February 1, 2023

Innovation & Tech Today

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The Promising Future Of Crypto Algo Trading

Perhaps today is the most appropriate time to get yourself involved with the great potential of digital money, formally known as cryptocurrencies, and the advanced technology involved with it. The number of crypto traders is increasing by the day, given its advantages in profit generation and productive investments.

The ever-changing socio-economic conditions and the impact of the pandemic greatly shifted the economy and vitality of many markets. The year marked a sharp decline in the global economy, especially in fiat currencies. Conversely, the crypto market is steadily increasing.

To capitalize on the developing innovations in the crypto market and properly take advantage of the best crypto exchange for automated trading, continue reading below.

Automated Trading: The Basics

Automated trading, also referred to as Auto, Algorithmic, Algo Trading, is the use of advanced mathematics and algorithms to automate the placement of trades. This means the process banks on codes that indicate a specific set of instructions that trigger automatic commands for trades.

These so-called instructions take into account elements that affect trade and exchange, including the price of the coin, quantity, timing, and other mathematical models. Beyond profit generation, algo trading ultimately liquidizes the market and establishes a more systematic, unbiased, and objective approach to trading activities.

Hence, there is a growing population of traders now utilizing intelligent and reputable auto trading bots. This smart trading platform offers a wide assortment of bots and also encourages users to continuously produce innovations for auto trading.

Innovations that Enhance Auto Trading

Here are some of the notable innovations in algo trading today. Some are lifted from the presentations of top trading experts present at the Algo-Trading Innovation Hub.

High-Frequency Trading (HFT)

The development of HFT is crucial as one of the main attractions of auto trading is its ability to process volumes of requests in a snap. In this field, large numbers of orders must be executed in a fraction of a second, hence the need for the increase in speed and accuracy of auto trading bots.

Fortunately, 3commas offers auto trading bots and services equipped with cutting-edge technology that saves users from the trouble of network lags and traffic. Browse its wide-range of available products and avail them at extremely affordable rates.

Deep Reinforcement Learning Trading Strategy

This comprehensive and extensive strategy utilizes three powerful actor-based algorithms, namely the Proximal Policy Optimization (PPO), Advantage Actor Critic (A2C), and Deep Deterministic Policy Gradient (DDPG).

The combined use of these enables the seamless adjustment of placing trades according to the volatile market conditions. The reward mechanism of this strategy addresses the loophole of the ML regression in predicting market outcomes and measuring probability.

Social Trading and Opinion Mining

The integration of social networks to trading has made trading mechanisms accessible, especially to novice traders. This is done through social trading platforms, which simplify the processes and operations involved in the decision-making of auto trading.

From its inefficiency and accessibility, this innovation has gradually gained traction among traders. This popularity enabled such platforms to gather consumer behavior data that political and marketing analysts can utilize to make better adjustments in algo trading adaptive to the shifts and changes in the market. This process is generally called opinion mining.

Greater Investments in Surveillance Apparatuses

Surveillance is among the most important practices in the crypto market since it allows for a more accurate and precious report of all market activities. Data gathered through surveillance improves market awareness and more informed decision-making in trading.

However, the use of satellite data in algo trading is still riddled with criticisms and speculations. Some claim that the lack of equal access to such data may bring negative repercussions to auto trading.

Nonetheless, with the fast-paced nature of auto trading innovations, this might be resolved, and the industry might fully benefit from this.

How Auto Trading Bots Can Help You

The vibrant trading community engages users and traders in a creative exchange of actionable ideas geared towards the further enhancement of algo trading bots and technologies. Among these are auto trade tools that are already available at hand:

  • Dollar Cost Averaging: DCA bots are renowned for their functionality in minimizing the entry price of a position.
  • Grid bots: These have impeccable efficiency in automatically buying coins which prices have dropped and in selling coins when prices have increased.
  • Option Bots: These can be tricky, especially for amateur traders. Luckily, 3commas has crafted a mechanism to make these bots easier to manipulate and use in placing remarkable trades.

Overall, algorithmic strategies can make one’s trading experience worth it, and profitable.

By I&T Today

By I&T Today

Innovation & Tech Today features a wide variety of writers on tech, science, business, sustainability, and culture. Have an idea? Send it to submit@innotechtoday.com

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