If you are wondering how to set up an automated crypto trading bot, we can show you a simple, yet profitable bot setup.
A crypto trading bot is a computer-run program that automatically trades cryptocurrencies for the user. They can be used for day trading, swing trading, or long-term investment. Some bots also offer market analysis and technical analysis.
Ok, let’s first lay a foundation.
You do need to know a bit about candlesticks on the chart. A candlestick chart is a graphical representation of the performance of crypto, stocks or other assets. A candlestick chart consists of a set of concentric circles, each representing a day’s worth of trading. The height of the candlestick indicates the value of the asset at that particular point in time.
To help you out, here’s an image:
A bullish candle is a candlestick with a lower open and higher close, likely due to a bullish sentiment in the market. So bullish candle means the price opened lower and close higher.
A bearish candle is a type of technical analysis indicator that depicts a downtrend in a crypto’s price by displaying a decreasing volume of trading activity over a given period of time. This is often used as a technical analysis tool to identify a downtrend in the price of a coin. Bearish candle means price opened higher and closed lower.
Wicks (thin lines) show how high and low price got during a given time period.
Now, the candles are the same on every time frame. So if you’re looking at a 5 minute chart, then each candle represents 5 minutes of data. (same for hourly, 4 hour, etc.)
Ok, understand? Good to go? (If not, a quick YouTube video will set you straight)
Now, let’s get into the system:
1. Market needs to make a low
2. Market then needs to go below that low
3. Market then needs to close above the low it previously went below.
When that happens, we now have an opportunity to start our bot. Here’s what it looks like:
This setup is incredibly powerful, yet also extremely simple.
The only thing I would recommend is that you look for this opportunity on higher time frames such as a 4 hour and above.
Using it on a smaller time frame for a bot may not be the best if you’re looking to keep the bot open for a while.
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