Automation has been trending upward forever and trading is an exception, especially in the cryptoverse; let’s talk about it. Please note that Binance is the most popular crypto exchange so we dedicated this paper to how you can automate crypto trading on Binance.
You’ll read about auto trading bots’ capabilities, use cases, advantages, and disadvantages. Next, we’ll tell you about the role of bots in the crypto asset management industry, and lastly, what Finestel & Finestel Pro can automate and where they stand in the industry.
Table of Contents
What Does Automated Trading Refer to?
Automated trading systems, auto trading, mechanical trading, or algorithmic trading, refer to automating trading sessions or any trading-related activities such as market analysis, strategy backtesting, and so on, using partially or completely autonomous bots.
What Can We Automate in a Trading Session?
- Bots are super versatile algorithms, able to do anything! Many market participants think bots are making trades only, which is not the case at all. From sending the detected trading signal via notifications or emails to your mobile phone, up to building, modifying, and executing trading strategies; from Binance spot & Binance futures automated copy trading bots up to automated digital crypto asset management firms! For real! Let’s breakdown automation stages one-by-one:
Automation Stage Zero; Backtesting & Strategizing:
Professional trading starts with carving out strategies; you might’ve heard plenty. Automations step in to help you right from the beginning of a trading session.
Some to-be-tested trading strategies are easily backtest-able via codes and automated backtesting bots, which will fine-tune your trading strategy that you’ve built based on preferred factors such as indicators, time-frames, balance, and so on and so forth.
Notification and Data Collection Automations for Further Analyses
Now, your strategy is waiting for the right condition to provide a trading set-up (TP, SL, order size, etc.). Bots at this stage of automation read market movements and notify you through alerts and via notifications, that your predetermined conditions have been met.
Those conditions could be a price or any other technical indicator change, or a chain of actions that creates the perfect situation for your strategy to be executed.
Besides notifying, data collections & categorizations might also be taken care of to be used by the next stage automation you read below:
Automated Signal Bots
Trading signals are usually in the form of a set of orders, like this:
- Trading pair BTC/USDT
- Entry Price: $$$
- Stop-loss: $$$
- Order size: X%
- Take Profit 1: $$$
- Take Profit 2: $$$
- Take Profit 3: $$$
Bots can turn the collected data – through the previous stage – into a set of orders, based on the risk management, technical indicators, and other conditions you’ve defined for them.
It’s worth noting that many traders might do a couple or most of these stages manually, and prefer not to use automated trading systems because of possible glitches, miss-calculations, and so on. However, these systems are mandatory for trading styles like high-frequency trades and have had great improvements recently.
Automated Trade Execution!
Put simply, they execute orders based on your trading strategies and the trading signals we talked about above. But that’s not all!
There are auto trading bots that execute the whole order set, on multiple accounts and proportional to their balances. Automated crypto portfolio management is one of the groundbreaking solutions our little bot friends provide.
Copy Trading Bots
These are the guys I’ve been talking about. They copy orders of a strategy (SL, TP, OCO, etc.) from one account and then execute them on multiple other accounts.
Copy trading bots have become super sophisticated nowadays that can execute orders proportional to the receiver accounts’ balances through API connections with almost all crypto exchange accounts, at the speed of light; maybe a hair short!
These bots can handle certain scenarios and even detect and report possible bugs and glitches from the exchange side, between exchanges, or the bot itself.
Client Management Automations
It’s like an autonomous CRM. From notifying a community of clients, up to settlements and support, it’s not possible to keep up with the pace and accuracy that the previous stages of automation provide.
- Especially in the crypto investment management industry, this stage of automation plays crucial roles that Finestel and Finestel Pro provide.
Different Types of Auto Trading Bots to Run on Binance
In addition to the classification of trading bots we told in different trading stages, there is another classification of Binance auto trading bots:
- An independent software that a developer or coder builds to perform certain functions; from data collection & analysis up to order execution and more. You can code it from the ground up or modify the already existing source codes, and then connect to your exchange account via APIs & Web sockets.
- Third-party trade automation platforms (auto trading terminals). These are mostly web-applications that connect to your crypto exchange account via API access to trade, using your trading strategy. You can code your bot, embed the codes you bought or downloaded, or just deploy a trading strategy, using their programmable trading terminal. Also known as auto trading terminals, you can define rules and conditions using a GUI (Graphical User Interface).
- A trading bot platform provided by the crypto exchange, for automating your trades on your exchange account; KuCoin Trading Bots for instance. Speaking of KuCoin, you might be interested in the article on Kucoin copy trading Kucoin copy trading tutorial.
Technically, an auto trading bot is an algorithm that one defines using either codes or scripts, check marking boxes, flipping switches, or placing a series of orders (SL, TP, OCO, etc.), to execute a trading strategy.
Binance Automated Trading is all about building or hiring bots to do far more than what a human can manually do, and doing it autonomously, rapidly, and accurately on your Binance account.
Popular Auto Trading Bots for Binance in The Market
So you can literally create a bot for any trading related action. I mean, there are a few popular ones that you may encounter on popular auto trading platforms such as 3Commas or CryptoHopper:
- DCA bot
- GRID bot
- Copy trading bot
- Arbitrage bot
- Trailing Stop bot
- Smart order bot
- Market-maker bot
- Rebalancing bot
- Portfolio Tracker bot
- You name it bot!
Some of the terms above are technically trading strategies turned into algorithms that Binance trading terminal perfectly understands. A set of rules and orders to ride the market waves on.
Can I Build a Binance Auto Trading Bot?
You can code one from scratch or use platforms that provide an auto trading terminal which you can build an auto trading bot for Binance or any other exchange on.
If you know coding or are a developer, depending on your level of expertise, you can build your own bot and then use APIs and Web Sockets to connect them to your exchange account. Also, there are a ton of pre-written codes that you can modify.
However, there are simpler options:
Auto Trading Terminals to Build Bots
These terminals, which look like regular trading terminals with extra options, are designed to create or run trading strategies on exchange accounts that they’re connected to via API access.
Programmable trading terminals or auto trading platforms are user-friendly GUIs (Graphical User Interface) that you can import pre-built strategies (downloaded free or bought), or create algorithms to automate your trades.
Using buttons, input blanks, switches, or even writing codes or importing pre-written scripts, you can create rules and define conditions, and the platform will automatically execute them on your exchange account.
Why Automated Trading Is So Popular?
The rapidity, accuracy, and capability of trading bots are undeniable and no human can compete manually, especially in the 24/7 volatile cryptocurrency market. Nevertheless, here are some of the advantages & disadvantages of using auto trading bots:
- Minimizing the emotional interference in trading session
- Historical track record
- Backtesting, forward testing, live testing
- Buying yourself some time and efficiency!
- Possible bugs, malfunctions, and outages
- Scam or fake app or software with backdoors to scammers
- Spoiled strategies due to the popularity
Believe it or not, more than 90% percent of crypto trading volume is from various types of auto trading bots! Bots can perform technical analysis to extract trading signals, order execution (or turning that signal into a trade), and even profit withdrawals!
Automated Crypto Asset Management via Copy Trading Bots
Wikipedia says “rule-based trading” has been used since the 80s in all existing financial markets, and not just for trading but also for clients’ portfolio management; auto trading systems manage massive amounts of assets globally.
- Nowadays, crypto asset management services vastly rely on automations. Algorithmic and AI trading combined with copy trading and client management automations have taken crypto asset management to the next level; live examples, Finestel & Finestel Pro.
Finestel & Finestel Pro; The Ultimate Binance Auto Trading Platform
Finestel is basically a crypto copy trading platform via API connections, and Finestel Pro is fully customizable crypto asset management software, a white-label product that pro traders and asset managers on Binance (+ Bybit, and OKX) personalize to their brands.
Hence, the crypto asset management industry and auto trading bots have become like nuts & bolts of the crypto investment management industry, bots do much more than trade automation.
- So Finestel not only automates the Binance spot & futures portfolio management and trading services you provide to your clients, but also:
- Finestel provides fully automated client management (Telegram bot reporting clients, emails & in-app notifications, automated billing system).
- Finestel Pro provides all Finestel’s client management services and more, is fully personalized with your brand and highly customizable (delivered on your own domain or a personal Finestel subdomain, customizable support channels, reporting, billing models & cycles, marketing tools…).
You can publicly or privately distribute your strategies and earn performance fees, create crypto funds for your clients to invest in, or use Finestel Pro as a strategy affiliate marketer. Thank you for reading so far to the end, you can apply for a demo and get access to Finestel Pro to try all its services for yourself; for free, though!
Automated Trading does not just bring accuracy, speed, and efficiency to the crypto trading industry, which is quite a lot already, but takes the whole crypto investment management industry to the next level.