Automated Trading in Cryptocurrencies and Altcoins
There’s been a long standing debate as to whether humans can manually trade the markets anymore. In a time of growing technology, “Algo” traders are a common use in institutional trading. Some theorists are adamant that “Algo traders” have the potential to determine stops and limits placed manually and actively push the market in order to trigger them and eliminate the smaller, retail traders from the market.
Lets rewind though…what are “Algo” traders? algorithmic trading is when algorithms are created within a trading system in order to open and close trades according to specified criteria. Computers are programmed to carry out instructions when markets display certain market characteristics. These algorithms are optimised so that trades are opened and closed in conditions that aim to maximise profits and minimise losses. Typically, these conditions are not identified through manual, human trading and therefore the systems are capable of producing profits at a rate much faster and more consistently than human beings.
There are a number of strategies that can be implemented, from identifying swings in the market to recognising trend formulation, to analysing volumes and more. Typically they allow for arbitrage opportunities where one market might be offering a product or stock or cryptocurrency at a slightly or higher price and the traders takes advantage of these discrepancies.
Obviously these systems have their advantages and disadvantages. While trading bots (when backtested, and set up properly) allow for more consistent, and unemotional trading, they can be extremely expensive and complex to set up. Market characteristics also change constantly and need to be observed in order make the appropriate adjustments to the systems. This being said, if one could harness the power of trading bots, it could be a tool that could make you extremely profitable because it addresses one of the hardest skills that need to be learnt in trading: Discipline and Consistency.
As for theorists who believe algorithmic trading is taking over, fundamentally, successful trading systems are extremely expensive to run and maintain. In turn only major institutions have the funds to invest in such systems and at the same time, what purpose would it serve major institutions to knock out and eliminate retail traders? Retail traders who trade anywhere between 1 to 10 contracts are considered scalpers – not market movers and therefore they cannot pose any threat to institutional traders.
The cryptocurrency trading scene is extremely young, with very few institutions which are licensed to offer legitimate trading products. Currently only Bitcoin futures exist to institutional traders. However, there are a number of platforms and exchanges, although unregulated, that allow brilliant opportunities to capitalise on the cryptocurrency volatility. If you believe you have the skill to create and instruct a trading bot to execute trades on your behalf then maybe it isn’t a bad idea to consider cryptocurrency trading software that can give you the tools to create your own “Algo’s trading system”. We’ve taken the time to review a few Cryptocurrency Trading Systems….
Haasbot was started by a man by the name of Stephen De Haas, along with a team of developers and marketers. Their product came onto the market around earlier 2015 and provides its users with a range of trading bots which are customisable to perform various functions. They have the basic trading bot which can be programmed to use a number of indicators such as Stochastic Oscillators, MACD’s, Exponential Moving indicators and SMA’s as well. You can make use of Candlestick patterns.
They also provide arbitrage bots which take advantage of price discrepancies on various exchanges within numerous cryptocurrency pairs. The bots are able to take into account fees involved when exchanging on the platform in order to make sure your profit isn’t eroded by the fee.
It’s fair to say that Haasbot has been targeted at your typical trader who has had previous exposure to the markets and to trading. Its many functions and uses may be overwhelming to the beginner, however this is not to say that the system is difficult for new users to get used to.
Haasbot 2.0 provides some great new features including the use of Elliot waves, Fibonacci Levels and Ichiclouds. Its also supported on Bitstamp, cex.io, Bitfinex, and Kraken.
The Software is not ready for iOS and Android devices as yet but apparently plans have been put in place to implement it on these operating systems in the near future. Overall Haasbot has created a brilliant product and fellow trading bots have a long way to go in order to compete.
Disclaimer: This article represents the experience of the reviewer and is not a recommendation or financial advice. Please do your own extensive research before considering investing any funds.