Profiting from Automated Trading

Posted by Matteo Poole on Feb. 23, 2019, 4:25 p.m.

Yanda Crypto Publications - Profiting from Automated Trading


Why Automated trading?

Automated trading systems allow traders to set particular rules, for both trade entries and exits, that can be automatically carried out by a computer program. Entry and exit rules can be based on simple conditions, such as technical indicators, or they can be based on sophisticated strategies, that might require programming knowledge.

The advantages of automated trading include:

  • Minimising Emotions: as parameters are pre-set, trade orders are executed automatically once the trade rules have been met, eliminating the hesitation feelings some traders may have.

  • Preserving Discipline and Achieving Consistency: with systems traders essentially program a set of trades and strategies, meaning that if executed correctly, it could bring a more consistent profit stream than individual trades.

  • Improving order entries and profits: as orders are executed automatically the speed of execution is massively increased, meaning orders can be executed at better prices, and result in higher profits.

Like everything else, automated trading systems aren't perfect, and can suffer from potential technical malfunctioning and design flaws, as well as, at times, over-optimisation. Nevertheless, if well designed, trading systems can turn out to be a really handy tool for traders to improve their profits; in the following part of this article we will explore Yanda.io, a platform offering automated trading for cryptocurrencies.


About Yanda

Yanda is the all-in-one solution for cryptocurrency trading. Yanda allows you to manage all your funds from one terminal, and makes automated trading simple and accessible to all. Yanda platform allows you to create and customise your own trading bot, as well as helping optimise your trading through free forecasting and analytics tools.
Additionally, Yanda services include: automated trading (PATS), portfolio management, arbitrage and social trading.


How to start a Strategy

In this article we will briefly explore how to start an automated trading strategy, in a few simple steps.


• Select the asset: Choose the coin you want to start a strategy with (e.g. BTC) and the amount (Investment).

• Set the ideal parameters: Strategies use a keynesian investment rationale, meaning that once started, your investment will be split equally in the two assets (e.g. BTC and USD), and both buy and sell orders will be placed simultaneously with both coins.

In the example you can see a volatility spread of around 1.7%. For the strategy to execute at its best, you should start it around the mean value (white line), you can do so with ‘Set-entry price’ feature (available in ‘Add parameter’).

Then, you should set minimum profits from buy and sell, ideally below half of 1.7%, around 0.85%, meaning your bot will sell at around $3947 (blue line), and rebuy around $3860 (yellow line).

Set the lock-in profits (profits at which the bot will stop), and you are good to go. It's recommended to set small amounts and restart strategies as soon as they lock-in profits.

• Monitor the results: Now, all that’s left to do is  be patient and monitor your strategies. If a strategy is idle for several days (e.g. 1-2 weeks), you should consider terminating it and restarting it with adjusted new parameters.



 

Published and Edited by: Matteo Poole - Head of Market Development at Yanda.io.

Disclaimer: Please keep in mind this is not financial advice, but just an argumented opinion, so don’t treat it as such.


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