Over the last couple of years, cryptocurrency trading volumes have soared, due to the inherent profitability associated with buying low and selling high.
However, day-trading can prove to be quite complicated, given the constant volatility associated with cryptocurrency prices, alongside the huge number of coins that can be exchanged for a profit. No trader can hope to keep track of everything.
As such, the state of the market has led to the development and rising popularity of automated cryptocurrency trading bots powered by artificial intelligence (AI), such as Bitsgap. This platform provides a series of crypto trading bots, while also serving as a portfolio management platform. Every day, thousands of users rely on Bitsgap in order to further maximize their daily trading returns.
Trading bots are generally based on a series of advanced algorithms that constantly gauge the state of the market, and thereby place orders based on a predicted outcome. In the case of Bitsgap, the platform is powered by the GRID algorithm, which works by proportionately distributing investments within a user-defined range through the usage of limit orders. Thus, every time the limit order is executed by the system, GRID places another sell order at a value that’s slightly above the current market price.
In the case of sell limit orders, once the previous order is executed, another buy limit order is made by Bitsgap at a value that’s slightly below the market-wide price. The system is very much capable of trading 24/7, as long as digital currency prices remain within the user’s predefined value range.
One of the underlying secrets behind Bitsgap’s success is its high-frequency trading pace, created through the narrow grid spacing setup employed by the platform’s automated bots – in order words, limit orders are placed almost instantaneously for certain trading pairs. Thousands of trades can be carried out for the same pair within a week.
The platform also employs the concept of back-testing – a feature which serves the purpose of actively optimizing the trading bot, in order to ensure that it succeeds both on a bull market, but also when prices drop. Thus, machine learning is leveraged in this case, as the algorithm studies historical data in an attempt to learn how to maximize profitability within the pre-defined risk limits.
The data is also used by actual developers to further improve the architecture of the trading bot. Back-testing is utilized by both portfolio managers and traders in order to gauge the best digital currency trading pairs, which are capable of generating profit within users’ personalized preferences.
At this point in time, industry research has concluded that trading bots are best put to use when the market finds itself in a period of sideways stagnation, or during an uptrend/bull run. Thus, during times of sideways trends, cryptocurrency holders usually generate no profit, yet bot-based investments can take advantage of minimal price differences in order to generate actual returns.
Passive ownership of digital currency during market stagnation can be put to good use by integrating Bitsgap automation, which is sure to put one’s returns above 1%. In fact, research coordinated by Bitsgap has even shown that during a period of several months, HODLERs generated a return of 5%, whereas the bot was able to create a profit of over 15%.
Based on everything that has been highlighted so far, the Bitsgap automated trading algorithm can absolutely be used to generate a constant stream of revenue, even in times of sideways markets, when prices remain fairly stable, similarly to trading volumes (which may even drop).
The algorithm is well-aware of basic economic laws, such as buy low/sell high, thus actively following such principles when price swings occur. Other features such as exit strategies, trailing up, take profit, or stop-loss are also integrated within the bot, to ensure optimal trader safety and a higher return-on-investment (ROI).