In crypto trading “automation” is one of the most popular keywords. Everybody is dreaming about automated profit making systems. Even we at PalmaBot began with automated bots for crypto arbitrage 3 years ago. But if you dissect the whole trading process from getting the information about an interesting investment to closing a trade with trade record for accounting purposes, you quickly see there is a whole range of automation possibilities.
So, let’s begin with what does automation actually means? I went digging on the internet and here is what Wikipedia is stating:Automation, or Labor-saving technology is the technology by which a process or procedure is performed with minimal human assistance. Automation or automatic control is the use of various control systems for operating equipment such as machinery, processes in factories, … and other applications and vehicles with minimal or reduced human intervention… (Source)
BINGO! Already a quick search serves me with a definition that gives me a straight answer to my title question – NO! Automation means minimal or reduced human assistance! This means, you still need to do something, at least occasionally!
So what does trade automation look like in practice?
To be able to find the answer, we need to check what steps are needed to do a trade and in parallel which steps can be automated. To begin from ground zero, we can simplify to this 4 steps process:
- Fundamental analysis – what exists and is worth investing in?
- Technical analysis – what do indicators say about the best time to enter the trade?
- Trade execution – enter the position, then exit. According to strategy.
- Trade record – transaction recording for accounting purposes.
First there are the fundamentals…
In this initial phase, you are acquiring information regarding different investment options. All of them are volatile, some before, others later. Only a small portion of those choices really such and only a small portion of those really thrives far more than others.
Mainly when we talk about fundamentals and about which coins to include into our investment portfolio, we are actually deciding which context is closest to us, more understandable, easy to read about (because it is interesting to us) and deal with (because we know or even operate in that field) often if not every day. Surely, we will always as well include the ones we expect to thrive the most.
German quote with the redesign:Trust is good, but control is better. Redesign: automation is awesome, but control is necessary.
In fundamental phase practically everything can be automated:
- Google – automate source searching, access everything practically directly from your sofa.
- Automate news filtering. In internet times a more complex problem is getting the top relevant news. This is something we at PalmaBot tackle with a “news” shortcut button – accessible with every price chart (/coinPrice command) for a selected coin – with a single click. We have multiple sources, including crypto news feed and google.
- Another possible automation is help from PalmaBot in the sense of automation here is /radar function – you can at any time use this command and PalmaBot will throw you 5 best gainers and 5 worst losers among more than 2000 trading pairs. This might give you a suggestion for new investment. Also, it might help you exclude some of your bad decisions (significant price drop) or tell you about a very low price to buy something if you still see the fundamentals healthy.
- Up to this point, you have to do everything on your own – whenever you feel like it, you have everything at your fingertips. But what if you are waiting for some news to come out to confirm your fundamental assumptions? Wouldn’t it be nice to have the possibility to set an alert over a piece of exclusive news or new coin listed on a certain exchange? So you would be notified as soon as it happens? For this kind of automation, I use CoinMarketAlert.com, a Swiss based service that is using multiple news sources like media and exchange news feeds. Plus, they are making massive progress in a very short time! And above all that I like also the whole range of alerts that they provide, including MarketCap and Coin listing alerts. If you would like to try it too, please join our community on Telegram and ask for “CMA coupons”, here is the link to the group.
- However, as we come to automated decisions, we need to be aware that although it is possible to automate even this part, the problem is that you need to foresee everything that the decision-making system should take into account at the moment you set it up. And since nowadays everything changes so quickly it became even more impossible to predict what should be the parameters according to which the system would decide by itself – without (your) human interaction. That is why we at PalmaBot teach that it is better to have the control (even if with automation) at your fingertips – read on to discover more details…
The technical analysis comes handy when deciding on entry…
Up till now you already decided which investments suit you best. You checked which crypto exchanges have them and opened accounts there depositing your funds. Now you are ready to buy in, but you notice that the price is for example highest in the last month, indicating your entry is not good. And now you wonder, is it going to go higher, or should you wait for the price to come back to “normal” levels.
This is where technical analysis comes in, which is basically a technique that tries to predict the future on this very common assumption that “history repeats itself”. You should be aware though, that nothing is 100% sure and that nothing can predict the future. What is more important is that you have the ability to react as soon as it happens, where technical analysis is there to give you more confidence in executing the trade.
GB (our COO) quote on time in financial world:You can never buy time. But what you can buy is SPEED. And speed is crucial in financial world.
Automated technical analysis is something crypto traders master…
- The first type of automation that comes handy is to be able to follow the price on the GO. Having the internet on your mobile does let you check the price, but you don’t want to be checking every minute if the price reached entry levels, right? This is where PalmaBot will become your best friend as it watches the 2000+ trading pairs and 23 exchanges (and counting) 24/7 and makes sure nothing goes by unnoticed. It, for now, offers 2 types of signals that will notify you faster than you would see it on the exchange (see video): Absolute signal (command /abs) – a one time signal that notifies you as soon as the price reaches the value that you set – and Difference signal (command /diff) – a continuous signal that will notify you every time the price changes for the preset threshold.
- Automated technical indicators are something that is accessible with many technical analysis systems like TradingView, Coinalyze, and similar. So, instead of drawing the indicators by yourself, you practically can view it with a click of a button.
- Then there are Candlestick patterns that are pretty much hard to find as you have to look among different timeframes. But even here I discovered a mastery! Coinalyze.net developed an automatic candlestick pattern detector (see more…) that you can use for free!
- Surely there are as well many other technical parameters that are automatically served via several existing service providers like Coinalyze.net liquidations, open interest, and similar (see more…). If you would like to share your own preferred system for trading, please put it in the comments below or join PalmaBot community on Telegram.
- Yet I would like to expose another level of automation, something I was writing in my previous blog (read more…) and is the next step of automated liquidations detector – real-time alerts for liquidations, again all free on Coinalyze.net.
Trade execution – the moment of truth!
This is the most crucial moment to maximize your profit. That is why so many people invest time in technical analysis as they don’t have time to follow everything all the way in real-time as professionals do. And this is the part we at PalmaBot tackle with special attention – we encourage you to do your analysis, be aware of what is possible and when approx., always take good care of your risk assessment – but most importantly, we provide you the ability to react anytime, anywhere.
Now you have the info (fundament), you decided which investments you are interested in, you did the technical analysis, and have some expectations according to which you have set your strategy. It is time to start investing / trading.
Automation in trade execution and order placement…
- The first level of automation here is multi-order placement. PalmaBot enables you to place as many orders as you want (even with a buy price higher than existing) and then it executes the order that reached the predefined conditions first. Recently we were given the title “Multi Broker” by my friend, professional trader from Zug, Switzerland.
- The next automation possibility that you have as well with PalmaBot Executor is “set buy/sell price” where it executes the trade while setting up automatically SL and TP that can be manually adjusted in a few easy steps chatting with the bot over a smoothly guided walkthrough (read more…).
- Have you ever got an alert or info about a coin and then you had to manually sign in to exchange via their mobile app, jump back and forth to see which coin was the alert about, try to place the order with fat fingers challenge, and finally (in the fifth try) you succeeded (and all the friends were already gone for the concert)? PalmaBot Executor offers a predefined web-hook based alert definition that any alert provider can integrate (for now TradingView and Coinalyze) – and you can react with a single buy/sell click as the alert is sent directly to Telegram.
- Yet we should not forget about custodial automation which is usually very welcome among traditional investors, where customers like their funds to be secured by a third party – in this case I would definitely mention FIMA for all EU citizens – buy any crypto in a completely safe and regulated environment.
Trade record – the essence of accounting…
There is a saying:Only 2 things are unavoidable in life, death and taxes. Every serious trader / investor has this pain somewhere all along.
Record keeping has all the automation figured out already…
- Imagine that there exists a system that does it all for you. Imagine it does it in a very clean, intuitive, and kind fashion. Imagine you would be having your own digital financial assistant. Meet PalmaBot! It automatically sorts all your trade history, calculates gains, enables exporting, and all that in a clean HTML UX that you can securely access anytime. Go to PalmaBot and try trading in DEMO mode and watch for “Trading Dashboard” possibility. And don’t worry, we will launch this separately with more infos, soon!
- For calculations however there is a need for almost every country different. But for German speaking countries I would suggest Swiss based crypto startup Accointing.
Now you can really focus on what matters the most.
Happy investing and trading!