Crypto trading bots seem like a magical money machine, but how to create crypto trading bot is not as complex as its sounds. Here this thread simplifies roadmap to get you started:
- Choose your weapon (strategy)
1. Trend Following - Buy when the price goes up, sell when it falls
2. Mean Reversion - Buy when the price is low, sell when it is high
3. Arbitrage - Exploit price differences between crypto exchange
- Pick your tools (trading bot indicators)
1. Moving Average Convergence Divergence (MACD) - Identifies buy/sell signals by comparing two moving averages
2. Relative Strength Index (RSI) - Shows if a currency is overbought or oversold
3. Bollinger bands - Measure price discrepancies, indicates potential breakouts or pullbacks.
- Code your battle plan
1. Python
2. JavaScript
3. Readily available platform
- Backtesting
1. Execute your logic of the bot on historical data to see how it would have performed.
2. Adjust your strategy and indicators according to the results.
3. Backtesting is not a guarantee, but it assist to eradicate live market surprises.
- Get enter into the arena
1. Connect your trading bot to crypto exchange using API (like key and lock for secure communication).
2. Start with small investment and scrutinize your trading bot closely.
3. Keep in mind that the market of the crypto is unpredictable, so adjust your crypto trading strategies according to the real-time performance
Additional tips offered by pro-traders:
- Risk management is the key - Set stop-loss orders to limit potential losses
- Don't overcomplicate - Initiate with simple and add complexity as you learn gradually.
- Community is your pal - Learn from proficient bot creators in online forums and communities.
- https://maticz.com/how-to-create-a-crypto-trading-bot