WunderTrading: What is a trading bot?

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The crypto industry is one of the most intense financial environments ever conceived by humanity. It is a rapidly changing ecosystem with hundreds of digital assets. Navigating this space without a single crypto trading bot is quite challenging. You need automation to be successful in this market!

Contemporary automated trading

It seems that just a couple of decades ago, automation was accessible only by the ultra-rich and huge financial institutions. Everything changed with the rapid development of a new global financial market operated over the internet. With brokerage service providers expanding their audiences and including relatively low-income investors, the demand for cheap automation products has grown dramatically.

Modern automation is a service that any retail trader can use. Affordable pricing and flexible customization made trading bots a common tool for a wide range of investors. Since many platforms like WunderTrading started offering advanced products to everyone, even corporate entities moved to using these products utilizing cloud-computing.

How to use algorithmic trading

The whole cryptocurrency market is open for business around the clock. All digital assets are speculative and do not have any purchasable equity behind them. It means that the crypto industry is a perfect environment for bots.

Here are reasons backing up this statement:

• The fundamental analysis is less efficient in an environment where retail traders dictate prices and change evaluation based on the general perception of assets. It makes it easier to use technical indicators to identify good entry points.
• Bots do not need to rest and never stop monitoring the market situation allowing retail traders to utilize advanced trading strategies that can be operational 24/7. Since the crypto market never stops working, it is a great advantage over human traders.
• Thanks to cloud-computing and high-speed connections, buy and sell orders are placed and executed instantly. It gives contemporary automated strategies a big advantage and allows their users outperform the competition by a large margin.
  

How does an automated trading system work? Any bot system uses three distinct components that must be in tune to deliver a consistent performance:

• Signals must be reliable. A signal is a special input from a user or a terminal like TradingView. It works as a trigger for a bot. When it receives a signal, it starts executing its instructions.
• The automation platform must be ready at all times. Companies like WunderTrading use servers with 99.9999% uptime to ensure that their bots react to all signals instantly without a fault.
• Your centralized exchange must be quick! Most CEX platforms have powerful API outlets to guarantee that orders are executed as soon as they are received.

To start running you trading bots, you need to do the following (assuming, you don’t have accounts on aforementioned platforms):

1. Create a new account on TradingView to deploy technical analysis strategies.
2. Create a new account on WunderTrading to create bots.
3. Connect your exchange account to your WunderTrading account.
4. Use the dashboard to launch as many bots as you like.
5. Use the Pine Script and web hooks from TradingView to send signals to your bots.

These steps do not require you to have any technical knowhow. You can simply follow corresponding tutorials on WunderTrading and TradingView to do everything.

Advantages of trading bots

Automation is one of the most powerful instruments available to contemporary retail traders. Since the cryptocurrency market is so intense and changes quickly, human traders often fail to react appropriately and timely to various events that affect the industry.

The vast majority of crypto assets are purely speculative. A good market analysis done with technical indicators is the best way to asses any situation. These assessments produce signals that can be quickly sent to bots and trigger an instant response.

Automation does not make a retail trader successful just by existing, but it can dramatically improve your reaction time and consistency thanks to the following:

• Bots do not need to sleep, eat, or make any pauses. They are never distracted and quickly act when the perfect conditions align in the market.
• A computer never hesitates or otherwise compromises its own decision-making. Human traders do not have the same resilience, determination, and quick-thinking as bots.
• The consistency is the key to success for many day trading and scalping strategies. However, people tend to make errors and trade badly depending on their mood, psychological state, and overall health.
• Contemporary automation products are quite cheap. For example, WunderTrading offers flexible pricing and even offers up to five bots for free to all registered users.

Downsides of trading bots

It may seem that using automation is a perfect answer to all your problems related to crypto investments. However, you should be aware of some disadvantages:

• You cannot control what bots do when you sleep or rest. If your technical analysis strategy is lackluster, it can be detrimental to your portfolio.
• Bots can be fairly expensive if you plan to run hedging strategies like statistical arbitrage, pairs trading, or triangular arbitrage because you need to run hundreds of bots to be successful.
• Despite the general simplicity of the setup process, you need to have some technical knowledge and the willingness to learn basic coding principles.

These disadvantages can be quite challenging to overcome for some retail traders, but we believe that contemporary investors who want to survive and thrive in the crypto market simply cannot do it without using at least some automation. You need to learn how to neutralize these downsides by using reliable strategies on TradingView, calculating your IRR for large-scale operations, and studying basic coding.

In conclusion

A trading bot on WunderTrading is a great tool that should be in the arsenal of any retail trader interested in succeeding in the crypto world. Contemporary bots are better than humans in many ways and provide regular traders with an opportunity to build their own large-scale investment operations without overpaying for consultations and expertise from professionals.

Use the power of community, search for reliable technical analysis tricks, and build automated trading systems capable of delivering consistent profits.