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AltSeason, Automated
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These software programs are designed to execute trades on behalf of the trader. While trading bots can offer a range of benefits to traders, they also come with a number of disadvantages and dangers. Get to know exactly how your bot will work before deciding to automate your crypto trading with a bot.
A crypto portfolio rebalancing strategy can enhance performance and outperform the average by using the filtering technique of a moving average crossover to flag the first moving coins when Altcoin Season conditions are right.
By assigning our team with the task of monitoring the ALT/BTC price spreads on your behalf, you can take advantage of the volatility of the market and we ensure you are positioned to make a profit – and you are not spending all of your time watching charts and analyzing data. Our bots trade cryptocurrency altcoin season trends with the correct strategy making your money work for you, while you’re doing other things.
You’ve probably heard about trading indicators and you’ve been using them without much of a plan. Let’s get specific about how trading indicators can help you better manage risk, find entries and exits and best of all – bring you peace of mind and release you from watching the charts all day.
Trading Indicators can help you make better trading decisions by providing insights into the market’s behavior. And, they can serve to deepen or to correct your own mistaken cognitive biases, so they must be used with care and objective planning.
Trading indicators are used by traders to identify trends and momentum – but when mixed in the wrong way, the result in different potential trading opportunities within the same chart pattern.
For example, one indicator may be showing an uptrend, while another indicator may be showing overbought conditions and flashing a sell signal.
New traders may not know which indicator to trust in which situation, leading to indecision and confusion.
Unexpected short term situations can have a huge impact on the success of what could have been a good a trade.
When unexpected news or events occur, small traders may react too quickly and change their positions because of a sudden but small timeframe price movement in the market. This can make it difficult for small traders learning to manage risk and refrain from over trading.
Four Indicators That Work Together
In this article, we’ll take a closer look at a set of four free trading indicators available with a free tradingview account.
We uncover how they can work together to verify the famous trend change pattern… The 1-2-3 Formation.
We’ll also discuss how they help with better risk control and better profit taking levels.
So, whether you’re new to trading or a seasoned pro, I hope this short introduction to a few free tradingview trading indicators will also help you improve an aspect of your trading strategy!
What Are Trading Indicators?
At the base of it all, indicators are mathematical calculations that are based on a set of data – in our case the price and/or volume of a cryptocurrency, stock or a commodity. An unlimited variety of indicators are used by newbies and professionals to analyze the market’s behavior and to identify potential trading opportunities. Trading indicators can be categorized, and each category provides different variations of insights into the market.
Some of the most common trading indicators include moving averages, bands and channels, candlestick analysis, harmonic patterns, oscillators, pivot points, wave analysis, and trend lines… the list of indicators goes on!
Moving averages are used to identify trends, while oscillators are used to identify momentum. Trend lines are used to identify potential support and resistance levels. Band and channels can identify reversal points and counter-trend signals.
When used together with a trading plan founded on a proven risk control approach, this combination of trading indicators can unlock a new confidence in your entries and exits!
How Do Trading Indicators Work?
Trading indicators work by analyzing past market data to identify trends and potential trading opportunities. They are based on mathematical calculations, and they can be customized to adjust the risk parameters for all Five Stage Of The Trade.
Indicators Work Together
We use indicators as one of the three criteria to identify specific and objective changes in Altcoin each cryptocurrency to build our Crypto Smartwatch AltSeason index.
For example, our popular AltSeason indicator might be set to look at the price of a crypto over the past 30 days.
The indicator then calculates two different exponential moving averages of the price over that period.
Different Types of Trading Indicators
There are many different types of trading indicators, and each one provides different insights into the market. Here are a few of the most common trading indicators and a link to the basic definitions for each.
Moving Averages – Moving averages and Exponential Moving Averages are used to identify trends in the market. They are calculated by taking the average price of a security over a specific period of time.
Oscillators – Oscillators are used to identify momentum in the market. They measure the difference between the current price and a moving average.
Relative Strength Index (RSI) – The RSI is an oscillator that is used to identify overbought and oversold conditions in the market. It measures the strength of a security’s price action over a specific period of time.
Trend Lines – Trend lines one of the many chart patterns that can be used to identify potential support and resistance levels in the market. Trendlines are drawn on a chart to connect the higher highs or lower lows of the price.
Bollinger Bands – Bollinger Bands are used to identify potential breakouts in the market. They are calculated by taking the standard deviation of a security’s price over a specific period of time.
We combine these indicators with three things:
our trend following trading plan,
our risk control rules and
our diversification strategy
to create a profitable, low risk approach to crypto that anyone can actually follow!
How Can Trading Indicators Help You Make Better Trading Decisions?
Trading indicators can help you make better trading decisions by providing insights into the market’s behavior.
They can help you identify trends, momentum, and potential trading opportunities.
Here are a few ways that trading indicators can help you improve your trading strategy:
Identifying Trends – Moving averages and trend lines identify trends in the market. This can help you determine whether a security is in an uptrend or a downtrend, and can help you trade better.
Identifying Momentum – Oscillators identify momentum in the market. This can help you determine whether a crypto is overbought or oversold.
Identifying FAKEOUT Breakouts – Bollinger Bands identify fakeout breakouts and reversals in the market. When the bands tighten, it indicates that the token price is trading in a narrow range. This can help you identify breakouts from the fakeouts and reversals.
Confirmation of Trading Signals – Trading indicators confirm trading signals. For example, if a cryptocurrency is showing an uptrend, but the RSI is showing overbought conditions, it may be a signal to sell the token. By using multiple indicators, you can confirm trading signals.
Risk Management – Trading indicators help manage risk by identifying potential stop loss levels so you take losses when they are small. For example, if a crypto is trading below a key support level, it may be a signal to exit the trade and cut your losses. By using trading indicators to identify potential stop loss levels, you can manage your risk and make better trading decisions.
Can Indicators Actually Automate Your Trading?
Trading indicators are powerful tools that can help you make better trading decisions. They provide insights into the market’s behavior and can help you identify trends, momentum, and potential trading opportunities.
Three well known crypto portfolio automation services:
Shrimpy: Shrimpy is a portfolio management and trading automation platform that allows users to create custom trading strategies and automate trades across multiple exchanges.
3commas: Find managed crypto portfolios to follow or set up your own automated strategy.
By using trading indicators in conjunction with other trading strategies, you can improve your trading performance and achieve greater success in the market.
However, it’s important to remember that trading indicators are not foolproof and should be used in conjunction with other forms of analysis. With the right approach, trading indicators can be a valuable addition to any trader’s toolkit.
In this article, we discuss 5 good reasons to use trading bots to automate your crypto trading strategy – at the end we’ll share unexpected disadvantages you should be aware of.
have become an increasingly popular tool among cryptocurrency traders looking to automate and optimize their trading strategies.
These software programs are designed to execute trades on behalf of the trader, using algorithms and technical indicators to make decisions based on the trading signal definitions.
Why automate your crypto trading strategy?
Time-saving: The first principle of wealth building is that your money should be working for you while you do other things. One of the biggest advantages of using trading bots is that they do the unending menial task of watching prices for you. If you find yourself watching the charts or constantly checking the markets to manually execute trades, consider learning how to set up a bot to make trades on your behalf – or find some proven copy trading profiles and follow their automations.
24/7 trading: Crypto markets never sleep and using a trading bot allows you to assign your money the task of monitoring price and executing trades even when you are not available. This can be especially useful for investors who want to trade a slow long term, trend following approach.
Diversification: A series of crypto trading bots across a portfolio of digital assets makes it easy to diversify into a new crypto portfolio at the start of the next Altcoin Season – and also to manage the work of closing trades at the right time. We have set up our trading bots to follow the proven Crypto SmartWatch strategy for different portfolios of coins. By diversifying your portfolio with a small position in many coins, you can spread exposure across different assets, thus increasing the potential for a single investment with massive moves boost your overall returns.
Backtesting: Another advantage of using trading bots is the ability to backtest different strategies. Our methodical backtesting allows better confidence to identify when Altcoin Season is starting and ending, helping us fine-tune the settings and timing of the trading bot operations. Our Crypto SmartWatch historical research is now invaluable for crypto traders to optimize their trading strategies in 2023. Improve your understanding of risk control in trading crypto currency trends before you start trading with a bot.
Emotionless trading: One of the most common mistakes made by traders is allowing emotions to cloud their judgment. This can cause trading mistakes when we are winning and trading mistakes when we are losing. A well-planned trading bot can eliminate this problem as trades are executed based on pre-set rules and algorithms rather than emotions, opinion or second-guessing. A Botted strategy will remove emotions such as fear, greed and excitement, which can often lead to impulsive trading and higher risk.
Our research has shown that trading bots can provide advantages when you correctly automate your crypto trading.
Trading Bots can be especially useful for investors who wisely take a hands-off approach to trading. Experienced investors leave their money to manage the work involved in watching the markets to capture opportunity at the correct time.
However, it is important to note that like any trading strategy, using a trading bot comes with its own set of risks.
Disadvantages Of Using A Bot To Trade
While trading bot services and the best copy trading platforms offer a range of options and tools, they also come with some disadvantages to be considered. Some of the downsides of using copy trading or following trading bot include:
Lack of flexibility: Trading bots rely on pre-set rules and algorithms to make trades. This can be beneficial in some cases, but it also means that the bot is not able to adapt to changes in the market or unexpected events. (For example we know that our trend following strategy, the Crypto SmartWatch, will take repeated losses in a sideways market so we have manual review of the activity of all our our bots.)
Lack of human judgement: Trading bots can also lack human judgement, as they make trades based on pre-set rules and algorithms. We must understand all of the conditions of the market and how our bot will respond so that we might pause the bot operation in some market conditions.
Risk of hacking: Trading bots are operated through software, which means they are vulnerable to hacking attempts. This will always put your funds and investment at risk, so we recommend funding your trading exchange with only a small part of your overall cold storage assets. Always take the time to set up 2FA and strong random passwords on your exchange accounts. Keep your cold storage digital assets on a hardware wallet.
High costs: You may think that many of the best trading bots on the market come with a high cost but you can select from a range of low price and high return bots to follow on 3commas or BitGet.
Lack of transparency: Most trading bots operate in a ‘black box’ with complex sounding things going on behind the scenes, which can make it difficult for traders to know exactly what trades the bot is making and why. The Crypto SmartWatch approach is completely transparent and easy to understand. We can explain why every trade is placed!
Are Trading Bots Even LEGAL?
It’s important to also note that depending on the jurisdiction you’re trading in, there might be some legal and regulatory restrictions around the use of trading bots. It’s important to be familiar with these before using bots, to ensure compliance with regulations.
Trading Bots and Your Tax Obligations
Using a trading bot will not change your tax classification. The classification of your trades and investment activity for tax purposes will be determined by
how often you trade and
the amount of profits you earn.
Large crypto profits will affect the tax bracket you fall under and thus change your tax obligation.
It’s also important to note that, depending on the jurisdiction and the way you use it, the use of a trading bot could change the way your profits are classified by the tax authorities.
Beware Of Day Trading Bots
For example, if a day trading bot is used for scalping, it may be classified as a business activity and may be subject to different tax rates and regulations than if it were used for long-term buy-and-hold investments.
It is always recommended to consult with a tax professional in your country to understand the tax implications of your crypto trading activity and how the use of a trading bot may affect it.
Keep Trading Records The Easy Way
It is also important to keep accurate records of all your trades and report them correctly on your tax return in order to avoid any issues with the tax authorities.
It’s good practice to keep track of all your crypto transactions and keep records of buying, selling and trading of any cryptocurrency, this would help in determining the capital gain/loss on them, as well as the cost basis. Simply import your trade data from your exchange API and CoinTracking.co will calculate the rest.
Crypto trading is subject to tax regulations in most countries, so it’s essential to comply with them to avoid any legal issues.
Automate Your Crypto Trading
Overall, while trading bots can offer a range of benefits to traders, they also come with a number of disadvantages and dangers. Get to know exactly how your bot will work before deciding to automate your crypto trading with a bot.
Crypto Investors should consider their own unique needs and risk tolerance when deciding whether to use a trading bot. Additionally, it is important to always do your own research, and thoroughly test and evaluate any trading bot before using it with your own funds.
