but if you want to read the original article, please check Gunbot V23 the Way I run it by Gunthar on BitcoinTalk.

Gunbot Step-Grid Strategy

The Gunbot stepGrid strategy is an advanced price strategy that triggers a “BUY” or “SELL” signal when the price moves above or below your defined step.

You can choose between two-step size options — Auto and Manual, while the trailing price is fully automatic and takes place on every step, either up or down.

Step-Grid is a simple but effective trading strategy. The idea of this strategy is to trade small price movements.

Even if you’re in an overall losing position, the strategy will still make you money by taking advantage of small price increases and sell portions at higher rates than their comparable buy orders.

Unlike most other Gunbot strategies, this strategy has only a few options and doesn’t use confirmation indicators. The step grid method behaves this way because it only needs to confirm that the price has moved in a particular direction.

StepGrid Trading Behavior with Auto Step Size

The “Step-Up” and “Step-Down” are placed close to the last order rate. But if the pair has never traded before, the reference price for the steps is the pair’s price when you started running the strategy.

When the price moves down one step, it automatically starts buying, trailing, and places a buy order for 1x the “Trading Limit” as soon as the trailing finishes.

When the price moves up one step while below break-even, it automatically starts selling, trailing, and places a sell order when the trailing finishes. Below break even, each sell order is 1x the “Trading Limit” in size.

The behavior is the same when the price is above your break-even, but the order quantities can exceed 1x the “Trading Limit.” If the price reaches a complete step above break even, it will sell that bag right away.

When the price increases enough to reach the point where the next buy step is above break-even, the buy step acts as a stop in profit for positions bigger than 4x the “Trading Limit.”

Gunbot will buy again when it reaches the next purchase or sell step, and you’re in no position.

The bot will continue to accumulate until it reaches the “Max Buy Count” or when it runs out of available funds. Every new buy order will lower the break-even price.

Managing your balance is critical for your success with the Gunbot StepGrid strategy. Make sure you can afford the intended number of buy orders.

The following trading targets are constantly visible on your Gunbot GUI charts. Remember that the target lines keep moving all the time, and they represent the current targets.

How to Create a Gunbot StepGrid Strategy

On your Gunbot GUI, click on the “Strategies” tab to create a new strategy, name it, and select stepGrid as your BUY and SELL methods, then click “Create.”

Gunbot StepGrid Strategy Basic Settings

Here are the three step-grid strategy basic settings:

Trading Limit: This is the amount of Base currency you want to invest per buy order.

On the USDT-BTC pair, a trading limit of 100 means that you want to invest $100 every time it creates a new buy order. Always make sure you’re trading limit value is higher than the Minimum Volume to Sell.

Min Volume to Sell: The value you add here will set the limit of your sell orders. You should set it to the minimum tradeable size according to your chosen exchange.

Gunbot won’t sell if your Quote coin value is lower than your defined amount. The bot will ignore small untradeable balances.

Max Buy Count: Limits how many buy orders are allowed. Setting a max buy count of 999 means that the bot will do 999 buy orders in a row. When you reach the specified maximum, the strategy will go into “Sell Mode.”

There are a few more settings that you can optionally use with this strategy, described below.

Gunbot StepGrid Strategy Supplemental Settings

Here are a few extra settings you can implement with the step grid strategy.

Auto Step Size: When you switch it to Enabled, it will use automatic step size for your BUY and SELL orders.

Auto step size attempts to determine the steps that work. When you’re not in a position, the auto step size is smaller than when you’re in a trading position. When disabled, you can set a manual step size instead.

Step Size: This is the manual step size of your BUY and SELL orders.Sets a manual step size, and the value represents a price. Setting 100 on USDT-BTC makes the bot trade each time the price moves by 100 USDT.

Enforce Step Size: When you enable this setting, it will restrict BUY and SELL trailing to step size.

When enabled, the price trailing cannot trigger trades at rates lower than the current step size. This StepGrid setting ensures a minimum distance between orders.

Stop After Next Sell: To stop trading a pair after the position closes.

The bot will not place buy orders when there is no balance left to sell when this setting is enabled. Averaging down the current position continues, and partial sell orders do not make the bot stop afterward.

Period: This is the time frame you wish to trade; it sets the chart interval. The default period is 15. Make sure only to use supported period values.​

SMA Period: You set how many candles you want to use to calculate the strategy support and resistance levels.

The default to calculate support and resistance is 50 candles. This strategy uses support and resistance to determine suitable trailing ranges.

ATR Period: How many candles Gunbot will use for calculating the Average True Range (ATR)

ATR is used to determine the auto step size; the default is setting is to use a 50-period ATR. Using lower values might cause the step size to swing too fast.

Keep Quote: This setting allows you to hold some of your earned crypto and not trade with it.​When you set a “Keep Quote” value higher than 0, Gunbot will hold your set amount when the next sell order happens.

Extra stepGrid Parameters

You can set Buy and Sell “enable” or “disable” in the pair override section, and if you enable “Watch Mode,” the bot won’t buy or sell.

You don’t need any other settings for the StepGrid strategy. All the system requires to function correctly is written above. If there is any change, this article will reflect the newest info.

Again, feel free to check the Gunbot wiki if you have any doubts.

Autoconfig Controller for the stepGrid strategy

FREE stepGrid Controller: Autonomous Spot Trading Strategy by Boekenbox

Pim has uploaded a dynamic version of the Step-Grid strategy preconfigured using Autoconfig.

Your download will include many pre-made configurations for you to use in spot exchanges like Binance, Huobi, Kraken, Kucoin, and Gunthy Mex. All you have to do is add your Gunthy wallet in the config js file and choose how many pairs you want to trade.

Once you set it up, the autoconfig controller will start scanning for volatile pairs and adding them automatically. Then the bot will trade with them using the native stepGrid strategy.

The stepGrid controller monitors what’s happening in the crypto market. If, for example, a currency is doing poorly, it will replace it with a better-performing one so you can always make the most profitable trading with the best-performing pairs of your chosen exchange.

You can trade multiple base currencies with ease. The Step Grid control will automatically prevent the overlap between pairs, so you can deal with them even if they are present in different markets—for example, USDT-BTC, USDT-ETH, BTC-ETH, etc.

The StepGrid controller supports USDT, BUSD, USDC, USD, EUR, BTC, ETH, BNB, and you can compound your “Trading Limit,” keep reserve or increase the (TL) trading limit. This method also includes Stop Loss as a risk management choice.

All that and much more is available for you to download for FREE from the Gunthy Marketplace. Click here to Download your copy of the StepGrid strategy controller.

Pointers You Should Keep in Mind when using this Gunbot Strategy:

• Due to how compounding operates, it is difficult for the bot to combine trades with different limits on the same account.

• Be aware that manual trading on the same account with the same base currency can lead your strategy to behave unusually.

• Remember that this strategy works with Stop Loss, so when a stop-loss is used in this setup, it can sometimes lead to lost sell orders.

• Note that trading behavior might become unpredictable in shallow volume markets. To keep the trading behavior in check, use the “force step size” option using the stepGrid strategy.

• The included AutoConfig jobs must handle all pairs on the exchange.

Extra Warning Notes:

This is an excellent opportunity for a financial lesson! 🙂 Always keep some of your funds in reserve. It is good to be wise and prepared for any future market surprises.

Here’s a tip: Try to keep the number of pairs you buy to a minimum. This way, your bot will process your pairs faster and more frequently.

Don’t freak out if you see a lot of pairs being added to the strategy. This is OK because Gunbot won’t trade all of them, don’t worry, that’s how the autoconfig controller is expected to behave.

Gunbot stepGridHedge Strategy

The Gunbot Step Grid Hedge strategy is still in its beta testing phase and is currently available to trade on the futures market. To use the stepGrid Hedge strategy, you need to be running the Gunbot “v23.1.2 beta” build or newer.

StepGridHedge Logic and Expected Behavior

The (SGH) strategy uses the same order triggers as stepGrid does on spot markets but differently.

Imagine the stepGrid strategy trading futures longs. When it encounters a sell step below the average entry price (which would cause a loss on the long side), it will execute a trade on the short side.

The same principle works on basically any situation the step Grid can encounter. It fires an order in the direction that is either profitable or will not incur a loss by firing the order.

Additionally, some “not configurable” methods prevent DCA orders from trying not to accumulate too much too fast.

The stepGridhedge strategy gets more profitable once it has time to accumulate positions bigger than a number of your Trading Limit (TL), which it will close in many parts – ever further away from your average entry.

Long periods of sideways trading are the main enemy of this strategy because there is a risk of accumulating too much around similar prices.

How to configure the trading pairs on the Gunbot stepGridHedge strategy

The short pair is only there to collect data and visualize trades. The settings for the “short” trading pair are to make sure it never trades.

The long pair does the actual trading on both sides. Always make sure to have the short pair before the long trading pair.

There is no GUI strategy editor yet for the stepGridHedge strategy, so start by setting both the short and long pair on your config.js file, as you see in the picture below.

As you see in the image above, the settings are based on a 500 USDT test wallet with no other pairs active. So use that as a reference so you can adjust your settings based on your wallet size and preferences.

“TRADING_LIMIT“: Add a numeric value in USDT. This TL is the regular amount per initial or DCA order. The first few orders can sometimes use 1.5x or 2x this amount.

“MAX_BUY_COUNT“: This is the maximum position size (measured in TL) per side. Bot won’t add more to the position if this threshold is reached.

“MAX_UNHEDGED“: This is the maximum unhedged position size, the imbalance between long and short. For example, if the “long” is 20x your TL and the short is 5x your TL, there is a 15x TL (Trading Limit) unhedged. Bot won’t add more to the position if this threshold is reached.

“STOP_AFTER_CLOSE_LONG“: Set to true, but it doesn’t open a new long after closing one.

“STOP_AFTER_CLOSE_SHORT“: Set to true, but it doesn’t open a new short after closing one.

Other stepGrid specific settings like manual step size also work precisely the same way as on the stepGrid strategy for spot trading.

There’s one caution with order sizes on Bybit, the min order size is rather big and makes it hard to estimate how much TL a position currently is.

For example, if ETH is trading at $3000 and the minimum order size is 0.01 ETH in value, then a trading limit of $31 or $35 will both result in buying 0.01 ETH.

This makes MAX BUY COUNT and MAX UNHEDGED parameters a bit imprecise when trading with a trading limit close to the minimum order size. You can see the current counts in the console logs.

Again, the Gunbot stepGridHedge strategy is in beta. You won’t be able to use it with the stable release yet. Keep coming back to check for new info to be released as the strategy gets updated.

Gunbot StepGrid Strategy Conclusion

This Gunbot strategy gives you a chance to profit from the market predictability by following the price range only without any other trading indicator.

When you use price action to time your entries and exits, you’ll be faster than someone who relies on indicators.

Here are some benefits of a Price Action Strategy

• The price will always give you an objective view of the market.

• There’s no need to be stuck doing fundamental or news analysis because all you care about is the price.

• You don’t need to use trading indicators, only “Price.”

• You can time your entries and exits easier.

• You have a structure to trade in different market conditions.

• As long as you calculate your “Trading Limit” correctly, it would help if you didn’t run out of funds and kept trading continuously. (unless BTC goes to Zero) 🙂

Very Important: Remember to calculate your Trading Limit! Leave some room to give you enough buying cushion. Or set a pair with low TL to run for a couple of weeks to get a feeling of how many buys to expect because if you miss a step and add more base later, it will sell the missing step at a loss.

If you want to change your Trading Limit after a while, do it when you don’t have a bag you need to sell.

Last but not least, DON’T FORGET: This is not trading advice. My advice is, Do Not Trade with your Food Money, Never Trade what you’re not willing to lose, manage your risk, keep calm, and Gunbot.

That’s it for now, but don’t forget to check this article from time to time, as some of the Gunbot StepGrid strategy parameters may change over time.

Do you want to Trade with Gunbot successfully? Get it Now, so you can Profit!

The fundamental information any new crypto trader should know about.

This article was originally published first at cryptodroi.com

There’s no doubt you’ve probably heard about cryptocurrencies a couple of times over. So, at this point, you are probably thinking about how to make a buck or two with it…

What is this cost-effective way to make money called crypto trading?

Cryptocurrency trading used to be taboo and, sadly, has been used as a way to scam people into putting their money into something they don’t understand. The common misconception about crypto trading is that it is overly complicated and that only a few “gifted” traders are the only ones who make a living.

ALTHOUGH IT REALLY IS COMPLICATED, THIS DOES NOT MEAN IT IS IMPOSSIBLE TO UNDERSTAND.

Generally, when people put their minds to something and follow a process, they will still get to their destination no matter how fast or slow it might take. Crypto trading has been romanticized as of late as some young millionaires make loads of money working “when they want to.” However, this isn’t really the case.

When it comes to trading, knowledge should trump emotion. Many things could get in the way of your trading strategies, like excitement, fear, and general anxiety, and that’s ok, but know this…

When it comes to cryptocurrency trading, the one making the decisions should have a winner’s mindset.

You need to understand that not everyone makes money in cryptocurrency trading. In fact, there have been thousands of people who sold their assets for capital to try crypto trading and lost big time.

But you should also understand this simple concept:

WHEN SOMEONE LOSES, SOMEONE ELSE WINS. WHEN SOMEONE SELLS, SOMEONE BUYS.

I know it may sound cheesy, but the point here is to set your positive mindset and use it to gain understanding to join the winner’s circle.

With a fine-tuned trading strategy and a good knowledge of cryptocurrency trading, you will be able to increase wins and minimize the effect of your losses.

And that’s what I’m trying to help you with, keep reading…

What is Trading in General

Trading basically involves buying and selling assets. It is a fundamental economic concept that relies deeply on the trader’s understanding of supply and demand.

While trading is much easier to understand when done with tangible assets, intangible assets like cryptocurrency share the same concept.

Everything in business is about supply and demand, just like in crypto trading. When demand for something is high, the price usually goes up, and when a demand for something is low, the price usually goes down.

The key is to know when the price should go up and when it is expected to go down. This is done by reading and understanding trends.

TRADING BASICALLY INVOLVES PLAYING ALONG THE LINES OF SUPPLY AND DEMAND.

Let’s say in 2020, there was a regular demand for smartphones. When the pandemic happened, everyone got stuck at home, and when this happened, people started buying new devices.

This then resulted in the stock prices of technology companies going up.

There are several different markets, and cryptocurrency is just one of them. These markets include bonds, stocks, and currency in general. Delving deeper into the trading world would unlock more complicated markets like Forex, margin products, futures, options, and a lot of others.

For the sake of this article, and to help you absorb more info fast, I will keep it simple with the most basic terms I believe beginner crypto traders should learn first…

While trading is generally buying and selling, there are two different trading approaches: Short-Term trading and Long-Term trading.

Here’s the first concept you’ll have to understand to learn about crypto trading.

Crypto Trading Short-term

As the name itself reveals, short-term trading deals in shorter time periods. Short-term traders usually enter and exit riding trends instead of looking towards the long-term growth of their assets. Like everything, there are pros and cons to short-term trading, and the trader really has to decide for themselves if they are capable of doing so.

• Short Term Trading Pros

Quicker turnaround. Since short-term traders are not thinking about their assets’ long-term value, they could generally buy low and sell high depending on their assets’ volatility.

When we say volatility, this means how much the price of the asset fluctuates. The more an asset fluctuates, the more beneficial for short-term traders since they can buy low and sell high despite the stock’s general performance.

• Short Term Trading Cons

More research is required to see when the price is meager and when the price is really high. Short-term trading can also be dangerous in cryptocurrency trading, especially for those with insufficient capital to sustain the loss itself.

It would be hard for those trading on the minimum to go into short-term trading, especially in extreme volatility.

Short-term trading styles include different preferences like day trading, swing trading, scalping, and of course, automated trading; the common denominator here is that your trading decisions will be based purely on Technical Analysis.

Crypto Trading Long-term

Long-term trading is usually fit for the classic investor. Whether a cryptocurrency will go up or not, long-term trading usually puts a significant sum of money in the cryptocurrency with the trust and belief that it will go up one day.

Last March 15, 2020, Bitcoin was around $5K, but on the 13th of March 2021, Bitcoin went up to over $60K. For those that were long-term traders, owning a single Bitcoin would make them extremely profitable.

• Long Term Trading Pros

Long-term traders aren’t affected by market volatility and generally won’t need to panic when it goes up or down in a week. Depending on how long they trade, long-term traders can reap a hefty profit, especially if the price does go up.

Of course, it is also important to note that the price does not always go up 100% of the time, and depending on the timeline of the long-term trader, there is still risk involved.

• Long Term Trading Cons

The disadvantage of long-term trading is that the investor has to put in a large amount of capital for the whole investment to be worth it.

Putting a small capital might not be worth the time and could also be risky since their investment could be eaten up when the price goes lower than initially bought.

A long-term trader is basically an investor, or in crypto, you may be hearing the term HODLER :); the most valuable piece of information an investor need is the asset’s fundamental analysis case would include research information about the chosen coin.

Crypto Trading Technical Analysis

The technical analysis revolves around the idea that historical data could predict how the stock would perform in the future. The interesting thing about technical analysis is that it does not look at the asset’s intrinsic value but rather how its price will perform.

This is very important when it comes to crypto trading since no tangible object or company is attached to the asset. While the term might seem extremely complicated, learning the different theories, charts, and other patterns one by one could be a potent tool in cryptocurrency trading.

Your main focus here is to analyze how the market is moving, mostly based on the price and volume information you can read from the charts; that’s how you will identify a trading opportunity.

Unlike an investor, as a crypto trader, you will be focused on the crypto asset price and assume it already reflects all the information accessible to the public.

Here are the 3 main assumptions of a Technical Analyst:

1. The market discounts everything.

2. Price moves in trends.

3. History tends to repeat itself.

You can learn more later if you want to, but don’t get “information-overloaded,” anyways, here’s a good article on Technical Analysis if you want to learn more.

Technical Analysis is not perfect. It definitely can not tell you the future, but you don’t need to make money; all you need is a strategy with a high probability of winning and consistency.

More on that later. Let me show you 2 key components you should learn how to identify in a chart…

Crypto Trading Support and Resistance

This is a fundamental concept that deals with whether the asset is going up or going down. The support refers to the minimum price that the asset drops to in a certain time period.

The trading charts show patterns, and you can see the “support” when you look at how low the price generally goes for a period of time.

On the other hand, resistance refers to how high the price usually goes before it goes down again.

Basically, identifying the patterns and when the patterns are changing is an example of technical analysis in play. When the asset goes above the resistance, it could either go up or down depending on the data.

Here’s an example of the Support and Resistance levels calculated by Gunbot and applied to the trading chart.

Notice that in Gunbot, support and resistance are not fixed targets.

Support and resistance are just an example of a technical analysis concept. This could also be considered one of the simplest concepts, and as a new crypto trader, you should slowly move up the ladder to the more complicated ones you learn.

Crypto Trading Market Trends

This is generally the way that an asset is going, whether up or down. In technical analysis, it is important to understand how the trend is going and where it leads.

THE TREND WILL GUIDE YOUR BUYING AND SELLING DECISIONS.

Secondary trends give you insights into the market trend and leading, but the important thing to understand is the dominant trends.

• Bull Market: This means that the asset price is going up.

• Bear Market: This means that the asset price is going down.

• Sideways Market: AKA Horizontal Trend. There isn’t a clear direction for the trend.

The best way for you to check the primary trend of a particular pair is by looking at higher time frames in a chart.

Example of BTC-USD up-trending based on a 1 Day Time Frame chart on Tradingview.

So, regardless of what time frame you choose to trade BTC, you got confirmation that Bitcoin is trending up based on the above pic.

Now you need to check on what market you will be trading…

Crypto Trading on the Spot Market

A spot market basically means a market that makes exchanges on the spot. While most people might think of as common sense, it is important to specify what market is being traded since other markets are also in play.

A future, for example, delivers the assets later on when the contract would expire. Since the trade is being made in real-time, the trades’ price is also valued in real-time.

WHEN WE’RE TALKING ABOUT THE SPOT PRICE, THIS MEANS THE REAL-TIME MARKET PRICE.

There are two main kinds of spot markets, the Over-the-Counter (OTC) and organized market exchange; these are usually centralized crypto exchanges like Coinbase, Binance, Beaxy, etc.

For the most part, especially if you live in the USA, you should only focus on the spot market; most crypto traders started their trading careers anyway.

I’m not saying you could not learn about margin or futures, and certainly, you could make more money because you would be using leverage and be aware that you can get liquidated in a split second if you don’t know what you’re doing.

**Learn more about Gunbot Margin and Futures Trading. **

The only drawback of trading on the spot market is that you can only trade with your capital, but it is better this way, especially when learning.

The good news is, you can start with low capital and trade on most crypto exchanges.

So, let’s create a trading plan now…

Making a Crypto Trading Strategy.

If you fail to plan, you plan to fail. A trading strategy is basically a plan based on data regarding when to buy, when to sell, when to hold, and possibly for how long before deciding.

There are numerous trading strategies you can use, and they revolve around trading indicators.

An indicator represents data showing you what the data means in terms of a particular theory used.

An example of this is the Moving Average. This indicator basically follows where the general average moves either up or down despite the dips or spikes.

IN CRYPTO TRADING, YOU DO NOT HAVE TO LEARN ALL OF THE STRATEGIES OR THE INDICATORS, BUT RATHER WHICH STRATEGY WORKS BETTER FOR YOU.

So, whether you’re a day trader, doing swing trading, or scalping, you need a solid plan with an edge that will help you win most of the time, that plan is your strategy, and you will base your decisions on the data you see printed on a chart.

Since we already talked about Support and Resistance, let me use that as an example strategy.

This is a simple example; you will enter the trade (BUY) at the support and exit (SELL) at the resistance level.

If you’re using a crypto trading bot, all you have to do is define those values on your strategy, and the bot will execute those commands for you.

That is just an example of one out of many different strategies you could use; keep in mind “there’s not the best strategy” is what works better for you based on your trading preferences and risk tolerance.

And obviously, a sound money management approach is critical, so here we go…

Why is Risk Management Important for Crypto Trading?

Risk management, from the name itself, is the process of managing risk. Risk management differs from trader to trader as different types of traders have different appetites for risk.

While bearish prices don’t easily shake some traders, others are more easily swayed and sometimes tempted to sell at a loss.

Of course, depending on whether or not the technical analysis or trading strategies were correct, there is also a time when a cut loss should be executed.

Some people ride the risks, and when they lose, they lose everything; that’s why making a trading strategy on when to cut losses and when to sell is very important.

Think of it this way, let’s say you bought an asset at a certain price and let it ride. It performed extremely well, and you didn’t sell despite the technical analysis pointing towards selling.

After you decided not to sell, the price drastically dropped, plummeting into the ground, leaving you with a bag of coins and a meager price value.

THIS OFTEN HAPPENS IN CRYPTO TRADING, SO YOU GOT TO BE READY BEFORE YOU EVEN BUY.

Learning when to take profits and cut your losses is very important because, in cryptocurrency trading, the prices are very volatile.

Stay away from Pumps and Dumps, and do not allow the Fear Of Missing Out to cloud your decisions because it will cost you.

Crypto Trading – Scalping

You can do scalping with the smallest timeframes as these short-term traders aim to gain small profits with every movement.

Although the profits might not even amount to 1% at times, these trades’ repetitiveness still amounts to a significant profit.

While it seems simple, scalping is never a beginner’s strategy and requires an intense understanding of how crypto trading works.

TECHNICAL ANALYSIS IS CRITICAL TO SCALPERS’ SUCCESS, AND THEY USUALLY FUNCTION WITHIN A VERY CALCULATED TIMEFRAME.

The easiest way for a new crypto trader to experience scalping is through automated crypto trading; yes, I recommend Gunbot for scalping if you don’t have the skills yet.

A human is no match for a bot when it comes to repetitive tasks and timely execution.

Besides, you will be learning and using strategies developed specifically to get in and get out fast for a profit.

But let me explain to you a few more basic trading concepts…

The Cryptocurrency Trading Process

When you place an order, and it doesn’t get filled, an “order book” is then used to store the orders organized by “price” until fulfilled.

Let’s say you put an order at a certain price and there is no one wanting to buy at that price; the exchange’s trading engine will then place that order in the order book until it matches another order or gets canceled by you.

A matching engine system is used to match the order book’s orders when it comes to crypto exchanges. The system is responsible for making sure that the trades are carried out.

Here are a few other crypto trading terms you need to understand:

Market Order

This is what the buying or selling process is called. Basically, putting a market order means putting an action to buy or to sell instantly.

Limit Order

As the word suggests, limits refer to a limit or a price point that the order won’t go beyond.

Limit buy orders will be executed when the price reaches the limit price or lower, and a limit sell order will be executed when the price reaches the limit price or higher.

Stop-Loss Order

This is a decision about risk management. Putting a stop-loss means selling when the price reaches a certain level to avoid further losses.

While the dreams of bullish prices are enough to entice most traders, the thought of handling losses might be something that you should avoid by all means.

A STOP-LOSS PUTS A LIMIT ON HOW MUCH YOU CAN LOSE IN ONE ORDER.

Maker and taker: What’s the Difference?

A trader will become a maker when they place an order that does not get fulfilled immediately and is instead added to the order book. Since the order contributes to the order book’s liquidity, the person putting the order will then be called a “maker” of liquidity.

A trader will become a taker when they place an order that does get fulfilled immediately and takes off an existing order from the order book. Since the trader is taking out order book liquidity, the trader is considered a “taker.”

Bid-Ask Spread

This refers to the difference between the highest bid or buy order and the lowest bid or sell order.

Basically, a trader would want to trade within the spaces in between. Setting the boundaries depends on how high a buyer is willing to buy and how low a seller is willing to sell.

Orders within this spread indicate the supply and demand of the cryptocurrency and attest to the market’s liquidity. In general, the smaller the market liquidity is, the more liquid the cryptocurrency is.

How to Make Money Crypto Trading

Making money through crypto trading in general means buying low and selling high.

THE GAP BETWEEN YOUR BUYING PRICE AND YOUR SELLING PRICE IS BASICALLY WHAT YOU’LL EARN.

Since there are many players in the cryptocurrency trading space, their buying prices and prices could differ.

What’s low for one might be high for others, which is essential to know when understanding market psychology.

While cryptocurrency trading can be dangerous, it is also very profitable due to the massive differences in the highs and lows or, rather, great volatility.

When traders become more familiar with cryptocurrency trading, they will assess when the price is most likely to go up and when the price will most likely go down.

Trading is oftentimes mistaken for gambling. However, successful traders show that it is not gambling at all and that it takes a massive amount of research and strategy building to make a profit out of crypto trading.

Read How Much Money Can You Make Trading with GUNBOT for more details.

It is also important to understand yourself, be sure of your goals, whether you are a long-term trader or a short-term trader, take crypto trading seriously, dedicate enough time to learn this new trade, and I promise you, it will be worth it.

ROOKY TRADERS THINK ABOUT MAKING MONEY. PROFESSIONAL TRADERS THINK ABOUT MANAGING RISKS.

Capitalize on Gunbot Now, so you can cut your learning curve, gain access to an immense wealth of information, and start trading crypto like a pro.

Start thinking like a professional, make your decisions based on data, not on your emotions, and most importantly, keep coming back for more Crypto Trading Articles…