Key aspects of an automated crypto trading platform

Welcome to this comprehensive guide designed to assist Coinbase traders in elevating their cryptocurrency trading experience using platforms for automated crypto trading. Throughout this article, we will explore various aspects of an automated cryptocurrency service provider, ranging from the different types of automated trading strategies to advanced trading tools and features. Moreover, we'll discuss how TradingView indicators and signals can be seamlessly integrated into your trading strategies on an automated crypto trading platform. Whether you are an experienced trader or seeking to expand your trading prowess, this guide is tailored to help you navigate the world of advanced cryptocurrency trading with a crypto trading automation provider.

A key feature of an automated crypto trading platform is its offering of automated trading bots that execute trades based on predefined strategies. Advanced traders can create custom trading bots or use existing presets to implement sophisticated trading strategies. We will go over two key types: Dollar Cost Averaging (DCA) and Grid.

Dollar cost averaging (DCA) strategies

There are multiple bots and strategies. The DCA is one of the most popular. This approach is particularly beneficial for advanced traders seeking to reduce the impact of market volatility risks. The DCA bot employs a strategy that helps users trade at preset intervals in an effort to “average” out the cost of a position over time. This DCA approach allows advanced users to gradually build their positions in a cryptocurrency over time, taking advantage of market fluctuations while minimizing the risk of a lump-sum trade at an unfavorable price.

Grid strategy with GRID bot

Another popular approach is a Grid trading strategy. By arranging a grid of orders within a specified price range, this strategy allows traders to potential generate positive outcomes during periods of sideways movement. Grid strategy is a systematic approach to taking advantage of small price fluctuations utilizing a larger number of small trades. It’s a perfect use case for a bot because it would be extremely tedious, if not impossible, to carry out this strategy using manual trades.

Benefiting from sideways movement

When the market experiences stagnation or moves horizontally, traditional trading strategies may not be as effective. However, the Grid bot excels in such conditions by executing small trades that can add up to big numbers over the course of weeks and months. 

Rising strategy

In the Rising strategy, the Grid bot initiates more buy orders than sell orders. By setting the High price close to the current market price, it reduces the risk of significant asset value depreciation during sudden price drops. Typically, the High price is set approximately 1.5% above the current price, while the Low price is set 28.5% below it. Additionally, enabling the Trailing up function allows the grid orders to automatically move up with the price. As the grid orders cannot move down, about 95% of the orders are placed below the current price, ensuring continuous trading even during price drops.

Stable strategy

The Stable strategy is suitable for trading in a sideways market with higher volatility. It seeks a more stable channel for trading. In this strategy, the High price and Low price are set at an equal distance of approximately 17.5% from the current market price, allowing for balanced trading between both currencies in the trading pair.

Advanced traders can integrate TradingView indicators and signals into their bot deal start conditions. This functionality allows them to use their preferred technical indicators and signals from TradingView to trigger automatic trades. Whether it's RSI, MACD, Bollinger Bands, or any other popular indicator, traders can customize their strategies based on their chosen indicators and signals.

If you still want to trade manually but need to add some flexibility, look for a platform that offers enhanced trading features that your exchange does not. A suitable example would be a platform with a tool that empowers users to execute manual trades with concurrent take profit and stop loss orders, as well as trailing features. These tools provide advanced traders with greater control and flexibility in optimizing their trading decisions.

In conclusion, crypto trading automation providers offer a comprehensive set of tools and features tailored to meet the needs of advanced cryptocurrency traders. By utilizing the platform's advanced trading features, automated bots, smart trading tools, and integrating external indicators, traders can enhance their trading strategies and stay ahead in the dynamic world of cryptocurrency trading.

Use caution when using third party automated trading bot providers. Such platforms are not affiliated with or endorsed by Coinbase and Coinbase makes no representation as to the suitability, security, or safety regarding any third party automated trading bot platform.

This material is the property of Coinbase, Inc. The views and opinions expressed herein do not necessarily reflect the views of Coinbase or its employees. This material is for informational purposes only, and is not (i) an offer, or solicitation of an offer, to invest in, or to buy or sell, any interests or shares, or to participate in any investment or trading strategy, (ii) intended to provide accounting, legal, or tax advice, or investment recommendations or (iii) an official statement of Coinbase. Consult your advisors before making any investment decision. No representation or warranty is made, expressed or implied with respect to the accuracy of the information or to the future performance of any digital asset, financial instrument or other market or economic measure. Coinbase may have financial interests in, or relationships with, some of the entities and/or publications discussed or referenced in the materials. Coinbase does not endorse or approve links or third-party websites that may be provided in the materials.