Bot-traded futures, explained

Binance

How do bot-traded futures work, what are the top tips for success, and what are the common pitfalls to avoid? This explained article reveals all.

How popular are trading bots in the crypto market right now?

According to TradeSanta, demand for trading bots has increased substantially of late.

The latest figures from the platform’s website suggest that it now has more than 100,000 active users, and over 3,200 active trading bots. More than 3.8 million deals have also been completed since the software launched.

A range of technical indicators are provided by TradeSanta, and the software also allows large volumes of crypto to be bought and sold without causing prices to spike or drop. Trading bots can also be launched in just five minutes using pre-set templates — and alternatively, users have the freedom to build customized strategies from scratch.

Futures and other derivatives have become increasingly popular in the world of cryptocurrencies as the industry matures. TradeSanta is hoping to provide the technology that allows traders to make the most of this new trend and enjoy levels of automation that are commonplace in stocks, bonds, commodities and forex.

Learn more about TradeSanta

Disclaimer. Cointelegraph does not endorse any content or product on this page. While we aim at providing you all important information that we could obtain, readers should do their own research before taking any actions related to the company and carry full responsibility for their

Which exchanges support futures trading bots?

Several trading platforms now support futures trading bots via an API, including Binance.

Binance Futures enables traders to use leverage and enter into short and long positions alike. It offers trading pairs that are linked to the USDT stablecoin, and the exchange’s size helps to deliver high levels of trading volume and liquidity. Data from Skew shows that Binance is the biggest platform in terms of futures volumes over a 24-hour period — exceeding the likes of Huobi and OKEx.

Users can hedge positions by shorting cryptocurrencies during bear markets — or go long if they believe that major digital assets are set to appreciate further in the future. All of this can provide a crucial form of risk management for traders in the volatile word of crypto.

One cloud cryptocurrency trading software platform that supports Binance Futures is TradeSanta. But given how bot-traded futures are best suited to those who have higher levels of experience, support for this exchange is only provided through its top subscription package, which provides an unlimited number of bots.

Can trading bots be more accurate than human traders?

Yes — and better than this, they can also remove the emotion from trading.

Automated trading bots can crunch a staggering amount of data every second and come to rational conclusions far faster than human traders can. Whereas a seasoned trader can only digest one chart at once, these bots can capture a snapshot of the whole market instantly. They also cut the time it takes to enter and exit a position.

But accuracy isn’t the only advantage here. Emotions can sometimes get in the way of traders making a rational decision. Thankfully, bots are immune to fear and excitement. This means that a futures trader can set clear objectives in advance, and they won’t have to make snap decisions that they may later regret. And with the Fear & Greed Index flashing scores of “extreme greed” in recent weeks as the crypto markets surged, bots can also allow traders to protect their profits in the blink of an eye.

What are the biggest risks traders need to be aware of?

Futures trading, especially with margin, is riskier than spot trading.

Although bots can have their uses, traders need to be aware that — if the markets aren’t acting as they anticipated — their positions can be liquidated a lot faster if leverage is being used.

These cutting-edge solutions also can’t make decisions on which contracts to trade, meaning that you’ll need to play your role.

If you use a particular exchange for futures trading, you’ll need to find a trading bot provider that offers compatibility through an API. And last but by no means least, you should check these computer programs are fast and reliable. A malfunction at an inconvenient time could cause sizable losses and significant amounts of frustration.

Are there any top tips for successful trading?

Remember that you need to constantly analyze how the markets are moving.

When you’re using a bot to trade futures, you can’t set everything up and forget about it for days on end. Trading bots are designed to enhance the experience, but aren’t a substitute for good old-fashioned human involvement.

Traders who use bots are typically recommended to check their positions at least once a day, as well as how the market is performing. That way, they’ll be able to use their judgement to make tweaks to their strategies. It’s also essential to set stop-loss orders above liquidation prices.

Many trading bot providers offer tools that make it easier for traders to keep track of sudden, significant developments in the markets. For example, some deliver Telegram notifications when action is needed, and mobile apps so strategies can be accessed on the move.

What’s different about using a bot to trade futures?

They allow you to gain exposure to the crypto markets 24 hours a day, seven days a week.

One of the biggest complaints that traders normally have is how they are constantly stuck in front of their screens.

The world of cryptocurrencies never stops, and the market can make big moves at any time… irrespective of whether it’s a Wednesday afternoon or at 3am on a Sunday. This makes it inevitable that sleep-starved traders will miss out on opportunities sometimes.

Trading bots can be the solution here. They allow experienced professionals to set their desired parameters for entering and exiting positions — eliminating the need for them to be in front of their computer nonstop. It also makes it easier for traders to execute multiple orders at the same time.

This technology is also popular in the spot market, where it can be advantageous for forex traders as well as cryptocurrency specialists.

Automated trading in a bull market, explained

Bitcoin

What are the benefits of automated trading in the current market — and can they help mitigate volatility in unpredictable times? Our guide explains all.

What are the tools that TradeSanta offers?

The platform enables traders to connect their accounts to top exchanges, and set up a bot in under five minutes.

TradeSanta supports a wealth of long and short strategies, and enables technical indicators to be used so trades are opened at opportune moments. The company also says it paves the way for large volumes of crypto to be traded without impacting spot prices.

No two traders are the same, let alone their trading tactics. Preset bot templates are available — and as an alternative, customized strategies can also be built from scratch. Coupled with transparent analytics and notifications via Telegram, automated trading can deliver that all-important edge as the rollercoaster ride of 2021 continues.

Learn more about TradeSanta

Can a trading bot replace a human?

Automated trading is designed to complement your activities rather than replace it.

A good analogy here is Tesla Autopilot. Although this system can steer, accelerate and brake with little involvement, drivers are still instructed to keep their hands on the wheel and their eyes on the road ahead of them.

The same applies with automated trading. Bots can buy or sell on your behalf, but it’s still important to check in on a regular basis — and make adjustments whenever the market changes course.

One upper hand that a trading bot can have over a human is the speed with which an order can be executed. Whenever quick movement is needed, automation can shave off a few precious seconds — maximizing the final outcome.

How can traders protect themselves against volatility in the market?

Razor-sharp technical analysis is only one piece of the puzzle… your traits matter too.

It’s important to set clear parameters — and ensure that you’re only trading what you’re prepared to lose.

Patience can also be a virtue. Instead of jumping at every market movement, it can be worth taking a step back, and handpicking the best opportunities that have the most potential. This will help ensure that you aren’t spread too thin, and you can keep track of everything that’s going on.

The crypto markets move 24/7, and so do TradeSanta’s bots. They can spring to action whenever there’s a surge in trading volumes at 3am, while you’re fast asleep. And if you take some well-earned time away from your computer screen — for a walk, a meal out or time with loved ones — automation means that trades can continue to be executed on your terms.

How can bots help in the event of a sudden downturn?

They can help you tackle a falling market with poise.

One tool championed by TradeSanta is the trailing stop-loss. This means that a normal stop-loss order doesn’t need to be set manually every time a market trend takes a turn against a trader’s favor — across both long and short positions.

For someone who is holding on to Bitcoin while it appreciates, adding a 10% trailing stop-loss ensures that the bot continues to track the cryptocurrency as it rises in value. An order will only be triggered when BTC falls by more than 10% from its latest peak — helping to lock in some of the profits that have been accrued. This can help mitigate some of the losses that could have been incurred if a normal stop-loss order was in force.

When using this order type, it’s crucial to ensure that an adequate trailing distance has been established. It’s not unusual for Bitcoin to fluctuate by 5% in a single day, and a small percentage may result in assets being liquidated before they continue to travel upward again.

Of course, a normal stop-loss order can still have its uses, allowing you to specify exactly how much loss you would be willing to tolerate if prices fall.

What are the benefits of automated trading?

Bots can help keep your carefully cultivated strategies on course.

Unpredictable markets can make us emotional — and tempt us into acting on impulse. Strategies that have been carefully devised can be thrown out the window with little contemplation, and this can have huge consequences.

Automated trading allows you to set clear parameters for when you want to enter and exit positions. Better still, bots can also react to the unexpected, and make adjustments in response to unexpected trading climates.

They can also help to reduce overtrading, where switching between ideas in quick succession risks amplifying losses. The best strategies are often concocted during times of calm, when we’ve had the opportunity to carefully consider the potential scenarios that lie ahead. With a bot, you’ll have an effective way of cutting losses and letting winners run.

How can automated trading help in the current market?

They can offer an extra layer of protection during times of volatility.

The crypto markets were not known for being predictable, even before the dramatic bull run. Bitcoin started the year at $29,000 and managed to double in value… all in the space of about six weeks. Depending on who you ask, the cryptocurrency’s sharp spike upward was surprising — or entirely to be expected.

No matter what your convictions are, it’s important to have safeguards in place that help protect your crypto. We live in a time where a 10% move can shed thousands of dollars from your position. Current trading patterns have resulted in periods of sideways movement punctuated by dramatic breakouts that can happen day or night.

Trading activity is increasing, and institutional adoption can result in sizable transactions having a big impact on Bitcoin’s price. Recent research from Bank of America suggested that it takes just $93 million worth of inflows to move BTC by 1% — and with other analysts likening the current market to a tinderbox, it’s essential for traders to have effective instruments at their disposal.

TradeSanta