While us crypto enthusiasts have the best of intentions, we don’t always have the time we would like to dedicate to trading and building our portfolio. Not only is time an issue, actually our reactions to ever-changing market prices can’t always be what we want them to be, and this can manifest itself in us not
getting the best market rate that we would like for our crypto. Add these two complexities together, and there is a need for the automation of trading that solves both of these issues. The solution comes in the form of Trading Bots.
Trading Bots are a hugely valuable tool to traders who are seeking a way to capitalize on the direction of the market, whilst simultaneously not having enough time to dedicate to their trading. In this brief article, we will explain how they work, who they’re useful to and the way in which they can be incorporated into your trading strategy.
Think about a live candlestick chart (preferably on ZB, but we’ll forgive you if it’s on another exchange). Prices constantly changing, charts jumping around, candlesticks in green and red, long and short, and token values updating frequently and consistently. It can be a lot to take in! To that end, by the time you look to complete a trade on a cryptocurrency, at the price you are looking for, the chances are you won’tcomplete the transaction at that price as it will have changed while you actually clicked ‘confirm’. This can make the market difficult to take full advantage of, particularly when you’re only in it for the short term and you need to strike while you can.
Crypto platforms know all too well about this kind of problem, and that’s what gave rise to the Trading Bot. Trading Bots automate trading to the extent that they would actually make you more money than if you were to simply hold a position, giving traders an opportunity to obtain returns on their investments with minimal effort. At the same time, it solves the problem of having to keep the closest of eyes on crypto markets and constantly buying and selling. Therefore, you can leave the trading of your positions
to the complex algorithms that read the market based on the conditions that you pre-set for the Bot to operate within.
Types of trading bot on ZB
ZB has three Trading Bots on its platform — Classic, Positive, and Reverse. Positive Trading Bots are for the optimistic traders, who expect the market they’re trading in to increase in value over the short term. Reverse Trading Bots are for the short sellers, who expect the market to go the other way. The Classic Bot is for generally sideways markets that may not be going in one particular direction but have a bit of volatility in them. Trading bots operate within ‘grids’ on ZB, and when setting up your bot you will collaborate how many ‘grids’ are to be added to the automation. Notably too, you will also set a price range that you want the bot to operate within, giving you total autonomy over how it is to trade and in which parameters.
When dealing in the world of Trading Bots, you may come across the term ‘Grid’. You certainly will on ZB, as this is the type of Trading Bot that the platform specializes in. The amount of Grids added to your Trading Bot will determine how many times your Bot will complete a trade. You can consider Grids to be the horizontal lines across a trading screen, and the market price will always be sat on one of these lines. When the market price goes up, it moves up a ‘Grid’ — and the trading bot will sell your position based on this movement. Say the price then goes down, and the market price sits on a new grid line (below its previous line), the trading bot buys the new position at a lower price to its previous one. Importantly, the trading bot just made you a small chunk of profit — it sold your position as the price went up, and bought it back for cheaper. Now, say you set your grid to ‘80’, for example, the trading bot will complete trades 80 times. Theoretically, it could then sell your position 40 times, and buy it back at a cheaper price 40 times. All of those gains add up!
As far as who the Trading Bot is most suited towards, there is no set demographic. Provided a trader is comfortable with how the Bot operates, it is available and suited to absolutely anybody that wants to automate their trading.
Crypto traders would be inclined to use a Trading Bot in markets that are regularly changing in price, even in small quantities. This way, the Bot makes the most of its buying and selling instruction to providetraders with the greatest level of returns on live positions. Not only that, the Trading Bot completely automates trading, and this is particularly handy when markets are volatile and not so easy to predict.
Setting up a trading bot on ZB can be completed in a handful of steps. On the ZB Pro app, simply click ‘Trading BOT’ and you’ll be ready to get started.
Trading Bots don’t necessarily have to be your only approach to trading — you could just use one Bot on one market while you’re keeping a closer eye on another. As mentioned previously, Trading Bots are particularly suited to markets that have a bit of bounce in them, leaving opportunities for quick returns on investment. Why not start small and get a trading bot started on a volatile market with a small price limit?