Do you dream of a world where you can make money on crypto without putting too much effort? While there is no robot yet that brings you revenues, several attempts to automate your thinking are already present in the market.
Let’s look at one of those attempts, signal trading.
What is signal trading?
What do you think of when you think of trade signals? Most likely, you can guess how they are calls to some sort of action. But what calls and to what action?
A trade signal is simply a signal to buy or sell an asset (e.g., Bitcoin). Trade signals are often generated by technical analysis or a group of experienced traders providing their insights. Later, you can receive those signals either via email, or text messages, or Telegram.
In a nutshell, if you’re looking for a quick and short recommendation to react to a certain market situation, signals are here to assist.
Signal trading in crypto
Signals on Telegram
Here is an example of a signal for doing a crypto trade by CryptoArbiTrade:
🔁Buy – 5285.63 USDT Binance.com
🔥Sell – 6060.98 USDT Bituary.uk
💸775.35 Profit per BTC traded
14.67 % Profit
This signal suggests you do an arbitrage trade with the $775.35 profit. So if you want to, you go and buy Bitcoin (BTC) – the currency is indicated in the pics attached to the signal – at a lower price on top of Binance and then sell it on Bituary.uk, taking the 14.67% profit.
Looks pretty straightforward, right? But you should always remember about the risk of not getting filled the second time in this particular case.
We have found this type of signal in one of the free Telegram groups, but it’s not always the case, and normally you will have to pay for signals.
There are manifold groups on Telegram that offer you paid signals or trade signals free of charge. You can just follow those groups or add them to your crypto bot if the functionality of the software allows you doing so.
Signal trading bots
As you can guess from the title of this fragment, sometimes signals come in hand with specific software that acts on them, and this software is called trading bots. You don’t have to manually place orders in this case — bots will do that for you.
Crypto bots acting on technical analysis
Based on indicators used in technical analysis, say, MACD, Bollinger Bands, etc., trading bots analyze the current market situation as well as your personal stop-losses and take-profit targets and make a decision to buy or sell.
TradeSanta uses Bollinger that measures volatility levels and sends the signal to our trading bot when the current price hits the top or bottom band. For instance, if the current cryptocurrency price hits the top band, this indicator will generate a sell trade signal.
Bots acting on other traders’ experience
There are also companies in the niche that offer specific bots to act not on technical analysis, but on signal providers of your choice. Those signal providers are basically groups of traders who sell their experience.
The above-mentioned companies accumulate signal providers in one market place where users connect the signals with a proprietary trading bot.
On the face of it, the result might look the same as with the bots that act on technical analysis: you don’t have to place orders manually anymore, because the bot acts on signals instead of you. But these particular signals are generated by people.
Basically, there are two types of trading signals out there, the ones that are based on technical analysis and those that are generated by experienced cryptocurrency traders. Both of these signals can be automated and added to your trading bot.
But initially, they are just signals generated by technical analysis or experienced traders you might want to follow or not.
With the first option, you need to be able to read the charts, but with the second option, you can simply receive alerts via Telegram.
Hopefully, now you’re optimistic about trade signals being a little step towards the times when bots will make decisions for us.
But it’s never too old to remind you that crypto trading bots simply automate your thinking, and trading signals are just recommendations.