Trading bot for Binance is a specialized trading software that is connected via API to the Binance exchange. The main task is to monitor the behavior of the market in real time with the automatic formation of an order for a transaction in the cryptocurrency of interest on behalf of the account owner. The system under consideration has been used in the usual financial markets for a long time. In the cryptocurrency sphere, it is in high demand, since the excellent volatility of digital funds allows you to instantly respond to market changes, which is physically impossible for a person.
- Trading bots – definition, purpose and principle of operation
- Popular strategies when using bots to trade on Binance
- Features of choosing a bot for Binance – choose binance bot 2022
- Advantages and disadvantages
- The process of creating a DCA bot on Binance Futures
- Stratum Bot Setup
- Helpful Hints
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Trading bots – definition, purpose and principle of operation
trading bots, in particular those intended for trading on the Binance exchange, are connected to a registered user account on the exchange for the subsequent conclusion of transactions in automatic mode. During operation, numerous indicators and signals are actively used. The main task and goals of automation are to provide all possible assistance to users to organize passive income with minimal time. Experts in the field of online trading indicate that personal computers show better results in trading than users. This is due to the fact that the principle of operation is built solely on mathematics and probability theory. The software guarantees a high speed of transaction processing with a high level of accuracy, which is unattainable by a human.
Important: bots implement numerous simple and complex strategies, including real-time arbitrage. In many ways, this directly depends on what kind of algorithms are laid down by programmers when
programming bots .
Stable functioning implies the provision of public and private API keys by the user, which are automatically generated in the registered account on the Binance site. Therefore, each trader informs the exchange that the bot has received official permission for unhindered access to a real account and the subsequent execution of financial transactions.
The APIs provided are designed to allow external software to access the required data and options within the exchange of interest. Trading bots independently form requests regarding:
- the real situation on the market;
- the residual amount of funds on the balance sheet;
- making deals.
To cancel the granted permission, you need to delete the keys in the exchange account or revoke the access right. It is important to understand that trading bots must necessarily generate profits, taking into account the existing risks, allowing you to achieve higher profitability rates when compared with the banal expectation of price growth. The cryptocurrency market is constantly in an open position than the stock exchanges. This entails a certain amount of stress for potential investors.
Popular strategies when using bots to trade on Binance
The developed software is able to optimize for numerous strategies that are applicable to investors in manual mode. This allows you to achieve maximum performance with minimal risk. Among them are:
- Arbitration . The strategy under consideration provides for the principle of making a profit directly from the difference in the value of an asset on different exchanges or specialized sites. For example, the bot is able to independently determine the available difference in prices for Binance and, for example, Exmo, and then conclude a deal to sell assets in a timely manner. In this case, the difference acts as the main income. Today, the strategy is not popular, due to the small amount of opportunities in relation to risk-free transactions.
- Market formation . In this case, the algorithm is based on a real-time comparison of the purchase and sale prices on the spot market and directly on derivatives in order to find the difference between them. After that, a limit order is formed with the simultaneous acquisition of income from a pronounced fluctuation in value. The strategy is in high demand and is considered highly competitive, which often leads to a guaranteed loss in conditions of minimal liquidity.
- Indicators . Most of the software is set up to track and analyze numerous trading indicators. Among the most popular are the exponential moving average (EMA). The developed bots are able to instantly respond to changes in signals, for example, an EMA exit from a channel, a price intersection, and so on. The main advantage is the ability to perform the presented operations with free bots for Binance.
The choice of strategy is determined by the trader independently. It is important to understand that each of them is associated with high risks. Therefore, you need to start directly from the amount of funds on the balance sheet.
Features of choosing a bot for Binance – choose binance bot 2022
There is no significant initial investment required to start trading with automated trading software. The key features are considered to be:
- it is important not to forget about the service fee of the exchange in order to eliminate the risks of going into the red when concluding a large number of small transactions;
- When choosing a suitable bot, it is highly recommended to take into account the existing reputation. Ignoring entails the likelihood of falling into scammers, which is guaranteed not only to drain the deposit, but also possible theft of personal data from a registered account;
- upon completion of the bot selection, it is required to confirm its ability to automatically check strategies by backtesting with the subsequent formation of structured statistics;
- 24/7 support is an added advantage.
There are a huge number of bots that are offered to users for trading on Binance. The most requested include:
- profit trailer.
In any case, it is important to clearly understand that specialized software does not mean automatic profit making around the clock. Everyone should learn how to independently make adjustments, make the choice of a suitable strategy through testing. This is a virtual machine that performs the tasks of a trader. Trading with a bot on the Binance exchange – is it very profitable?, BITSGAP bot for Binance, bot setup: https://youtu.be/ZrbnUUayM5M
Advantages and disadvantages
The widespread use of specialized bots entails the improvement of the market with a systematic reduction in exchange spreads, and makes the market liquid. Their main advantages are:
- automated trading process;
- the ability to perform numerous routine tasks without interruption;
- conclusion of the most accurate transactions when compared with manual trading.
At the same time, it is important to understand that it is impossible to simply launch a program and naively believe that capital will automatically increase. It is important to regularly monitor the functioning and, if necessary, make adjustments.
The process of creating a DCA bot on Binance Futures
Each user, regardless of experience, has the right to independently develop a bot. This requires:
- Initially initiate a transition to the page of a specialized service, for example, https://3commas.io/ru/bots/new.
- The function of developing an advanced composite bot is selected. It is important to remember about the Binance site.
- At the next stage, you need to select the pairs in which the software is planned to be launched automatically.
- At the final stage, the strategy of interest is selected, a certain type of margin and leverage are selected.
Until recently, the development of 3 such bots required the formation of three separate strategies separately using isolated margin. The situation has changed dramatically – now one is enough.
Stratum Bot Setup
Stratum Bot is one of the few bots that, if properly configured, can provide a stable income. The start of the setup includes:
- Go to the official Stratum Bot portal.
- Pressing the registration key, entering email.
- Receive an email with a password and a link to confirm your registration.
- Enter your username and password to enter your personal account.
- Loading the bot with subsequent unpacking and launch.
- Synchronization of personal account with software. You need to go to the settings, select the “Cabinet” tab and copy the located key.
- Return to the portal with a subsequent transition to the “Devices” section. Pressing the add key. As a result, the key is displayed from the presented list.
The procedure for connecting to the Binance exchange requires API keys. Instruction:
- Authorization on the Binance platform.
- Switching to the “API Management” category.
- Entering any key name and then pressing the creation key of the same name.
- Confirmation of action by available methods.
- Launching the bot with the subsequent transition to the settings.
- Go to the “Exchange” section, insert both keys – secret and API.
Note: It is recommended to check if the BNB fee payment feature is activated. In addition, trading is suspended at zero balance.
Before starting work, it is strongly recommended to focus on the procedure for setting up the
scalping strategy . It means the instant closing of the transaction, subject to the achievement of an insignificant income. Open positions are closed after reaching a profit of 3-4%. What you need to know when setting up a strategy:
- “selling to zero” – a mark-up, with the help of which the sale of assets is carried out in order to prevent losses and simultaneously reach zero; “% min. spread” – the level at which the bot initiates trading. The order is set at the rate, as the first one, for purchases from those in the glass;
- min. margin and wholesale. margin – values that have a direct impact on profit from each concluded transaction;
- recommended timeout – 1-2 sec.
The main advantage of the bot is the speed of operations. Traders are not physically able to work on several pairs at the same time. As a result, efficiency indicators increase significantly.
To reduce the chance of making mistakes, it is highly recommended with some tips on how to use trading bots effectively. Among them are:
- API keys are highly recommended to be stored in the same way as crypto wallet keys. This is due to the possibility of obtaining unhindered access to an account on the exchange with the right to manage;
- trade is carried out solely on the basis of the permission granted. It is strictly forbidden to give the right to withdraw. Arbitrage bots are singled out as an exception;
- the need to install two-factor authentication to increase the level of protection;
- using backtexting. The main advantage is to grant the right to launch a profitable strategy on historical price data, which guarantees the effectiveness of the check;
- it is highly recommended to experiment with numerous strategies. In most cases, one of them functions an order of magnitude better than the second;
- it is important to immediately tune in to expenses in the future. An automated trading process is not a guarantee of income. It is important to use a specialized stop loss in order to minimize losses as much as possible;
- some situations provide for the conclusion of transactions in manual mode. The bot acts as an assistant and does not act as a full-fledged replacement for a trader;
- It is strongly recommended that you keep track of the service charge. With constant trading, an impressive commission is retained.
Code a Crypto Trading Bot For Bitcoin With NodeJS & Binance API: https://youtu.be/ne92QxZaHzM In addition, some developed bots provide an additional concept, for example, insurance, maximum risk protection. The main task is a sharp price fluctuation. It is important not to ignore such features.
- 1 Trading bots – definition, purpose and principle of operation
- 2 Popular strategies when using bots to trade on Binance
- 3 Features of choosing a bot for Binance – choose binance bot 2022
- 4 Advantages and disadvantages
- 5 The process of creating a DCA bot on Binance Futures
- 6 Stratum Bot Setup
- 7 Helpful Hints