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Gunbot vs 3Commas Crypto Trading Bot Review

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gunbot vs 3commas ultimate review

Gunbot vs 3Commas. The Ultimate Crypto Trading Bot Showdown.

Gunbot vs 3Commas Review. Discover how these two bots execute specific crypto trading strategies and battle to achieve the highest percentage of profitable trades.

In an age where bots seem to find applications almost everywhere, it’s no surprise that they’ve been implemented in cryptocurrency trading.

The volatility of the crypto market is increasing daily, making it quite challenging to analyze. Trading bots have been developed to facilitate the daily task of traders.

This automation is achieved through bot software, a program integrated into a crypto trading platform. A trading bot can execute (buy and sell) orders and obey some other advanced algorithmic codes.

Automating crypto trading has made the life of thousands of trades easier. Are you one of us? If not, keep reading because adopting a crypto trading bot can change your life forever.

If you are interested in crypto trading, you can choose the best cryptocurrency trading bot to make the process easier. There are tons of crypto bots out there, and it’s essential to know which one is the best.

There are certain features to consider when choosing a crypto bot—ranging from personalization and ease of use. The interface of a good trading robot should be easy to use by any trader, including those new to crypto.

A good bot should have all its information easily accessible, and its mode of use should be displayed along with all aspects of the trade that matter, including orders to buy and sell in progress.

Let’s explore the features of the two popular bots we have today and clarify some key differences.

Gunbot and 3Commas are undoubtedly two of the best bots we have in the crypto space today. We shall analyze the difference in price and features in this Gunbot vs 3Commas article. Read on!

What is a Crypto Bot?

what is a crypto bot

A crypto trading bot can be defined as software designed to interact directly with crypto exchanges to obtain information and execute pertinent commands at the right time.

Bots allow you to buy and sell orders at the time your predetermined conditions appear on the market.

Essentially, a bot executes your preset trading methods by monitoring market price movements and using preprogrammed rules to enter, exit, take profit, stop losses, and so on. The bot runs market actions such as price, volume and places orders based on your preferences.

Let’s face it. Automation is the key to success!

Crypto trading bots are the best way to take the tedious work out of trading. Trading bots allow you to automate your trades based on technical indicators.

Automatic trading is excellent for people who might not have the time or patience to trade themselves. The crypto bots will engage in this and do the heavy lifting for you.

The crypto market is a tricky space to navigate. With thousands of different assets to choose from and markets that never close, it’s a lot tougher for you as a new crypto trader. You need a trading strategy and solid knowledge of technical analysis.

On top of that, you would have to act a the right time (every time) 24/7.

So, Thousands of altcoins? Markets open 24hrs a day? Solid trading strategies? Yeah, you need a bot!

It’s never been easier to make money trading cryptocurrencies. Cryptocurrency trading bots and software platforms have provided a simple and affordable way for everyday investors to trade cryptos on their terms.

For many traders, using software to automate trades has proven to be a profitable investment. Software traders are available 24/7; provide personalized research, and automatically execute trades based on your customized strategy.

Automated trading software can also help you develop your strategies, helping you determine which cryptos to buy, when to buy them, and how much to invest at any given time.

Let’s weigh Gunbot vs 3Commas and see what makes them unique.

Gunbot vs 3Commas — Gunbot Overview

gunbot trading software on a laptop and phone

GUNBOT is a crypto trading bot that aims to ease your trade with its automation software. Launched by Gunthy in late 2016, the software can work via all major computer operating systems— Windows, Linux, Mac, and ARM.

Gunbot can also be accessed via a web-based interface (the Gunbot GUI). Gunbot has thousands of active traders across a whole network of automated crypto trades.

The crypto bot enables anyone to automate their trading to enhance profits and integrate regular market options like buy and sell orders, stop-loss/take-profit orders, DCA strategies, and many more.

GunBot offers more than 30 strategies for executing entering and exit plans. These strategies can be combined and fine-tuned into your custom strategies based on your preferences and trading style.

For example, you can use your GunBot to buy a coin at a certain percentage from the lower Bollinger Band and sell that coin with a trailing stop/stop-loss strategy.

Some of the strategies include Ichimoku, MACD, SMA Cross, Support/Resistance, SpotGrid, Bollinger Bands, StepGrid, and many more.

More like the typical feature common with crypto bots, Gunbot allows you to trade several crypto assets without having to sit looking and checking your computer all day. Gunbot helps you eliminate all forms of human interaction and emotions from your trade.

Gunbot prevents FOMO and all the downsides that come with it—focusing only on the algorithmic codes, trading indicators, and predetermined market options to execute your trades.

And with its customizable feature, you can change the strategy and have an algorithmic system that you are happy to use at all times.

The trading bot platform supports more than 100 crypto trading exchanges such as Binance, Bitmex, Bittrex, Bitfinex, Coinbase Pro, Kukoin, Cex.io, Poloniex, Kraken, OKEx, Bybit, Huobi, Beaxy, and a lot more. Also, you can access and edit your Gunbot settings via a web browser from any standard operating system.

The Gunbot business model is quite different from other automated software in a couple of ways. If you’re considering signing up, the platform provides a Starter account that’s relatively not expensive, especially considering that you’re paying for a lifetime deal with included support and all future updates.

You don’t need to keep subscribing for a recurring monthly fee. Instead, you purchase a lifetime trading license.

Owning a Gunbot license gives you long-term access to the bot, and it saves you from hassles that come with a monthly subscription.

Gunbot Packages and Pricing

gunbot packages and prices

Gunbot offers different package options for its users, and each comes with a lifelong license for GunBot and other distinctive features.

Also, the platform offers the Gunbot School, providing steady chat and email support available for all the packages (when you buy from CryptoDROI).

Note that you can trade with Gunbot at Beaxy, Txbit, and Gunthy Mex at no extra cost, regardless of your license choice.

How Much Does Gunbot Cost? Let’s take a look at these packages.

Note that we are running a Sales Promotion right now, so prices are cut in half. Always click on the “Buy Now” button to make sure you get the Official Gunthy Prices!

Gunbot Starter 0.0055 BTC

The starter version is the cheapest of the options, but it comes with a limited number of strategies and options. Still, you can upgrade at any time via the “upgrade pack” available at CryptoDROI’s Gunbot Store.

Gunbot Starter Edition Features Include:

  • You can switch exchanges anytime.
  • One exchange platform at a time.
  • You can trade using four strategies.
  • Available for spot trading only.
  • Free 200 Gunthy tokens included.

Gunbot Standard 0.01375 BTC

This option provides you with everything you need to get rolling with a fully-fledged bot trading platform on a single exchange.

Gunbot Standard Edition Features Include:

  • Available for one exchange.
  • Features spot, margin, and futures trading.
  • AutoConfig.
  • Free 500 Gunthy tokens included.
  • Unlimited trading pairs.
  • All strategies and combinations are available.
  • Switch exchange anytime.

Gunbot Pro 0.020625 BTC

This package is suitable for traders to diversify on multiple exchanges.

Gunbot Pro Edition Features Include:

  • Available for up to 3 exchanges.
  • Includes spot, margin, and futures trading.
  • 750 Gunthy tokens provided.
  • Unlimited trading pairs.
  • You can use all the trading strategies available on Gunbot with this package.
  • The backtesting add-on included.
  • You can switch exchanges anytime.
  • Features AutoConfig.

Gunbot Ultimate 0.034375 BTC

As the name suggests, it’s the ultimate package with no compromises—maximum number of API slots and access to all add-ons.

  • Available for five exchanges
  • Features spot margin and futures trading
  • Accommodates unlimited trading pairs
  • TradingView add-on
  • Free 1250 Gunthy tokens included
  • All trading strategies are available
  • You can switch exchanges anytime
  • Custom JS strategies
  • Allows AutoConfig
  • Backtesting add-on

Gunbot vs 3Commas — 3Commas Overview

3commas bot trading terminal in laptop and mobile

First, let me tell you that I’m not affiliated with 3Commas in any way. The information provided in this review is accessible thru the 3Commas official site. The link to 3Commas is for you to visit and check the site directly. It does NOT contain an affiliate or referral tracker.

3Commas.io is a trading bot that entails the benefits of an automated trading bot. 3Commas seeks to provide service for all traders of any account size. The bot executes BUY and SELL orders at your preset time.

3Commas launched the platform in 2017. With more than 220,000 registered users and many innovative bot features, the platform has proven sustainable.

While you might be inexperienced in setting up your trading strategy, 3Commas enables you to copy an experienced trader’s portfolio. You get to choose the trader you want to copy by assessing their trading history, indicating both profit and losses, preferred trading pairs, and volumes.

3Commas supports more than twenty-three (23+) top cryptocurrency exchanges, including Binance, Bittrex, Kraken, Coinbase Pro, and FTX. The platform offers a free account with a demo feature, so you get to decide whether to go with paid packages, which start from $14.5 per month if you use the annual payment choice.

3Commas offers an online web-based platform that is accessible anywhere. The Estonian-based company provides several trading bots that can perform precise strategies like stop-loss, shorting, etc.

The crypto trading platform offers a wide range of technical indicators and smart trading functions in its smart trade terminal. The smart terminal gives traders a way to manage their order execution without relying on robots to automate trades. This capability is perfect for day traders or swing traders who want to maintain a manual strategy.

Due to its flexible, customizable feature, 3Commas offers easy modification of trading positions using the user interface. It also provides easy programming of the bot for advanced traders at any specific time.

The 3Commas portfolio tracker lets you quickly see a snapshot of your holdings across multiple cryptocurrency exchanges, including a summary of your profit and loss over time.

3Commas Pricing and Packages

3commas subscription plans

In terms of pricing, 3Commas offers four (4) packages which range from a free plan, a starter plan, an advanced plan, and a pro plan.

These packages include free TradingView integration and management of your crypto accounts in one portfolio.

How Much Does 3Commas Cost? Let’s analyze the difference in the 3Commas recurrent plans.

Free Plan $0

  • The free Plan has an unlimited scalper terminal.
  • One Active SmartTrade
  • One DCA Bot (One Multi/Single pair for Spot or One for Futures)
  • One GRID Bot
  • One Options Bot

Starter Plan

The Starter plan costs $14.5 per month if you choose annual payment or a $29 monthly charge.

  • Smart trade terminal without trading limits
  • Unlimited scalper terminal
  • One DCA Bot (One Multi/Single pair for Spot or One for Futures)
  • One GRID Bot
  • One Options Bot
  • Paper trading

Advanced Plan

The advanced Plan costs $24.5 per month if you choose annual payment or a $49 monthly fee.

  • Unlimited Active SmartTrades
  • Unlimited DCA Bots (Unlimited Single pair for Spot. One Multi pair for Spot or One for Futures)
  • One GRID Bot
  • One Options Bot
  • Unlimited Scalper Terminal
  • Paper Trading

Pro plan

The Pro plan costs $49.50 per month if you choose annual payment or a $99 monthly charge. The Plan offers you three day Free trial with full access to all the features.

  • Unlimited Active SmartTrades
  • Unlimited DCA Bots (Unlimited Multi/Single pair for Spot & Unlimited for Futures)
  • Unlimited GRID Bots
  • Unlimited Options Bots
  • Unlimited Scalper Terminal
  • Paper Trading

All 3Commas plans include:

  1. 18 supported exchanges
  2. Multi-level referral program
  3. TradingView integration
  4. All of your crypto accounts in a single portfolio
  5. Free mobile apps
  6. Plus, more than 20 trading features

3Commas vs Gunbot

It’s fair to say that both Gunbot and 3Commas are top-notch cryptocurrency bots and have their distinctive features.

3Commas is a cloud-based bot that can be accessed via any platform, while Gunbot is a downloadable software that runs on Mac, Windows, and Linux.

Both platforms support many exchanges, and you can access them via a web browser from the easily accessible operating system.

However, these two have edgy features between each other; let’s take a detailed look at these features.

Plan and Subscription

One notable difference between Gunbot and 3Commas is their payment plan.

Gunbot offers lifetime access to all its plans with no recurring costs. The prices are listed in Bitcoin and possible payment with 300+ altcoins, including stablecoins and PayPal.

3Commas offers four monthly/annual commission-free active plans with no hidden fee. The prices are listed in dollars, and you can make payment via Bitcoin, Visa card, and PayPal.

Also, 3Commas offers a 3-day free trial if you sign up for their “Pro” plan. While there is no free or trial plan available on Gunbot, you can check the demo accounts or Livestream trading of many resellers to get an idea of a functioning bot.

Ease of Use Configuration

3Commas—the cloud-based system has become a go-to platform for many traders due to the large selection of automated trading bots.

3Commas provides signals for trading between individual trading pairs. These signals can be linked to trading bots within the application to trade based on the call automatically.

The process of configuring this trading bot is not easy. Each bot must be individually configured and regularly maintained. It takes time to start managing a variety of trading bots on 3Commas.

The large selection of technical indicators, connecting your exchange via API, launching your preferred trading strategy, and tracking the statistics can leave novice traders feeling lost.

Alternatively, the platform makes it easy for beginners to copy the trading portfolios of other experienced 3Commas users, making it easy to track and implement their trades.

Gunbot, on the other hand, has built-in trading strategies that allow its users to edit and set their bot automatically afterward easily.

Gunbot Autoconfig: With this feature, virtually all configuration aspects can be automated with your defined rules, including automating your strategy, for example, trade with a dynamic gain target. You can simultaneously trade two pairs whereby you monitor conditions on one pair and change settings on another.

In addition to its ease of use for newbies, Gunbot has a starter version that offers limited features, and you can use it to experiment with smaller amounts.

Educational Tools

While 3Commas offers its users a wide range of educational tools, Gunbot made its school and chatted support available for new buyers from most resellers.

Members have access to the 3Commas business school, paper trade, and an active learning community.

The 3Commas platform offers paper trading so that you can practice your strategies and test your bot on a simulated crypto market before putting your real money into play. It is an excellent tool for beginners and more advanced traders who wish to test a new strategy in actual market conditions.

On this front, Gunbot offers a “Watch Mode” setting in the GUI that you can enable on every license, plus it gives Backtesting for Pro and Ultimate users.

Also, the crypto trading bot platform has an active learning community where other traders can discuss lessons, share their ideas, and help each other understand the material.

Gunbot vs 3Commas — Essential Features

  1. Capability: Both bots utilize an easy-to-use and intuitive user interface that includes many functions and detailed analytics. Users can use bots or strategies, set stop loss, take profit targets, and customize their trading strategies.
  2. Technicality: Both bots take advantage of API integration with crypto exchanges and work around the clock with any device. Users can access their trading dashboard or GUI with their computers or mobile phones.
  3. Technical Analysis Tools: Both trading bots provide a wide range of trading tools, including Tradingview charts and signals, backtesting, PNL calculations, and so on.
  4. Crypto Exchange Choices: 3Commmas provides integration with 23+ significant exchanges, and Gunbot allows you to use 136+ due to its CCXT.pro integration. Both bots will enable you to trade on the major crypto exchanges in the industry. And both are part of the Binance broker program, which means that both run their Binance-clone trading exchange.
  5. Customer Service: Both trading platforms provide 24/7 technical support in different languages and are easy to contact via Help Center or thru social media channels like Facebook, Twitter, and Telegram chat rooms.

Gunbot vs 3Commas — Conclusion

gunbot vs 3commas winner

I want to clarify that both crypto trading bots are legit and solid platforms for any cryptocurrency trader.

It’s up to you to decide which one you choose for your trading endeavors.

Don’t forget that greed and the desire to beat the market is one of the most potent forces in human nature. Many new traders turn to automated trading software to take advantage of these lucrative opportunities, either because they lack the skill required to trade successfully or simply because they want such software’s benefits.

The cryptocurrency space is evolving, and a lot of platforms are erupting. A crypto bot is an excellent sector of the cryptocurrency trading space that eases the hassles of manual trading.

I hope this Gunbot vs 3Commas comparison helps you make an educated decision when you’re ready to buy your bot and start making money in the crypto trading industry.

While there is no perfect platform that will work for everyone, Gunbot offers multiple lifetime licenses, so you don’t have to worry about expiration. It’s worth giving it a shot.

Take advantage of the Gunbot Halloween Sale Going On Right Now!

Top 5 Crypto Trading Exchanges in the US

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top 5 crypto trading exchanges in the U.S.

Find Out the Best Crypto Trading Exchanges in the U.S. and How to Choose Them.

Discover how the most reliable Crypto Trading Exchanges in the U.S. protect buyers and sellers, and ensure the integrity of your trading system.

A crypto exchange plays a pivotal role in the global financial system, facilitating trading cryptocurrencies and other assets between users. Centralized cryptocurrency exchanges are safe, secure, and transparent, operating 24/7 under the oversight of regulators.

The crypto world has evolved over the years, and today, many exchanges and trading platforms have emerged. These innovations include crypto trading exchange platforms whereby people can trade Bitcoin and other altcoins seamlessly.

Among several features embedded in these platforms are p2p, buying crypto with a credit card, creating a crypto address, and a lot more.

Most of the world’s cryptocurrency transactions are carried out on these crypto trading exchanges, and large sums of money are being traded with just one click in some of them.

Often, to make the most out of crypto trading, you must keep an eye on the market 24 hours a day. But, this cannot be easy to do. Luckily, automated trading platforms like Gunbot exist and can provide you with the necessary support.

And you know what? You can trade with Gunbot in any of the top crypto trading exchanges in the United States.

Exchange platforms offer services so that you can make the right decisions with your trades at the right time. However, each trading exchange has a distinct feature that makes it better than the other.

In this article, we’re going to dissect the best crypto exchange platforms in the USA to help make the most of your trading.

What are Crypto Trading Exchanges?

what are crypto trading exchanges

In simple words, a crypto exchange is a platform to trade (buy and sell) cryptocurrency.

There are thousands of coins out there; these exchanges offer an opportunity to buy and sell one crypto coin for another. For example, you can buy ETH with BTC because you can not purchase all altcoins with a credit card.

To get fully involved in many crypto projects out there, you have to create an account on one of these exchange platforms to swap your U.S. dollars or any other fiat currency for crypto assets.

Some of these exchanges trending in 2021 are Binance.US, Kraken, FTX.US, and Gemini. These private exchange companies offer a software platform to trade cryptocurrency—with active trading, high volumes, and liquidity.

As the cryptocurrency market continues to expand in the U.S., we can see more and more exchanges competing with each other. The crypto exchanges in this article are some of the top competitors, and I chose them based on my personal experience, research, exchange performance, and trust among customers.

While these platforms are a medium to access the crypto market—with the advent of several innovations in the crypto/blockchain industry, many of these exchanges are making waves.

Crypto trading exchanges offer a channel to trade coins with other coin pairs and against fiat currencies.

Many factors go into determining which cryptocurrency exchange is the most popular. For some, ease of use might be essential; for others, it might be the variety of coins available. Ultimately, there’s no one-size-fits-all option, nor is there a standard crypto trader.

It is also crucial to look at their security, trading volume, user reviews, and the exchange’s potential for continuous growth in the crypto industry.

Can you buy cryptocurrency legally in the U.S.?

The legal status of Bitcoin and other cryptocurrencies varies across each U.S. state due to local regulations and is constantly changing because of the developing financial policy landscape.

Under the United States federal law, Bitcoin is classified as a “commodity” and considered legal. As such, cryptocurrency transactions are subject to taxes at varying levels in different locations.

The United States Government does not consider cryptocurrencies illegal, which means you can buy them and sell them on crypto trading exchanges. Provided proper anti-fraud measures like Know Your Customer (KYC) and Anti Money Laundering (AML) are set in place.

Regulation and taxation remain hurdles for Bitcoin and crypto in the U.S., but the government has taken concrete steps to address these concerns.

Cryptocurrency’s legal status (and regulation) will continue to change and evolve over the coming years as the crypto space matures.

How to buy crypto in the U.S.?

The best way to get cryptocurrency in the United States is to use a licensed crypto exchange that adheres to strict requirements imposed by local authorities.

The platform must pass audits with regulatory agencies, complete background checks on its users, maintain all transactions, and keep users’ private information confidential.

Exchanges not regulated by the relevant authorities expose customers to associated risks such as fraudulent activities and money laundering, ultimately harming consumers.

Best Crypto Trading Exchanges in U.S. 2021

coinbase ipo
The logo for Coinbase Global Inc, the biggest U.S. cryptocurrency exchange, is displayed on the Nasdaq MarketSite jumbotron and others at Times Square in New York, U.S., April 14, 2021.
Shannon Stapleton | Reuters

Below are 5 of the best crypto exchange platforms to look out for in the USA.

  1. Coinbase

Coinbase is a top crypto exchange that has been used for cryptocurrency trading since 2012. The crypto exchange keeps improving as it matures, and it should come as no surprise that it tops this list.

Coinbase, a San Francisco-based company, is arguably the leading cryptocurrency exchange platform in the United States. With its continued success, it is known to be one of the largest in the world.

It was launched in 2012, and the company’s growth has been incredible, and it grew almost 100% from $56.4 million in march 2021 to $102.6 million in the most recent period. Coinbase currently offers 56 cryptocurrencies for U.S. users to trade, invest, and stake.

Unlike other exchange platforms, Coinbase offers an array of investment options for businesses and institutions, including storing assets and a lot more. In mid-2021, the exchange started dogecoin access for Coinbase Pro users.

Coinbase Pro, explicitly made for advanced users, gives users advanced charting and trading options.

Seasoned users want more powerful tools, which they’ll find in Coinbase Pro. It features robust trading tools that will satisfy skilled users looking to go deeper into crypto trading.

Coinbase Pro also has about 105 trading pairs with USD and more than 40 crypto to crypto trading pairs.

Coinbase Advantages and Disadvantages

Pros: The interface has a comprehensive design, and it is easy to use, making it easier for beginners to navigate and purchase their preferred coin.

Like most trading platforms, Coinbase has its reader base section, and it rewards users with cryptocurrency when they learn about crypto.

Cons: Coinbase has its disadvantage when it comes to up-and-coming altcoins. For example, if you want to purchase Doge (the meme coin), you will have to use a different and more technical platform to access these coins.

Also, Coinbase has a high transaction fee, making it inconvenient for regular/below-average traders.

If your goal is to buy and HODL Bitcoin, Coinbase is your best choice due to its easy “crypto buying process.” If you plan to trade different coins manually or use a crypto trading bot, you should go with Coinbase Pro.

Coinbase is the top-rated crypto exchange platform in the U.S. because of its variety of notable features. Some of the features are:

  • Coinbase is a cryptocurrency exchange for beginners.
  • Buying crypto using bank deposits, credit cards, or debit cards.
  • Monitor your portfolio online or on your phone.
  • Coinbase Pro is an advanced trading platform with more in-depth tools.
  • Earn free cryptocurrency by learning about crypto.
  • Securely storing Bitcoin and other digital assets.

Coinbase is hands-down the best crypto exchange for traders and investors in the United States. It’s the first publicly listed cryptocurrency exchange in the U.S., which means you can set your mind at rest knowing your funds are in reliable hands.

2. Binance.US

binance u.s.

Binance.US is a cohort of Binance—the largest cryptocurrency exchange in the world. Binance.US was launched in 2019 after its parent company stopped accepting U.S. users.

Binance.US is conventionally known for its low interest and high liquidity. In April 2021, the platform recorded a milestone as it announced that its total trading volume surpassed $28 billion.

Its international industry-leading counterpart, Binance.US, is available in most U.S. states except Louisiana, Texas, Connecticut, Hawaii, Vermont, New York, and Idaho. It is currently serving over 10 million U.S. users.

The platform has a user-friendly interface that makes digital trading currencies easy for a non-technical person. It is also available for iOS and Android.

As of now, Binance.US has 53 cryptocurrencies—plus stable coins available for trading. Exchange digital currency with U.S. Dollars. With minimal transfer fees.

So far, Binance.US has not experienced any security holes, making it an ideal platform for exchanging digital currencies. As good as BinanceUS is, it doesn’t support Margin trade, and its coin offerings are presently limited.

3. Gemini

Gemini is a US-based crypto exchange company launched by the Winklevoss twins in 2015. It is dominant in the United States. Also available in some countries like Canada, Hong Kong, Singapore, and South Korea.

The New York-based company—Gemini has a simple interface for new crypto traders. You can find exchanges that charge fewer fees for crypto traders. Gemini’s safety measures and insurance against online breaches might ease the minds of those new to the cryptocurrency trading world.

Unlike Coinbase and Binance.US, Gemini has a smaller volume and offers about 30 cryptocurrencies, including popular ones like Bitcoin, Bitcoin Cash, Ethereum, and Litecoin.

Gemini is accessible in all 50 states. It offers a range of trading options like p2p, Crypto-Crypto trading, Crypto wallet security, and insurance—in case of data breaches and so on.

Talking about its interface, Gemini offers two interfaces. A regular one, particularly for beginners, can be navigated with a click—an advanced trading interface designed especially for the experienced—ActiveTrader platform.

Its fees are fair as it charges 0.5% for mobile and web app users and a transaction fee based on the traded assets of about $200; a 1.49% is set on an increased order above $200.

Pros & Cons

Gemini follows strict security protocols, and in 2018 it found no security loopholes, making it one of the most secure and trusted digital currency platforms.

One major limitation of this platform is that its fee is sometimes confusing and relatively high when not trading.

4. Kraken

Kraken is one of the earliest cryptocurrency exchange platforms. Launched in 2011, Kraken is the largest exchange in terms of volume and liquidity for EUR trading pairs. They are widely used around the world, including in the United States.

Kraken is available all over U.S. states except New York and Washington—making it limited.

It offers a variety of currencies, more than 90 cryptocurrencies, including Bitcoin, Bitcoin Cash, Ethereum, Monero, Litecoin, and many more. It also supports deposits/withdrawals via bank transfers and cryptocurrencies.

The Kraken platform also supports up to seven FIAT currencies (USD, EUR, CAD, AUD, GBP, CHF, JPY) with varied deposit and withdrawal fees.

Kraken is a preferred exchange among experienced traders and institutional investors interested in margin/futures trading, over-the-counter (OTC), and automated crypto trading.

The old and solid exchange company offers several trading options like Futures, Margin, Crypto2Crypto. Kraken, however, has some downsides. Currently, its mobile futures platform isn’t available in the U.S. Also, it had inaccessible 24/7 phone customer support.

Having a not very friendly user interface, it also suffers from stability and performance issues, but it is a good platform for cryptocurrency exchanges.

Hackers have never breached Kraken. It’s a fact established over a decade ago, and despite the occasional social media controversy, Kraken has remained one of the most secure platforms on the market.

While other platforms specialize in privacy-centric cryptocurrency transactions, Kraken remains the gold standard.

5. FTX.US

FTX U.S. exchange

FTX.US Cryptocurrency Exchange is a Delaware-based cryptocurrency trading platform launched in 2017 by Wall Street and Silicon Valley veterans. FTX is secure—as they require two-factor authentication.

They offer high liquidity similar to Gemini, and they are fast. The exchange company majors on providing safe and stable trading market options for cryptocurrency trading.

FTX US is subjectively a complete trade solution, Offering about 30 cryptocurrencies, including Fiat currencies(USD, AUD, EUR, CAD, GBP, SGD). It has a clean design and offers a user-friendly interface making it easy to trade each crypto asset.

It is a total solution that offers high liquidity; factors such as low trading fees, margin trade, address, and I.P. whitelisting, make it easily accessible.

The FTX variant offers Bank transfer (ACH), cryptocurrency, and Wire transfer as payment methods. Its users can make all their trades on one platform, and they will be guaranteed significant profits as well.

FTX charges 0 to 0.10% as a trading fee for sellers and charges 0.05 to 0.40% for buyers. It sets a deposit fee depending on the payment method —1% fee via Wire; No charges via Silvergate Exchange Network (SEN). It charges a 1% withdrawal fee on Wire transfers.

Note that some FTX features are not available for U.S. customers.

Choosing a Crypto Exchange Platform

crypto trading exchanges tips

With cryptocurrencies trading so popular, various crypto trading services have appeared. So, how do you know the best platform to make your operations more successful?

Is your money secure? One of the most crucial factors when choosing a suitable cryptocurrency exchange is the security of your money.

Sure, some exchanges offer other great features, but we know security is the most important. Security is by far the most vital factor of a business. If a hacker can steal your funds, then any other advantages it offers are worthless.

As an investor, you have to make sure that the crypto trading exchange you invest in can maintain a high degree of integrity and security.

Make sure the company has the necessary security in place to keep your investment safe and that they’re proactively looking for any vulnerabilities and fixing them before hackers find them and cause real damage.

Tips to Select a Crypto Trading Exchange.

Is the trading platform user-friendly?

The best crypto trading tools are designed to be easy to use. The quality of the user interface is an essential feature for any new crypto trader.

The design and functionality of the crypto exchange will help you efficiently trade to concentrate on making profits instead of learning how to navigate through a complicated user interface.

Crypto Trading Exchange Liquidity

Simply put, liquidity is the amount of trading that happens at any given time. A crypto exchange with many volumes is usually a good indicator of liquidity and its ability to fill orders.

Liquidity is what allows you to buy or sell cryptocurrencies at any time in the day.

You will need to find a stable enough company to manage your Bitcoin to ensure maximum return on your portfolio. The credibility of any exchange platform is ranked using the liquidity ratio.

A business can trade its Bitcoin and make a profit while retaining its original value. The number of active users is directly proportional to the volume of liquidity.

In other words, a platform with a high number of sellers and buyers has increased its liquidity.

Do your research and go for the one with the highest trading volume. Stay away from exchanges with low liquidity.

Crypto Trading Exchange Fees

With each platform comes differing transaction fee structures that are targeted at diverse types of users. Day traders don’t like high trading fees, whereas people who want to invest a little on a coin for their retirement won’t care as much about the fee structure as they do about other features.

Planning to pick a platform is essential to know you will incur only transaction fees and withdrawal fees. The transaction fees on some platforms are much lower than the fees on other platforms offering similar services.

Crypto Trading Exchange Customer Support

As the saying goes, the excellence of a system lies in the support system. Having a team of people that is always there to answer your questions and knowledgeable about cryptocurrency exchanges and the application they offer you is vital.

Without an effective support team, you will have a tough time harnessing the services’ value to bring to you.

Exchanges are gatekeepers between investors and the distributed ledger and must be trustworthy in how they operate and what they do with investor money.

A trusted crypto exchange should have a high level of transparency, a safe and secure user interface, clear policies around funding and withdrawal processes, and a willingness to hear from users and take their feedback into account.

Crypto Trading Exchanges KYC and AML

kyc aml compliance

KYC stands for Know Your Customer, and AML stands for Anti Money Laundering.

So, KYC and AML, Why are they so Important for Trusted Crypto Trading Exchanges?

In the United States, all cryptocurrencies are treated the same by law. Therefore, all crypto trading exchanges must comply with KYC and AML procedures, no matter which currencies they trade in.

Money laundering is a huge problem worldwide. A cryptocurrency’s cheaper, faster international transactions also make it an ideal tool for criminals like money launders and terrorist funders.

Why is KYC crucial for crypto trading exchanges in the U.S.?

Simply stated, KYC builds trust with customers. Crypto needs trust and transparency, To reach mass adoption in the financial sector. KYC helps exchanges to provide that.

KYC is a hot topic in the crypto trading process, and it’s only becoming more and more controversial. There has been a drastic increase in the number of exchanges requiring KYC verification.

KYC, is this a good or a bad thing?

KYC: Know your customer’s identity to avoid money laundering, terrorist financing, or tax evasion. KYC is the process crypto trading exchanges use to know their customers and make sure that they will not use the money for nefarious purposes.

To be more specific, KYC is the opposite of anonymity. Yet this paradox ensures that transactions are entirely transparent and secure for both parties. And this is something that you should take seriously.

Accountability is essential for all parties involved in any financial transaction. For investors, performing KYC helps to ensure that your account is safe from fraudulent capture and your data is protected. Customer identification programs help you avoid reputational risk and legal mishaps.

I would recommend you to stay away from crypto trading exchanges that do not comply with this procedure. At this point, I could say that KYC in crypto is a necessary evil we should get used to and comply with if we want to use safe crypto exchanges.

Understandably, the “Know Your Customer” process can be seen as just another obstacle (that raises issues about privacy and security of personal data) to entering the cryptocurrency trade market.

Crypto trading exchange services must take protective measures to ensure safety. So, like I said, in this day and age in crypto, not enforcing a KYC procedure from a crypto exchange should raise a red flag.

Gunbot Crypto Exchanges for the U.S. Traders

gunbot crypto trading exchanges

Making the most out of crypto trading exchanges means having a bot that can support your trades and help you watch the market 24/7. This is where Gunbot comes in!

You can use Gunbot to help you trade on multiple exchanges, take care of technical analysis, set up ideal strategies to enter and exit positions, and monitor your digital assets.

You can smoothly execute trades with confidence without losing sleep or burning out when using a crypto bot.

Gunbot streamlines crypto trading with its automated settings and user-friendly interface, providing access to in-depth technical analysis tools.

Gunbot can trade in more than 136 cryptocurrency exchanges thanks to its integration with the CCXT.pro library. Sadly if you’re in the USA, you won’t be able to access those blocking U.S. I.P. addresses. Too bad for them 🙂

But don’t get discouraged. There are plenty of trustworthy exchanges that you can still use while keeping your money safe. You can use Gunbot on the Top 5 crypto trading exchanges in the USA!

Crypto Trading Exchanges that U.S. residents can use to trade with Gunbot

  1. CoinbasePro: Certified Gunbot Exchange, thoroughly tested and working flawlessly for a long time.
  2. Binance. U.S.: Gunbot Partner Exchange, solid performance.
  3. Kraken: Integrated with Gunbot. Used by many Gunbotters for a long time.
  4. FTX.U.S.: FXT is a Gunbot Official Partner but its little brother has not been fully tested.
  5. Bittrex: Another oldie but goodie, used and trusted by customers since Gunbot V 3.1 like Kraken.
  6. CEX.io: Supported by Gunbot since January 2018.
  7. Gemini: Supported by integration with the CCXT library, but not thoroughly tested.
  8. Beaxy: Official Gunbot Partner, and it doesn’t take an API slot from your license, still been tested.
  9. Mex Gunthy: Binance broker program, this is a clone of Binance with all its bells and whistles, perfect for U.S. residents (you need to KYC with Gunthy Exchange)

Conclusion

Cryptocurrency trading is a volatile market, with prices rising and falling almost daily. Price volatility depends on the country or state regulations, security, acceptance of cryptocurrencies by exchanges, significant players, etc.

To meet the growing demand for cryptocurrencies and investing platforms, you must opt-in for the above options and do your homework. Everything you need as a crypto trader is to trade smoothly and effortlessly in the best crypto trading exchanges available for U.S. citizens.

Remember, no matter what, an exchange is safe until it isn’t (get’s hacked).

That’s why it is recommended to spread your crypto assets across multiple exchanges so you can minimize your risks.

Don’t forget the crypto mantra: “Not your keys, Not your Bitcoin.” It’s crucial you only invest your money in reputable exchanges.

As a cryptocurrency trader, it’s crucial to find the right exchange platform before trading or investing in these high-risk assets. But I also know that this particular market can offer you huge rewards if you have the patience to learn and take advantage of my research and crypto trading tips.

Now that you know where to find the best USA crypto trading exchanges. It is essential to have defined digital currency investment strategies before you start trading.

And where else can you find the best crypto trading methods? You got it; go for the Ultimate Crypto Trading bot now!

Crypto Arbitrage Trading Ultimate Guide

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crypto arbitrage trading ultimate guide

Discover What is Crypto Arbitrage Trading and How Does It Work

Crypto arbitrage trading is a strategy that exploits the price differences between crypto exchanges or coin pairs to turn a profit. This trading strategy can be highly effective, allowing you to earn substantial capital while limiting your risk.

Have you noticed the constant price fluctuations of cryptocurrencies?

Arbitrage trading has existed in several markets such as stocks, options trading, forex, etc. And it has proven its efficiency and sustainability.

Let’s look at what it means to employ it in the crypto space because the truth is, this strategy can become very promising.

You can use different crypto arbitrage trading methods to take full advantage of the crypto market swings. Arbitrage corrects the inefficiencies of the market and, in so doing, better aligns all price levels.

Many people shy away from arbitrage trading or view it as a lousy investment glide because it can be very complex and requires a lot of experience or a good crypto trading algorithm to run it.

Arbitrage trading happens in every market every day, and it is always open for trading; however, we rarely make use of this opportunity.

A primary crypto arbitrage trading opportunity is always available when the price of an altcoin in one exchange is different from the same coin in another market.

For example, a coin may react to news causing the price to increase; at the same time, there may be options available on the altcoin which have not yet gone bullish.

Here, you as a trader use this opportunity to buy it where it is still cheap and sell it higher where it has been pumped.

This crypto arbitrage operation allows you to profit from the amount between the asking price and the buy price — almost risk-free.

It is important to note that the chance of getting on this kind of crypto arbitrage manually trading is very slim, which is why a lot of algorithm trading is developed or is a top priority project for several crypto bots providers like Gunbot.

How would you like to take advantage of constant cryptocurrency price fluctuations?

Crypto arbitrage is a tempting opportunity that allows you to profit from these price inconsistencies. Let’s find out how!

What is Crypto Arbitrage Trading?

profitable crypto arbitrage trading

Crypto arbitrage is the act of buying coins low on one market and selling them at a higher price on another. So you can resell them for a profit elsewhere or look for fluctuations in three or more coin pairs and then bank on the inconsistent prices of those pairs.

Essentially, crypto arbitrage trading is the process of buying and selling contrasting market inefficiencies to take advantage of price fluctuations.

The price difference on cryptocurrency exchanges is not as straightforward as in other financial markets. When it comes to the natural effect of decentralization and the slow development of crypto markets, crypto arbitrage opportunities are generally more common than in other financial marketplaces.

Is crypto arbitrage profitable?

Many people have debated the profitability of cryptocurrency arbitrage. The answer is, “it depends.” Crypto arbitrage trading can be profitable as long as price differences exist.

Whenever there is a price difference, someone will always take advantage of it and make money.

Is Cryptocurrency Arbitrage Trading Legal?

Yes, in most countries. Traders can participate in crypto arbitrage trading to ensure an asset is priced reasonably in different markets by buying it cheaply and selling it at a higher price in another.

Traders must take full advantage of arbitrage opportunities, as the act of balancing supply and demand for an asset can help keep the rates stable.

Let’s use this conventional example to understand this principle better:

Say an iPad or any other object in great demand. You may see these items on eBay sold for a much lower price than the suggested retail price.

Technically, if you have funds to invest, you can buy these items and sell them to other buyers at or slightly below the suggested retail price and still make a good profit.

Crypto arbitrage trading is all about taking advantage of the price actions in the crypto market. By taking advantage of these opportunities, constant profits are generated.

A manual approach of monitoring the markets for arbitrage takes too much time and isn’t practical for many reasons.

Still, in case you want to venture into this, you will have to obtain the most stable price of that particular coin because the opportunities will come and go at a very rapid rate.

Using a Crypto Arbitrage Calculator

To get the most out of crypto arbitrage trading is necessary to use a good calculator that will help you identify price opportunities quickly.

These calculators can easily do the computations needed to estimate the best price for two or more coin pairs. To get an idea of such opportunities in the market, you can check out CoinArbitrageBot; there, you can see crypto exchanges in real-time and find out about live arbitrage opportunities.

It is always advisable to first practice with a demo account before practicing live arbitrage trading. This way, you can learn to spot market price inefficiencies without risking your real money. Once you are sure you can trade for profit, you can start using your real money.

You can visit another crypto arbitrage calculator site here and see it scanning Binance for triangular arbitrage opportunities.

To master crypto arbitrage trading is essential to keep practicing until you refine and are ready and confident that you can always detect the right time to execute a trade and profit from it.

Remember: When you’re involved in Crypto Arbitrage Trading, you’re defying the “efficient market theory” which says that for markets to be efficient, there must be no arbitrage opportunity.

Why is crypto arbitrage possible?

Crypto arbitrage trading is still possible because different exchanges will have varying levels of liquidity for the same product.

The amount of liquidity on each crypto exchange for each asset will vary depending on the number of people buying or selling it. And variations in liquidity manifest as differences in prices from one exchange platform to another.

Another reason could be that cryptocurrency exchanges are not all the same. They use different software and, better or worse, trading engines. Besides each one target various investors or countries, these slight differences can affect the prices.

Also, One of the most important factors when judging a crypto exchange is how long it takes to withdraw and deposit funds. Longer processing times mean slower up-to-date changes in the market. Lower-volume crypto exchanges take longer to update rates.

So, for a successful arbitrage operation, the following conditions have to be present in the market:

  • First, a price imbalance should exist.
  • The same coin should’ve been traded at different prices in different exchanges.
  • Altcoins with similar value should’ve been traded at different prices.
  • The trade execution must be fast and accurate to limit risk.

Types of Crypto Arbitration

types of crypto arbitrage

With the increasing utilization of arbitrage in crypto markets, there are many types of crypto arbitrage trading. When it comes to cryptocurrency, types of arbitrage trading are streamlined and quite different from the conventional types of arbitrage trading.

You understand now how cryptocurrency arbitrage works. But there are a few different types of arbitrage, all of which work a little differently.

This article will examine the two primary types of crypto arbitrage used by most bots and crypto traders: Intra-Exchange and Inter-Exchange arbitrage.

While you may read about many different arbitrage types with other names, like pure arbitrage, spatial arbitrage, deterministic arbitrage, triangular arbitrage, and so on. You should be clear that we mostly buy on one exchange and sell on another one or trade across more than one pair in crypto trading.

Crypto Triangular Arbitrage (Intra-Exchange)

Triangular arbitrage is based on the concept of “Relative Arbitrage,” and it is used basically to exploit price differences among three currency pairs.

The triangular arbitrage strategy exploits the price differences between three coins. The process is also called three-point arbitrage because of the different prices that can exist between three cryptocurrencies.

Price discrepancies can happen when one altcoin is undervalued in one market and overvalued in another.

The triangular crypto arbitrage trading strategy is a three-step process.

  1. First, it converts your primary coin into the secondary. Let’s say you buy Bitcoin with USD.
  2. Then, it converts the secondary altcoin into the third. Here you buy Ethereum with that Bitcoin you just bought.
  3. Finally, the third coin is flipped back into the first for a profit, say you sell the Ethereum you just bought for USD.

Suppose you end up with more USD than when you started your arbitrage operation has been a success.

Remember, this has to be done super-fast. That’s why we need arbitrage algorithms like bitRage to execute these transactions in a matter of seconds.

triangular crypto arbitrage

Is triangular arbitrage safe?

Crypto triangular arbitrage is a relatively safe trading strategy. It allows you to make a profit with little risk of losing money.

Crypto Spatial Arbitrage (Inter-Exchange)

Spatial arbitrage is the simplest form of arbitrage. It’s when an arbitrageur finds price differences between geographically separate markets.

In our world, spatial crypto arbitrage is a fancy way of saying, buy a coin cheap in one exchange and sell it for more in another.

Your job is to take advantage of the prices discrepancies between the two exchanges. For example, buy Bitcoin cheap on Beaxy and sell it more expensive on Coinbase.

Still, as easy as it may sound, the withdrawal costs, transfer times, and spreads make the process more difficult in this type of arbitrage.

How to perform Inter-Exchange Arbitrage operations without transferring crypto assets between exchanges?

With this approach to interexchange cryptocurrency arbitrage, you can take your time looking for a spread and act on it right away. You will be able to exploit the difference between exchanges without having to transfer your coins or wait for a slow transfer.

This faster exchange method makes it a better option for crypto arbitrage trading.

You can perform this arbitrage method by placing buy and sell orders on two exchanges simultaneously. For example, say you’ve seen some price differences on the Bitcoin market, and you can profit from it if you buy BTC at Beaxy to sell it on Coinbase.

Following the example, you would move your USDT to Beaxy and your BTC to Coinbase.

After that, wait for the price difference to appear. When you see it, you’ll buy Bitcoin with your USDT on Beaxy and sell it for USDT on Coinbase simultaneously.

So, if you had bought 1 BTC for 50k on Beaxy and you’d sold it at the same time on Coinbase for $50,200, you’d have made $200 on profit. Bear in mind that this is an example, and I do not include trading fees, but I hope you get the idea.

If you want to play more with this type of crypto arbitrage trading, you have to keep looking for price differences between two exchanges where the spread is big enough so you can profit after trading fees.

To take advantage of these opportunities manually, you would need to make an enormous effort and dedicate a considerable amount of time to it.

My recommendation is to wait a little bit more for bitRage interexchange to be ready.

In addition, it is also essential to stress that trading must take place simultaneously in two different markets. Remember that here we take advantage of the price differences. Prices can easily change at any time, so time is of the essence.

In the meantime, if you want to learn more about automated crypto arbitrage and try it for free, check out the Blackbird bot.

inter exchange crypto arbitrage

Crypto Arbitrage Trading Risks

Liquidity, price impact, and execution (associated with account size) are generally less risky through appropriate calculations. Algorithms help optimize arbitrage strategies through things like linear programming or any other form of bots.

Still, to make them fundamentally profitable (but not maximized), anyone with basic trading knowledge can handle these risks.

Let’s take a look at the types of risks associated with crypto arbitrage trading.

Slippage

There are hidden costs associated with every transaction, and slippage is one of them. It is the cost of trading based on two coin pairs.

For example, if you place a buy order at a specific price but executed at a slightly higher price, there’s a slip. You paid a little more for your actions than you originally wanted.

For arbitrageurs, whenever you enter into a trade, you may be faced with the problem of buying at the bid price but selling at the bid price.

The sale price is the lowest available for your preferred coins. The offer price is the highest price you’re you’re willing to pay for your actions. The selling price is generally lower than the price of the order.

As your number of arbitrage trades increases, the amount of money you lose due to slippage increases.

Execution Risk

There may be times when the exchange cannot fill your order immediately. Sometimes the platform you’re trading with may have difficulty executing your order for a variety of reasons.

In these cases, the price you expect can be very different from the price you receive.

Prices (Spreads) are a risk you take if you hold positions for a long time. They can anytime, but it is infrequent. They can occur when the opening price is higher or lower than the previous entry’s price.

Liquidity Risk

Liquidity risk arises when you are interested in trading an asset but unable to because no one in the market wants to sell the coins within a relatively small price range between the bid and ask prices.

Therefore, liquidity risk directly affects your ability to trade.

Lack of liquidity can also contribute to slippage, the difference between the estimated trade costs and the amount paid.

Liquidity risk in this context is different from falling prices to zero, also known as principal risk. If the price of a coin drops to zero, the market says it has no value.

However, if you cannot find another party interested in trading the coin, it may just be a problem for you and potential market participants.

This is the reason why liquidity risk is generally felt in emerging markets or low-volume markets.

Liquidity is mainly associated with futures contracts and margin calls. Also, this risk tends to exacerbate other risks. If you have a position in an illiquid asset, your limited ability to liquidate that position in the short term will increase your market risk.

So you make use of an effective risk management plan.

Crypto Arbitrage Trading Advantages and Disadvantages

Crypto Arbitrage Pros

As stated above, with a good and effective trading plan, arbitrage trading is a wise way to profit from the market and increase your account size.

  • Crypto arbitrage trading is fast and almost risk-free.
  • Volatility — the crypto market is very volatile. Even though a currency might trend over the long term, the constant rise and fall of prices along the way can be advantageous to an experienced trader.
  • Using the sharp increase and drop from a coin can result in price discrepancies and profitable arbitrage. Cryptocurrency price ranges tend to go from 3% to 5%, in most cases and 30-50% in rare cases.
  • Opportunities abound. With over 500 exchanges and over 12k cryptocurrencies, there are plenty of opportunities to find arbitrage.
  • Cryptocurrencies are so new that there are more opportunities for you to trade the different exchanges, and this is because there aren’t as many well-established networks. These differences can cause irregularities and disconnection between the crypto exchanges, which gives you more arbitrage possibilities.

Crypto Arbitrage Cons

  • Compared to the traditional trading markets, this strategy requires a lot of trading experience, making it less congested. Not every arbitrage trader from other assets is willing to give crypto a chance, reducing competition in the crypto space. It makes the crypto space less competitive.
  • This type of trading needs a fast response to market movements and is almost impossible to look through price history manually. This makes it technical for new traders with little trading knowledge and market experience; in this case, automated trading can be a better option for testing the strategies, making profits, and avoiding emotions.
  • Another disadvantage associated with arbitrage is tax. Profits made from every operation are considered as part of your trading income. So you pay taxes on profits made from the marginal rate.

Make crypto arbitrage trading work for you.

Implementing crypto arbitrage in your trading strategy also opens you to many cryptocurrencies and several exchanges out there. These exchanges make arbitrage trading easy for you, opening you to an extensive range of opportunities.

As stated above, arbitrage trading involves a lot of knowledge about price fluctuations. The use of crypto arbitrage tactics can be tricky. You have to time your buys and sells perfectly to adjust for market inefficiencies.

Triangular or spatial arbitrage across exchanges can be nearly impossible because the prices fluctuate so quickly.

That’s why arbitrage trading tools, specifically designed to execute trades and satisfy the needs of traders, are available on the market. Software developers create these tools focusing on detail and the user experience, making them a suitable product for any trader to use.

Crypto arbitrage bots like bitRage are programmed to scan and analyze the markets for any possible arbitrage opportunity and execute the trades when the conditions are met on several exchanges simultaneously quickly than a person can.

Crypto arbitrage trading requires constant price track and solid price and fee calculations. If you entrust this work to cryptocurrency arbitrage bots, this low-risk moneymaking strategy could be perfect for you.

Sadly, bitRage is still in its beta testing phase, so I can not tell you to go for it yet, but you can get Gunbot now, and when bitRage gets ready with its stable release, all you have to do is upgrade your bot.

You can do that automatically by adding Gunthy tokens to your Gunbot registered wallet, and it will unlock bitRage, the crypto arbitrage trading bot.

Conclusion

Arbitrage can be a legal and lucrative way to trade and make money. The only thing someone conducting crypto arbitrage trading is doing is exploiting price gaps between exchanges or coins. It is just like any other trading strategy!

You might have been thinking about how to get started with arbitrage trading. There are many ways to go about this, by investing in Bitcoin, opting for software, and so on.

Trading disparities involves unique risks. If you have a solid game plan and envision worst-case scenarios with various currency costs and risks, you can still be successful as a crypto arbitrage trader.

Regardless of the risk factor, always risk what you can afford. Don’t take chances with money you cannot afford to lose. Trade responsibly.

To take advantage of the rare crypto arbitrage opportunities, you’ll need to use specialized software like bitRage (when ready). This arbitrage trading software includes a way to identify the opportunities and execute trades within seconds very quickly.

Ready to take your cryptocurrency investments to the next level? Crypto arbitrage could be what you’re looking for. Automate your crypto trading with Gunbot’s multi-algorithm framework. If you’re serious about crypto trading — get Gunbot.

Start trading crypto like a boss with the ultimate automated crypto trading bot today.

Crypto Market Sentiment Analysis Overview

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crypto market sentiment

Crypto Market Sentiment Explained. How Emotions can Influence Cryptocurrency Prices.

Many factors influence cryptocurrency prices. Crypto market sentiment analysis helps you evaluate what influences these price movements.

Do you know that if enough traders act with the same idea, it can result in market cycles getting stronger or weakening?

Thoughts and feelings can spread through investors like a virus. When this happens, it can have severe consequences for the price of a cryptocurrency.

Technical and fundamental analyses are great for understanding how the price of an asset will behave. But what about sentiment analysis?

Sentiment analysis is an emerging branch of analytics that seeks to understand how individual points of view can influence the cryptocurrencies value. It doesn’t rely on the quantifiable metrics the way technical and fundamental analysis does.

Instead, sentiment analysis focuses on how specific perspectives can affect the crypto market price.

Market sentiment is what a more significant percentage of traders are thinking or feeling about the market – it is the most critical factor that drives the crypto market. Because many people tend to act based on how they feel and think about specific assets relative to their strength or weakness close to other tokens.

I guess when you trade crypto, you won’t just choose a pair to buy or sell, leaving it up to chance to determine your profit /loss status at the end of a given time. As a newbie to the crypto world, you might be wondering what precisely crypto market sentiment analysis refers to.

Crypto market sentiment refers to the market trend or mass psychology that indicates which direction the market is moving or which trend the market is following at any given time.

Bitcoin is a dominating force in the cryptocurrency world. Experts have found that Bitcoin’s sentiment, or people’s feelings towards Bitcoin, can significantly impact the prices of other cryptocurrencies.

While there are many sentiment analyses and machine-learning algorithmic trading, Gunbot is not a tool for this type of trading.

The crypto trading bot does the opposite (does not rely on feelings), but crypto market sentiment can influence your automated trading outcome.

This article will talk about leveraging market sentiment to assess current market movements and make more profits.

What is Crypto Market Sentiment?

what is crypto market sentiment

Crypto market sentiment embodies the general prevailing emotion of most market participants and explains current market actions and future market share prices. Market sentiment is an excellent way to understand the attitude of traders and investors towards a market or asset.

It’s a general feeling that you can reveal through the overall activity and price movements. If prices rise, it can show that there is a feeling of bullishness. If prices drop, it can mean the sentiment is bearish.

In making informed trading decisions, you as a trader must weigh many factors that could influence the bias of a coin before deciding on the current and future status of specific cryptocurrencies.

It is important to note that crypto market sentiment is based primarily on the emotions of traders, which is one of the most, if not the essential factor in figuring the profit of a trade.

Types of Crypto Market Sentiment

There are many varieties of sentiment in the crypto market, but you should be interested primarily in the bullish and bearish feelings of the crypto market participants.

When a more considerable percentage of the market wants to sell a coin, market sentiment is considered bearish; if the majority want to buy this currency, the market sentiment is bullish.

When most market participants aren’t sure what to do right now, emotion is mixed, and the market stays neutral.

Crypto market sentiment acts like a fickle lover, changing his mind based on new information altering existing beliefs.

At some point, the whole world could buy Bitcoin in anticipation of a more robust market. The next second, anyone could get rid of it, as they are concerned that Bitcoin will dump due to the influence of some new information, which is almost always the big players’ strategy.

Understanding the present market sentiment and utilizing it properly with other strategies can help you maximize your trading profits.

Because if you can guess what other market participants are thinking and understand why the market is moving in a particular direction, you will execute your trading strategy accordingly.

How does Crypto Market Sentiment Work?

Financial markets, such as the crypto market, convey the dominant opinion of traders on the future direction of their assets. Simply put, traders buy because they are optimistic and sell because they are pessimistic.

In general, if everyone were bullish about the crypto market, then the market would not perform well as the market would be out of balance with buyers, and there would be a significant shortage of sellers.

The reverse is valid for the deep bottoms of the market. As the market hits a low, traders are starting to believe that coins will continue to fall and are not expected to reverse anytime soon.

Such a degree of pessimism paves the way for buying opportunities as traders wait for a sign that the worst is over. Therefore, many traders are confused about the sentiment of the market.

Here’s a general guideline to consider when looking at a particular market and thinking about where it is likely to move.

  • Positive sentiment amid positive price action is natural; embrace it.
  • Negative sentiment amid positive price action is counter movement, buy it.
  • Negative sentiment amid adverse price action is neutral, so be it, stay put.
  • Positive sentiment amid adverse price action is countermovement; sell it.

So, what’s the deal with prices?

The fundamentals of the crypto market are irrelevant when it comes to the importance of sentiment.

Ultimately, everything is based on what people think, how they feel, and what they believe.

Sentiment drives supply and demand, which in turn drives the price.

How does sentiment affect trading?

Using sentiment to trade is a game of awareness. You need to be aware of how emotion is changing, so you can change your strategy accordingly.

You also need to know the broader context, fundamentals, and trends.

This way, if sentiment begins to change in one way or another, you can adjust your strategy, taking the information you got into account and using it as your trading edge.

The perfect opportunity for profit lies in a change in the general crypto market sentiment.

How to Perform Crypto Market Sentiment Analysis

how to perform crypto market sentiment analysis

Extremes of market sentiment are essential in identifying trading opportunities.

Once all investors start trading in the same direction, there comes the point of exhaustion where there are no more traders to continue the trend; therefore, the price of the coin pair starts to change direction.

Once the pair’s price starts to reverse, more and more traders will begin to trade in the lines of the new trend. And they will lead the movement until they decide that it is about to change direction.

Whatever strategy you use to trade, you must know the current market sentiment before trading. Understanding the market sentiment can help you deal more profitably.

Social media heavily influences market sentiment, press releases from popular crypto sites like Coin Telegraph, and the community of specific crypto projects.

One of the main factors influencing opinion is official forums. Crypto traders tend to benefit from the activities run by the official communities of the specific project, like engaging in airdrops and so on.

Likewise, social media can have a significant impact on the general sentiment of the crypto market.

Take, for example, Elon Musk’s Twitter effect on Dogecoin. The big players tend to move the market by their pieces on various platforms. It’s your responsibility as a trader to remain focused and analyze the market confidently.

Trading without considering the prevailing market sentiment or trading based on someone’s tweet can cause a lot of damage to your trading account.

Have you heard the expression, buy the rumor, sell the fact?

It is not cliche, and it happens because it’s hard to make an impact when people are already well-informed. News and events are often priced into the market long before they happen, which means the price will move in the opposite direction once profits are taken.

When studying crypto market sentiment and price action, it can be hard to make sense of all the mixed signals. Therefore I will recommend you a trading strategy that follows specific rules to help you deal with confusion.

Learn more about a Gunbot price action strategy here.

Crypto Market Sentiment Indicators

Most traders and investors believe that group psychology plays a vital role in driving the markets. It’s no surprise, then, that many of the most popular indicators used are those designed to anticipate changes in sentiment among traders.

Sentiment indicators help identify investors’ expectations of the market. More commonly used sentiment indicators include the Volatility Index, Bullish/Bearish Index, Fear, Greed Index, etc.

These indicators are all used as counter indicators, which means that they allow traders to know when a market has reached an abnormal condition and predict an imminent reversal.

The philosophy of such a strategy is best described in the classic Wall Street adage that says: “The crowd is right in the trend but wrong in the turns.”

Best Crypto Market Sentiment Indicators

Here’s more information on each of the top sentiment indicators.

Volatility Index

Initially introduced by Robert Whaley in 1993, it is widely used with other financial markets. You can incorporate it into crypto, and It is a description of the estimated (or implied) volatility of a specific coin for a given period. It is often referred to as a “fear index” or “fear indicator.”

Investors in the crypto market use the Index to quantify the estimated daily change in the index and market derivatives. Whenever the volatility index hits a high level, it means that the market is full of worries.

Therefore, for the opposing trader, an exceptionally high volatility index reading is a bullish sign that the market will likely form a low, and you will establish a new uptrend.

In a case where volatility is oddly low, it suggests that the market is becoming complacent and that a bearish reversal may be imminent.

You can check the Bitcoin Volatility Index (BitVol) here.

Bull and Bear Index

The bull/bear index is another effective crypto market sentiment indicator widely used for Bitcoin. It was built by AI innovation—Augmento. It’s based on data collated from forums, price actions, and other relevant market data.

This AI monitors whether the markets are bullish, bearish, or neutral on the crypto assets. The Bull and Bear Ratio, thus, displays the balance between the analysis made.

As mentioned, sentiment indicators are generally employed to recognize overly positive and adverse conditions. A severe bear market typically coincides with market bottoms indicating Zero (0), while extreme bullish typically correlates with market tops indicating One (1)

Social Media

Social media is an excellent source of gauging the crypto market sentiment.

Tweets, Forums, Telegram – all of these things can affect what the markets will do. While you don’t have to be a news fanatic, you have to pay attention to what is happening around you and adjust your positions accordingly.

News events often affect a crypto’s short-term movement, but inner community events can significantly pressure the market.

A great example of significant events affecting market sentiment is China’s ban on initial coin offerings in 2019. When there is a fundamental change of government rules, people can either get very optimistic or scared.

It doesn’t matter your personal beliefs about governance; you need to be aware that governments come into play probably more often than we would like.

One tremendous example is the google trend. You can maximize its functions and look for keywords about some cryptos trending. Do some research about crypto coins and know when to enter the market.

Whale Monitoring

You don’t always want to play “follow the leader,” but remember that volume moves the market direction. If all the fish are swimming upstream, you could be bold and shift the other focus, but that kind of attitude will most likely end in trouble in crypto.

Pay attention to everything and make sure you place trades that will not blow up your portfolio if the worst-case scenario happens.

If you go into every position looking at the worst-case scenario and have a plan that deals with a trade gone wrong, you will come out ahead more often than not and be a very successful trader.

You can follow Whale Alert on Twitter or in Telegram to know when the big players move some crypto money.

Fear and Greed Index

The fear and greed index is a fundamental strategy used to gauge crypto market sentiment. Because ultimately, traders decide the price of assets, and they don’t act logically; their emotions govern them.

In bullish markets, when greed reigns, it pushes prices too high. Conversely, when prices fall, fear is driving the market. When the crypto market gets pushed up or down by these emotions, the price eventually pulls back to align with long-term fundamentals.

Many markets drop when they reach a bullish peak and rise after a bearish dip; it results from traders pumping prices too notably. These sudden price increases are apparent to see on a crypto chart.

Short-term price spikes never last long, and if you learn how to trade them, you can make money out of the greed and fear of other traders.

It is not enough to detect a market ruled by greed and fear and sell it or buy it; you have to know when the tipping point is approaching; that’s the hard part!

The key here is to monitor price dynamics, support, and resistance. First, watch the price form a high or low somehow, then watch for momentum oscillators to time your entry. If you are new to using momentum indicators, you should make it essential to your trading analysis.

Several factors come into play which is weighted differently. In short, you get a number between 0 (fear) and 100 (greed), where 50 is considered neutral.

Suppose you can make this determination and apply this information by executing several different trading strategies to take advantage of the next expected market move. Then you are good to go.

Check out the Crypto Fear and Greed Index
Latest Crypto Fear & Greed Index

Why is Crypto Market Sentiment Analysis Important?

One of the most important things for a crypto trader is to stay up-to-date on all the conversations and feelings in the cryptocurrency market.

Mass sentiment plays a vital role in the development of market peaks and troughs. Typically, a dip in the crypto market forms when most traders are extremely pessimistic, and a market peak occurs when most traders are ultimately optimistic.

With the recent cryptocurrency increase in popularity, social media platforms like Reddit and Twitter are flooded with discussions. You can use these discussions to understand how people feel about the market and make more informed trading decisions.

To stay up-to-date with the crypto world, you should monitor and analyze data in real-time.

This way, you can better understand the public’s expectations, the perception of a particular cryptocurrency, and changes in trends over time. This information is invaluable if you want to stay on top of the crypto market sentiment.

Fear of the unknown can be one of the biggest obstacles and challenges that traders can encounter. Make sure you take advantage of the best sentiment analysis tools you can find on the market to help you make superior trading decisions.

Regardless of been a long-term investor or scalper, you should be prepared for sudden changes in sentiment. For example, if you’re long on Bitcoin, but the mood suddenly shifts (which can happen instantly), you need to reconsider your strategy based on the new market sentiment.

The sentiment is one of the key drivers in the cryptocurrency markets. If you’re aware of these drivers, you can minimize any losses and deal with sudden changes in the collective’s thoughts and feelings.

Trading over small timeframes, especially, requires that you pay attention to crypto sentiment analysis.

Don’t forget the importance of the psychology of the market cycles

wall st market sentiment cheat sheet

Conclusion

Above are detailed explanations of market sentiment analysis and indicators you can use to improve your trading results.

The sentiment of the crypto market is driven mainly by volume. And it is prudent to follow the market sentiment analysis performed by researching each project before trading.

Now that crypto markets are more transparent, there’s a lot of opportunities for investors to leverage the power of crypto sentiment analysis.

The big question is – how reliable is crypto sentiment analysis?

Crypto market sentiment analysis is an excellent tool to use, but it shouldn’t be the only one you rely on. However, appropriately applied, sentiment analysis can provide you with an outstanding complementary view of the market.

By doing crypto sentiment research, you can have the edge over other traders by better understanding the market. The sentiment score provides insight into the market’s prevailing attitude.

When investing, it’s essential to know what’s going on with the market. The crypto market sentiment is a good signal of where the market stands and what direction it is likely to move in. It can help you decide to sell or buy.

While your intuition and standard trading tools can guide you in understanding crypto market trends, combining sentiment analysis with fundamental and technical analysis will give you a clearer understanding of the current price action.

To be on the safe side, learn and use the three most crucial market analysis resources.

market analysis resources

If you want to make it into the crypto trading business, you need to build a severe arsenal of tricks, strategies, and methods.

Never enter a trade unless you’re sure you should be in the transaction. If you cannot do this preliminary analysis and follow your trading plan, the most likely thing is that you will end up losing money.

Suppose you’re new to cryptocurrency trading and are not that knowledgeable about the hangs of things yet. Never begin any actual transaction until such time that you have perfected your new crypto trading strategy.

Remember, there won’t be any guarantees in crypto, and doing all you can to get rid of any risk has to be done.

Many new traders have seen great success using crypto trading bots. These programs do all of the work for you, and in Gunbot case, all you have to do is install the software, edit your choices and start up the program.

Gunbot is the best crypto trading bot on the market today; it takes most guesswork out of trading. The starting process is straightforward, and your learning curve won’t be that steep, so you can start making winning trades and see your profits accumulate pretty quickly.

If you want to make money in the cryptocurrency market, it is undoubtedly worth considering automated crypto trading. With so many people enjoying the benefits of these systems, they have proven themselves to be a sound investment.

Click Here to purchase your copy of Gunbot Now.

VWAP Indicator Ultimate Crypto Trading Signal

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vwap indicator ultimate guide

Crypto Trading with the VWAP Indicator Ultimate Guide

Learn How to Trade Using the VWAP Indicator so that you can profit from this crypto trading signal. The Volume-Weighted Average Price Indicator Explained.

The crypto market is constantly in motion, making it difficult to know when to buy or sell. In the space of technical analysis, there is an endless variety of technical strategies and indicators.

Fortunately, there are tools like the VWAP indicator that help traders identify these opportune times. Since the crypto market started, traders have been looking for ways to take advantage of these opportunities.

The Volume Weighted Average Price (VWAP) is a technical analysis tool that day traders and intraday traders use to spot entry points and exit in their short-term trades. VWAP can help you time your trades in the crypto markets by letting you know when an oversold or overbought trend is suspected. Its accuracy makes it the perfect tool for this purpose.

Day trading in the cryptocurrency market can be unpredictable. You can measure the progress of the market with the VWAP indicator. Its accuracy makes it the perfect tool for this purpose. The last thing you want is to miss an opportunity because you were sleeping.

There are many indicators that it is often difficult to know the difference between them. Many are variations of the same theme that use the same input parameters and produce similar results.

Before deciding on a trading strategy, it is essential to analyze the technical indicators available and determine what they do. Then choose the unique ones that combine well with other crypto trading indicators and, above all, offer you a trading advantage.

VWAP, or Volume Weighted Average Price, is an excellent technical indicator because it considers price and volume. Unlike moving averages, VWAP weighs more heavily on points with larger trading volumes. The VWAP indicator provides crypto traders with valuable information on entry and exit points and the relative strength of the underlying asset.

The VWAP is not a crypto trading indicator used by the Gunbot core; instead, it is a passive trading tool for investors to accumulate coins at a perceived low-cost price. But, you can use it to manually buy a cryptocurrency cheaply and let the crypto bot handle the sale on automatic for a higher price.

More about automation later. For now, let’s find out why the VWAP indicator is a crucial component of many trading strategies. Here we shall be exploring one of the critical adopted technical analyses commonly used in cryptocurrency trading.

What is the VWAP Indicator?

vwap indicator what does it tell you

VWAP (volume-weighted average price) is, in simple terms, the average cost of a coin over an average period, weighted by the number of assets traded over a specific time. Many traders use the VWAP indicator as an essential benchmark for the overall order flow throughout the trading session.

For big-sized account traders, they use the VWAP to assess where the best possible entry price might be, for example, if your entry is lower or higher than the VWAP at the moment.

If you buy an asset that says you are entering the market below the VWAP for the best possible results. Because many believe that if you buy this asset, you will buy it with volume.

The VWAP is also that strategy that shows how volume is pouring into the market daily. One way to use this knowledge is to determine what type of market you are trading in; Is it a trendy market or the other way round? Once you have a reply to this, use the full potential of the VWAP indicator.

In a non-trending market, you may want to consider fading or buying/selling if the price moves away from the VWAP. Whereas if the market is trending, you should consider buying the lows and selling the highs on the VWAP. Let’s explore more on this.

VWAP Indicator

There are many practical and less stressful techniques to using Volume Weighted Average Price. Most times, You can use the VWAP indicator to establish a bias in the direction of the trade. Other times you can follow the market price against its high-low position throughout the day.

On a day of large upward and downward fluctuations, it can be difficult to orient yourself to your position on the futures chart; you want something that reflects a neutral position.

This particular indicator performs a little better than the moving average, but that still doesn’t stop it from falling.

It’s always satisfying to set a normative value for the sum that combines volume and price movement. It’s like having a GPS in a vast forest; at least you know the spot where you started the day and can quickly come back to that spot.

Some traders seem to lose track of their positioning on any given day, making it challenging to define trends or bracketing parameters.

What does the VWAP indicator tell traders?

VAWP indicator is a great signal to filter information from other technical analysis tools.

For example, a trend in a MACD or a Stochastic may indicate strength or weakness in the current price movement. Still, when these indicators are combined with the volume indicator, the trend may be confirmed or contradicted.

We will say more about volume analysis; this includes the tools, methodology, and guide to help you set up a profitable trading strategy.

Volume analysis indicators are great tools that support the technical analysis of other indicators. You should also know how the price trend is motivated to confirm the strength of their trading position and make changes if necessary.

We know that the VWAP indicator is a tool that buyers use to find suitable entry and exit points. When crypto traders need to dump a prominent position, they want to sell at the VWAP or higher.

Professional traders regularly use several intraday VWAP strategies to answer three key questions:

  1. What is the current average price?
  2. What was the price at my desired entry point?
  3. What is the average price over the last X hours?

Application of the VWAP Indicator

Using the VWAP indicator as a crypto trading benchmark

Understanding volume-weighted averaged price is vital for successful crypto trading. We often hear the comment, “the increase in volume when prices go up is bullish, and the increase in volume when prices fall is bearish.”

That’s probably all we can hear when people talk about trading cryptocurrencies with the VWAP indicator.

A good understanding and application of volume analysis can provide a good deal of price action and the psychology of traders, especially when prices are near support and resistance levels – where volume plays a role essential to support any change in trend.

By itself, the volume is not necessarily significant; you should read it against recent and average prices. Let’s look at ways you can apply VWAP.

Add Moving Average

It is essential to add a moving average of the volume on your chart, eg. For example, a 50-day moving average will show the average volume for the last 50 days.

With this added moving average line, one can quickly measure the characteristics of the day’s volume and compare it with the trading volume of the last days and its relative position over the 50 days.

For example, on any given day, the price fell, and the volume rose. How do you know if most of the traded volume was near the day’s high? Or most of the traded volume was at near the day’s low.

We won’t know if we’re only looking at the data at the end of the day. If the day low coincides with a strong support level and most of the increase in volume was near the day’s low, it may mean that the reversal may occur soon, as traders increase their purchases at this level of support.

Therefore, we cannot say that it is bearish when there is a sizeable descending candle with a high volume. We do not have enough information to reach this conclusion.

VWAP can be used on any timeframe to access if you’re being overpaid on a long (buy) or underpaid on a short (sell).

VWAP Indicator Overbought Area Example

vwap overbought area

VWAP Indicator Oversold Area Example

vwap oversold area

Another example would be selecting the Stochastic Oscillator and the Relative Strength Index (RSI) as overbought/oversold indicators. Both indicators deal with short-term price extremes and capitalize on a medium reversion trend.

A simple way to avoid overlapping functions is to determine the most crucial input parameters and then choose a technical indicator for each parameter.

Arguably the two most important trading factors are averaged price and volume of an asset (in that order).

Selecting an exclusive price trading signal is a relatively easy thing to do. For example, a trader might use an RSI, a Stochastic, Exponential, or Simple Moving Average (SMA), or many others. However, it is pretty hard to find a technical volume-only indicator.

There are many combined price/volume indicators, such as the Klinger Oscillator. But they do not offer the price independence sought for the second indicator.

How to Calculate the VWAP Indicator

The VWAP model is straightforward to use. With a simple export of volume and price, you can know the historical trade bands.

VWAP, for the most part, acts as a trend confirmation tool. In its simple form:

Sum VWAP = Sum (price + volume) / Sum (volume)

Sometimes software bots use VWAP’s “iterative” calculation because it is easier to maintain in the database and prevents general software from running at less than optimal speed. It uses the last value of the VWAP as the basis for calculating the VWAP in the next operation.

You don’t have to worry about calculating the VWAP values manually because crypto trading software tools like Tradingview do it automatically. All you need to do is specify the number of periods to be considered in the VWAP calculation.

Gunbot and the VWAP Indicator

gunbot vwap indicator

As I said before, Gunbot doesn’t include the VWAP indicator in its native strategies. But you can still use it for targeting or confirming your entries, and if you got the Gunbot Ultimate License, you could send those VWAP signals with the Tradingview addon for the bot to execute.

Tradingview Addon Settings on the Gunbot GUI

tradingview settings on gunbot GUI

Otherwise, you can still open your position manually if you like to use a VWAP indicator strategy.

Trading Strategies with the VWAP Indicator

When trading using the VWAP indicator, there are different types of strategies you can follow. Examples are the VWAP Pullback, VWAp Fade, VWAP Afternoon High, VWAP Parabolic Short, and many more you can adapt to your cryptocurrency trading style.

Be careful; one of the biggest mistakes traders make when using the VWAP indicator is assuming that a break over or under it automatically means it’s a buy or a sell signal.

It’s easy to get the idea that you should buy or sell a coin if its price is near a specific area but, it is not that easy. What you need to check in the charts is how the price reacts to the VWAP area. If you blindly buy or sell a coin expecting it to reverse, you might get burned.

After researching the volume-weighted average price indicator, I have learned that the most popular setup for crypto day traders is the VWAP pullback. The logic is that the price will pullback in an uptrend before eventually continuing to go up.

Hence, the VWAP pullback strategy allows you to take advantage of that opportunity in the market.

The breakout entry is perfect for crypto traders who are new to the VWAP indicator. If a coin is testing VWAP on the downside, wait for it to close above the VWAP line and make your buy. Essentially, you want to enter a trade when the price is ready to rise again.

VWAP Breakout Example

vwap indicator breakout strategy

These rules can also be applied when you’re trading in the opposite direction, provided you’re taking care of the risks.

To quantify your risk tolerance, you need to find out where you are in your crypto trading journey and how much trouble you can handle so that you can choose a trade option that’s right for you.

Like I said before, you can enter manually and let Gunbot exit at your desired profit percentage above your bought price. If you got, your risk defined in your strategy settings would be manageable for you to profit from this simple strategy.

VWAP Consolidation Strategy

The consolidation strategy means you buy below VWAP and sell above VWAP. You can consider the consolidation method as a mean reversion strategy.

When you get changes in a volume model, this should see it as a red flag. Volume changes are often a warning of a trend reversal before it happens. You might be okay with more volume in rallies and less volume in lower price reactions.

Suddenly the volume decreases during gatherings and increases during reactions. That tells you something. There is a good chance that a price reversal is imminent.

When price trends are above the VWAP (VWAP cross), traders are willing to buy higher than average. Volume is a measure of the intensity of buying and selling pressure. It is the belief behind a price movement. The higher the volume, the larger the price movement is usually.

During a healthy uptrend, the volume will increase as prices rise. When prices fall, the trading volume tends to be below average; this is true for an individual asset or the market as a whole.

Price and volume analysis is an excellent tool for making a lot of money on the crypto market. Traders are willing to buy lower than average when price trends below the VWAP (VWAP Cross).

When prices go up or down, and there is a decrease in volume, it is interpreted as a weak price movement because it has tiny traders’ strength and interest.

Benefits of Using the VWAP Indicator

Making a lot of money is the goal of any trader or investor. Price and volume analysis are the tools that will help you achieve this goal. When you do, everything in life is based on odds or probabilities. It is no different in the crypto market or anywhere else for trading.

To be a good crypto trader, all you need to do is put the odds in your favor when trading. A great way to roll the dice in your favor is to analyze the charts correctly. They offer a unique understanding of the market.

VWAP provides a clue as to whether the asset is in demand or its price gets dumped. With both directions of price movement, the higher the volume, the greater the price action.

Supply and demand: Analyzing prices and volumes on a chart will record supply and demand. When the need for an inventory, called purchase orders, exceeds the supply, called sales orders, the price must increase. If the supply exceeds the demand, the price must go down; this is the story of trading coins in crypto.

Since the markets are controlled by humans and human nature never changes, you will have a significant advantage if you analyze the charts correctly. The graphics are an accurate recording of human psychology; this is why you see recurring price patterns on the charts.

These models can be used to predict the future movement of a coin or the market in general. If you are successful, you will earn a lot of money.

Here are the three main benefits of the VWAP Indicator

  1. Bull or Bear Market Indicator: The VWAP will indicate to you when the crypto market is bullish (price above VWAP) or bearish (price below VWAP)
  2. Shows the Best Price to Buy or Sell: Crypto trading is not always about buying or selling exactly “when” there is a signal. Sometimes it’s better to be patient and buy or sell at the “best” average price possible.
  3. Average Price Instead of Moving Average: The VWAP allows investors to know when to enter and exit the market with greater accuracy and without disrupting the crypto market like day traders who follow trends.

The VWAP is an excellent indicator for choosing which altcoins to buy. However, it becomes more powerful when used with other trading strategies.

You can use the VWAP formula to gauge if a coin is currently in an uptrend or downtrend. The VWAP can help you as an investor make more educated trades.

Other Volume Crypto Trading Indicators

Volume is the indicator that technical analysts constantly look at to determine whether a move in the markets, a single token, or a single market has conviction. It can also be the easiest to understand all the indicators.

We look at volume from a dynamic perspective; we see a level recognizable buy and sell because the trading volume is essential.

Moving Average Volume

A Volume Moving Average (VMA) is like any other moving average, only applied to volume instead of price. It helps smooth out a coin’s volume surges, making it easier to see an altcoin’s general trends and volume patterns.

VMA typically plots/overlays the volume indicator, showing the average volume over the last number of bars/periods. The default is typically 20 periods; however, you can adjust the input values according to the period of use.

The volume moving average on crypto charts and graphs can help you see if institutional and professional traders are buying or selling.

Statistics like these can help you judge the short-, mid-and long-term trends of the cryptocurrency market and, if you’re lucky, make accurate predictions.

Volume Oscillator

VO uses the difference between two moving volume averages to determine whether the trend is up or down. The rapid volume moving average is usually throughout 14 bars/period. Slow volume moving average is typically 28 bars/period.

Periodically, analysts wonder whether the length of these periods is appropriate or not. Some say 14 and 28 are too conservative, while others argue that these numbers are not sound enough. Many short-term traders use 5-10 (fast MA) and 20 (slow MA) as entry values.

This indicator outlines favorable prices above the zero line and unfavorable prices below the line.

  • A favorable price implies enough market support to continue driving price activity toward the current trend (up or down).
  • A negative value implies an absence of support, and that prices may start to stagnate or reverse.
  • A price more than zero indicates that the moving average of the short-term volume has exceeded the moving average of the long-term trading volume; this shows that the short-term trend is higher than the long-term trend.
  • An ascending volume oscillator usually suggests a strengthening of the trend, while a falling volume oscillator usually suggests a weakening of the movement. But this is not always true.
  • Rising prices with higher volume in the short term are bullish, as are falling prices with lower volume. Falling prices with greater trading volume or increasing prices with less volume indicate market weakness.

The volume oscillator confirms the price movement. When the volume is low but the profits and losses are large, the pros are likely to be overly enthusiastic about a possible turn in the market.

Conclusion

The VWAP is a popular way to measure the average price of an asset and is a standard indicator that you can use on many trading platforms and charts. The VWAP calculation is more effective for intraday trading because it is a lagging indicator based on historical data rather than just recent happenings.

With volume indicators exposing a lot of volume activity relative to what price is doing, negative divergences are exposed early before the market collapses to the downside. Additionally, individual investors and traders can now see that the asset is at significant risk of a top or correction and avoid buying on a top.

It’s easy for online investors to get caught up in the idea that buying coins below the VWAP is a good thing, but it can be too simplistic. Buying coins at a discount is great, but you shouldn’t ignore the upper cap of the VWAP.

For example, if you buy coins at a discount and the price continues to dive on an already downward solid movement, you may be left with coins worth less than what you paid for them.

Though it might seem like you are getting a bargain, there are drawbacks. If you buy coins under the VWAP, but the price keeps plummeting on a solid downtrend, you may end up losing money in the long run.

Consider the reasoning. Would you buy under the price when it’s on a downward trend?

The size of the distance from the VWAP that coins are purchased or sold is a crucial component. But given all other factors involved in day trading, it can’t be the only thing to analyze.

Tradingview and other charting tools allow you to plot the VWAP on intraday charts alongside indicators such as moving averages. These nuances will give you the best chance of maximizing your day-to-day trading software to help you with your VWAP related trades.

When starting with the VWAP indicator, you will not want to use it blindly. Trading on price action alone takes many years of experience.

Learn to crypto trade with Gunbot faster than everyone else. Get your Gunbot Licence Now

Gunbot Systematic Trading Trade Crypto Effectively

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gunbot systematic trading trade crypto effectively

Gunbot Systematic Trading the Ultimate Guide on How to Trade Crypto Effectively

Gunthy encourages its customers to become disciplined traders and trade crypto responsibly with their Gunbot systematic trading software. Cryptocurrency trading is engaging and fun but is a serious business, and you should treat it as such. Otherwise, it can generate losses that lead to financial and emotional distress.

Learning the basics of crypto trading is as easy as ABC, and you need to gain the fundamentals of price movements. I mean, you can decide to buy low and sell high.

Everyone understands that if you purchase something for $1 and sell it for $3, you are making money, and if you buy something for $3 and sell it for $1, you lose money.

So why don’t most traders do just that? Doesn’t that seem obvious and straightforward?

What about technical analysis, where trading techniques and principles come into place? You can familiarize yourself with chart patterns that reflect the most feasible price movements in the market, trend-following indicators, and all the technical analyses.

However, if you don’t learn how to trade crypto effectively with a systematic trading algorithm like Gunbot and take action for each of your trades, you might find yourself chasing shadows.

All successful systematic traders trade responsibly. You won’t find a successful trader who blames others for losing their money on an asset.

Responsible trading is the first step in becoming a successful trader.

Putting aside emotions and taking full responsibility for your trades, both profit, and loss, is the common trait of successful traders.

Let’s explore the tips and guides to help you trade effectively with a systematic trading system.

What is Responsible Crypto Trading?

understand what is responsible crypto trading so you can trade crypto effectively

Understand what responsible crypto trading is so that you can trade crypto effectively.

Responsible crypto trading is an exercise in control and accountability. It means acknowledging when trading may not suit you, so you don’t go over your means.

Trading isn’t gambling. You should never risk money that you can’t afford to lose.

If you want to make money in the crypto markets, you have to take a different approach. It would be best to feel comfortable enough to trade independently and follow your own rules, which are necessary to profit from trading cryptocurrencies.

To those who want to profit, trading is not a hobby; it is a serious business. If you’re going to make consistent profits, you need to respect what you do and look at each trade as a business decision. Have a plan beforehand and execute it on time.

The first thing you should do when making a trade is to follow your trading plan. An effective trading plan will help you justify the transaction, and it should outline your rationale for making the trade.

You should be clear on your objective and execute the trade actually to make a profit.

The Disciplined and Responsible Crypto Trader

Many beginners approach crypto trading without a plan, however. They fail to take the time to detail their trading strategy correctly, and when they do, they often don’t follow it.

Trading is tough, but those who want to succeed must learn to take responsibility for their crypto trading activities. In “The Disciplined Trader,” Mark Douglas observes that traders avoid creating rules because they do not want to take responsibility for what happens due to their trading.

Some traders pretend that trading is just a way to relax, but that’s not always the case. Mark Douglas says that traders will often use an excuse like “it’s just a hobby” to avoid responsibility.

Did you lose some money? You could minimize your worries by telling yourself that it’s not essential. If you approach trading as a hobby, it will be easier to ignore your setbacks and losses.

However, if you don’t take crypto trading seriously, you won’t be able to give it all you got, and because of that, you won’t be making the Bitcoin profits you’ve been dreaming of.

When things don’t go well, it can be easy to make excuses. It may make you feel good in the short term, but eventually, you will start to notice that you’re avoiding responsibility.

The more excuses you make, the less confidence you will have in your trading decisions.

When you want to make profits, you need to take the reins of your actions. To be an effective crypto trader, you must take responsibility for your decisions and actions.

Taking responsibility doesn’t mean berating yourself when you mess up. It just means taking charge of your trading and gaining more control over your actions.

What’s the best way to handle a market you can’t control? Managing your risk and measuring your trading achievements will help you determine what works for you and what doesn’t.

You can decide which setups to take and which structures to avoid, and you can choose to trade only under market conditions advantageous to your strategies and trading style.

The smart crypto trader will be able to identify what he can and what he cannot control.

If you want to be a winning trader, take responsibility, identify what you can control, and take responsibility for it. If you feel in control, you’ll enter a winning state of mind.

That means you’ll feel relaxed and alert, and ready for opportunities. Once you’re in that state, you can profit big time.

10 Tips to Help You Trade Crypto Systematically and Effectively

ten tips to trade crypto systematically and effectively

Most traders, usually novices, focus on the trading strategy, charts, and indicators—essential elements, without a doubt. But many crypto “victims” miss a crucial point that kills their accounts in the first three months of trading.

Let’s look at these tips to help you manage your account and trade safely.

1. Take Responsibility for Your Trades.

So your first step to effectively start trading crypto is to realize that you are responsible for all of your operations. It would be best to take personal responsibility for your operations, even if you have a mentor, because it is your account and your duty to be in charge of it.

More importantly, if you take responsibility for your actions, you learn about your mistakes and consider it a learning experience.

When you make yourself accountable for missing a bull run, you’re more likely to see loopholes and find out what you did wrong. From there, you can learn not to make the same mistakes again.

Taking responsibility can also help you develop an effective, systematic trading strategy.

If you try to trade everyone’s plan, it may work against you because other people’s approaches may not work for you.

The only way to make a profit is to develop a reliable strategy that you are comfortable with. If you operate based on the opinions of others, you may not feel comfortable and make mistakes — leaving early or holding out for too long.

Ultimately, the most important thing you can do is take responsibility for your trades. If you don’t, you are just counting on luck to come and save the day. And if you’ve ever gambled, you’ll find that this is a terrible long-term strategy.

Once you take personal responsibility for your operations, fantastic things will happen. You can learn from your mistakes and become a more substantial, more efficient trader.

2. Secure Your Exchange’s Trading Account

Account security is an essential part of effective trading. It’s baseless if you’re trading all the strategies of this world and your account is not safe. It’s vital to ensure the security of all your data.

Your account’s security can get compromised in many ways, and a good hacker usually knows how to get around these. Therefore, your account names and password enforcement will serve you to keep people honest.

The use of authentication and choosing solid passwords with symbols can improve your account security. You can easily ask for a PIN or password to sign in every time you turn on the phone or start the computer.

When it comes to protecting your account, there is no room for compromise. You must block all threats circulating on the internet and keep your wallet private and safe. Keep your 12-phrase verification safe also, and make your passwords impenetrable to strangers.

Make sure you’re taking advantage of the security features that Gunbot offers to protect your money. When you first gain access to your GUI, you’re prompted to create your password.

Otherwise, you won’t be able to run the bot. After that, you should make a two-factor authentication, which is not mandatory, but I will highly recommend it.

gunbot 2fa security feature

If you’re running the crypto bot from a VPS and want more security layers, ensure you enable SSL for your Gunbot GUI.

3. Create a Reliable Trading Plan

Once you’ve secured your account, you need a solid crypto trading plan to avoid any pitfalls.

It would be best to create a trading plan that outlines a trading strategy and a list of guidelines to follow to implement that strategy. Learn more about creating a crypto trading plan here.

The only problem with this advice is that newbie traders don’t really have any trading experience and therefore get lost when developing a trading plan.

Another problem with restrictive trading plans is that beginners are told to treat their goals like the gospel and not deviate from them. A restrictive trading method prevents traders from adapting their strategies and rules to improve performance, a critical step in every trader’s learning curve.

Essentially, a reliable trading plan is a financial protocol that helps you move from point A (current financial situation) to point B (your financial goals). The first step in a solid plan is, therefore, to keep your financial goals in mind.

Rather than creating rigid rules at the start of your trading career, it would be best if you viewed your business plan as a living, breathing set of guidelines, which you can change as you learn more.

Here are some questions you can ask when you’re setting up your guidelines:

  • Markets: Which markets will you focus on? Be as specific as possible. What type of asset are you focusing on? Are you trading on Spot, Futures, Margin, or all?
  • Timeframe: Will you be a day trader who focuses on trades that last a few minutes or a swing trader who holds transactions for a few days?
  • When to trade: At what time of day will you be trading? You may have external responsibilities that prevent you from functioning for an entire trading day. Pick the times of the day that best suit your lifestyle.
  • Risk Management Rules: This is an essential and often overlooked part of your trading plan. How will you manage your risk, both per trade and overall? How much leverage
  • Stopping Losses: You should have a “stop trading” point, a fixed dollar amount that will force you to stop trading if you are in your feelings.
  • Mentor: Who do you follow, and from whom do you learn as a teacher? Learning to trade on your own is boring; you should always network and get wisdom from other traders.

You can repeat the mistakes of other professionals and eventually hope to learn the lessons and techniques they have learned, or you can learn from successful traders and avoid those initial frustrations.

Here my recommendation will be to shop for a crypto bot license and join the Gunbot community, so you can interact with other experienced traders and benefit from the Gunbot systematic trading system.

4. Use Stop-limit Orders Effectively

Stop orders allow you as a trader to limit both the price you buy an asset and the price you sell. One way to avoid buying a coin at a much larger price is to use a stop-limit order.

A stop-limit order removes assets that a person owns if their value begins to fall. Many people who are new to trading may not realize that they can also set a stop-limit order.

Using this more flexible restriction allows a trade to be made when the crypto market suddenly changes.

A buyer who places a maximum price in an offer has made a stop. Let’s say BTC was selling for $50.000, and the buyer could indicate a maximum bid of $51.000. You would buy the BTC if the cost did not exceed $51000 before the offer could hit the floor.

This plan can prevent you from risking more than what you want or have budgeted.

However, it can also mean you’re missing out on a profitable opportunity. In some cases, the value of the trade increases rapidly due to important news. Those who place definitive limits on their offers may be excluded from most of the benefits of a transaction.

You can control your trades while retaining the ability to get fast-moving coins. This type of trade protects you from purchasing assets much higher than the original offer. At the same time, it offers a range in which you can make the purchase.

A stop-limit order allows you to trade within a flexible budget framework, protect yourself, and at the same time profit from market dynamics. Whether you are a newbie or a seasoned trader, you should use this tool in your trading strategy.

You can use stop-limit orders in your Gunbot systematic trading system. You can find the stop-limit feature in the GUI on the miscellaneous section of the strategies. The default setting is 9999 (disabled), so you will have to input your desired value.

The number you’ll add in the stop-limit parameter will be a percentage at which you want to sell (below break-even) at a loss.

gunbot stop limit settings on GUI

5. Pay no attention to FOMO

FOMO means fear of missing out and is the leading cause of stress amongst traders. The worst fear for traders who suffer from Fomo is the phrase, “Dude, we Have Fun Making Money, and You’re Not!” 🙂

If you’ve ever felt the fear of missing out on crypto, you need to know that you’re not alone. FOMO is a genuine issue in the crypto community, and it can lead to terrible mistakes.

The “fear of missing out” mentality can be seen with people who invest in ICO scams, sell crypto too early when it dips, and buy tokens that never go anywhere.

You may be affected by FOMO whenever you want to go to sleep, and the market is bullish, or get news to sell when the market is bearish.

FOMO is like a disease often filled with anxiety and restlessness due to the absence of a specific event — for someone who has missed out on several incredible trading stories.

It’s vital for you as a trader to do your homework. Do your research on a particular asset before investing. Many coins are leveraging naive traders, feasting on their emotions and their fear of missing out.

It’s your responsibility as a trader to research before trading an asset.

Note: Be careful of who you listen to. The advice you hear might not always be trustworthy. Influencers and publishers might even purposely cause FOMO to support their agenda.

Hold on to the basics and read the charts. If your coins look worthy and the fundamentals are present, stick to your strategy and keep your emotions in check.

Do you know what we say to FOMO? Keep Calm and Gunbot 🙂

do not listen to fomo

6. Avoid the Revenge Trade.

One thing to avoid is trying to get revenge in the crypto market. Crypto trading is exciting. Therefore, the thrill of catching a big hit and racking up coins is a never-ending quest for many.

Searching the newsletters daily for signs of a new trend and the potential to win big is compelling for beginners and veterans alike. The potential, ease of use, and relatively low entry barriers make cryptocurrencies attractive to many people.

As a trader, you should control the overwhelming emotional response to the loss of one or more trades which results in the desire to immediately (and unconditionally) recoup any losses you have suffered.

This emotion often occurs after suffering one or more losses while trading crypto, especially futures.

This phenomenon is not openly discussed, and getting around this behavior is not easily accessible to new traders. It can even happen when you’re working diligently to control losses strictly.

Maybe you have been a bit compulsive or even unlucky and end up with a considerable loss.

This loss often gets into your emotions, and the need to end the day by earning at least some money would be so huge that you will do anything to get it, even by taking massive and unwarranted risks and engaging in aimless trades.

It is imperative to avoid this type of “get even” behavior because you will lose your account quickly. You should always stick to your daily trading plan and live with it.

Forget about revenge. Keep trading emotionless with your Gunbot systematic trading technique!

7. Diversify Your Portfolio

When trading, it is common to diversify your portfolio to minimize risk. It’s almost impossible to predict how the market will perform, and each asset class (like spot, futures, and margins) has its features.

By diversifying your trades, you can take advantage of “highs” and limit “lows.” Diversifying a portfolio means investing in different asset classes and investing in multiple securities within each asset class.

The basis of diversification is that even if one or two of your investments go wrong, you will have many more that will reassure you and prevent you from losing everything.

Diversification not only protects your funds but also smoothes out your rewards.

A portfolio with a single asset is likely to have highly fluctuating returns, while a portfolio containing various other coins will have more reliable and less volatile returns.

However, diversification only reduces but doesn’t eliminate risk. Most of the time, these coins follow the trend of Bitcoin, so you should diversify your altcoins by holding stable coins as these assets typically operate at regular market prices.

Allocate your assets, calculate an estimated risk factor for each investment or potential loss, then integrate the expected reward or gain. Also, assign them based on a safe risk/reward ratio, which is vital for success in any investment.

Another way to diversify your portfolio is by trading on other exchanges. Did you know you can trade on eight different exchanges simultaneously with the Gunbot Ultimate Edition?

8. Understanding Crypto Leverage

Leverage is the actual position size ratio to the amount of money you have to deposit (or reserve) to control the position (margin).

For example, if your position size is $50,000 and the margin is $500, your leverage is 1:50, which means that to “trade” with $50,000, you must reserve only $500 for the margin.

If the leverage is 1:100, you will be able to control $50,000 with only $250 and so on.

Some trading platforms offer an advantage of up to 100x. But be careful; leveraging your trades can be dangerous for you.

So regardless of your trading platform, you should be very careful with your risk management and don’t overexploit leverage. Because, as the example above shows, the temptation to use a high advantage can be deadly.

One thing you shouldn’t forget about leverage is this: Leveraging can increase your potential profits and possible losses. Keep that in mind.

9. Using Crypto Trading Technology to Your Advantage

As a trader, you can safely assume that the person trading against you is taking full advantage of what technology has to offer, and he’s there to take your money. Do you want to be at a disadvantage?

The best cryptocurrency robots today are becoming an increasingly popular method for trading the crypto markets. Using crypto trading bots is a great way to break into the trading niche by leveraging technology.

An automated cryptocurrency trading algorithm makes trades for you based on the settings you have input. Most crypto bots come with predetermined parameters or strategies which are, for the most part, customizable.

So, you can tweak these trading methods to your style to make profitable trading decisions.

If you want to make money in the cryptocurrency market, it is undoubtedly worth considering automated crypto trading. With so many people enjoying the benefits of these systems, they have certainly proven themselves to be a sound investment.

By opting for a crypto robot, you can allow the bot to trade exclusively for you and trading alongside it to maximize your potential. Using a robot in this fashion means you have a “staff member” working for you.

With the Gunbot systematic trading method, it’s pretty feasible to build up a team of robots to trade on your behalf. Allowing you more free time as you focus simply on managing your accounts instead of developing your manual trading systems, which can take weeks at a time.

You can also take advantage of platforms like Tradingview, where its trading charts can tell you a lot of information about the markets. With endless views and analysis options, you can try out different strategies without paying for them.

Using tools like “backtesting” can help you avoid costly mistakes by using historical data to test real-life scenarios before putting your hard-earned money on the line. That’s another way to trade crypto effectively!

Last but not least, you can take advantage of portfolio management apps like FTX Blockfolio to check your investments across hundreds of exchanges. Learn more about Cryptocurrency portfolio trackers here.

10. Develop a Long-term Trading Perspective

When we start a big undertaking, we want to be successful. The first few moments of a significant life turning point can be critical.

Well, what if you failed immediately? When trading, it’s essential to stay on task even when you fail at first. The initial disappointment can haunt you if you allow it to.

We all want to be successful right away. Hey, sometimes we are. But when we’re not, it can be discouraging. It might even shake our confidence and interrupt our positive thoughts. Despite this, we must keep the proper perspective when approaching trading.

It’s easy to focus on the loss of a single trade. But you should also keep in mind that trades are just one part of the bigger picture.

Understanding the outcome of a series of trades is more critical than focusing on any individual trade.

Don’t get me wrong, paying attention to the amount of risk you take on each trade is key to your financial and mental health. For example, if you have your whole salary riding on a single trade, it’s not worth fooling yourself into thinking that trade is insignificant.

Therefore, limiting your risk on any single trade is crucial to your financial well-being.

The bottom line is that you shouldn’t put your hopes on a few trades. If anybody feeds you with a “get, rich quick trading” dream is time for you to wake up. Thinking you can quickly make a few trades and get set for life is not valid.

Once you come to terms with the fact that losses are inevitable, you will begin to take fewer emotional risks with your trades, and you will experience a positive outcome in your trading performance.

As a responsible trader, your focus is to be in the game of trading crypto effectively for the long haul.

Gunbot Systematic Trading

gunbot systematic crypto trading method

Trading is always a balancing act. Some trades are planned out in advance, while others are spontaneous. But the most successful traders are the ones that have a plan and use the right tools, including both full or partial automation, to gain an edge in the market.

The point of taking advantage of the Gunbot systematic trading model is to create and use a set of strategies that can cut any human emotions out of your trading decisions.

Systematic traders are essentially users like you trading the crypto market through an algorithmic trading program like Gunbot.

How can systematic trading help you?

Automating your trades is a great way to make decisions in a fast, easy, and measurable way. As a manual trader, you also have the option of trading systematically, but you only have so many hours in the day.

Gunbot systematic trading includes defining trade goals, risk controls, and rules. Systematic trading may have manually traded these systems, but most people automate their trades to make decisions with minimal human input.

Have you ever wanted to make your trading decisions systematically? This mechanical investing system is the best way of defining the rules that can execute your trading decisions in a very organized manner.

Here’s a fun fact: Most crypto traders are not traders at all. You see, most people use systematic trading to make investment and trading decisions in an organized manner.

What does this mean? It means that you can define your entry, exit, and risk management rules in your bot trading strategy. By automating and predefining your decisions, you can sit back, relax and let the bot execute your commands.

As a rule, you will be using technical indicators to detect market trends immediately and then take positions in those markets, trying to profit as those trends develop.

What’s the first rule of trading? Understanding the importance of each of them and how they work together, so only traders who have the patience and discipline to keep these rules in mind can increase their odds of success in such a competitive arena.

The Gunbot systematic trading system gives you a fantastic opportunity to make money, but you must stick to the rules. Following these trading principles will help you establish a viable trading business.

The main logic in automated trading is to trust the system. Any change on the predefined set of variables can create risk, and following the same set of variables over and over is proven to be a safer bet.

When you create a strategy, there are certain expectations for it. It should be clear in your mind what it will do and how it will react to different scenarios.

So there’s no need for you to worry about the trades themselves because you know they will be executed when the opportunities appear in the market.

Look at it this way. When your chosen pair meets A, B, and C criteria, Gunbot will (buy) open a position. It’s as simple as that. And, because your system includes an exit strategy, the crypto bot will have X, Y, and Z parameters in place to protect your risk.

Gunbot Systematic Trading Advantages and Disadvantages

Gunbot Systematic Trading Pros:

  • Virtually Emotionless: The trade risk gets significantly reduced when you have a set list of rules to follow. Gunbot systematic traders can drastically reduce the possibility to second-guess themselves during the process. You shouldn’t be affected by FOMO or FUD like a manual trader could.
  • Consistency and Reliability: Your system-based trades rely on technical variables, so they’re repeatable, which will give you regularity and the ability to execute the same pattern trade as many times as it appears on the market. And since you’re using automated software, you know the bot will quickly identify and capitalize on opportunities.
  • Considerably Safe: While there’s no sure thing in crypto trading, the Gunbot systematic trading approach can be considered “safe.” Because its regular spot trading strategies are thoroughly analyzed before they’re deployed, the trading bot won’t sell at a loss with its default settings. Trading with Gunbot is somewhat safer.

Gunbot Systematic Trading Cons:

  • Low Flexibility: There will always be a pattern that isn’t perfect, and the cryptocurrency market can be illogical. The most significant disadvantage of following a strict system is that it can not account for all circumstances. In contrast, with discretionary trading, investors can exit their position early if there is a disruption in the market. But in systematic trading, there is no room for instincts.
  • Complexity: You can create a very complicated Gunbot systematic trading strategy that relies on a long list of variables and confirming indicators. While this is not the bot’s fault in itself, still, it gives you the option. Therefore, you should know that a solid trading system includes a mix of firm enough parameters to manage the risks successfully but loose enough to spot opportunities.

In the end, the Gunbot systematic trading method successfully works when you set your strategy with the correct variables and conditions. With that been said, you must remember that no plan is guaranteed to work in all market conditions.

The most important thing to remember about the Gunbot systematic trading is that it requires trust, and you need to use it responsibly. You need to have confidence in your bot and identify market opportunities for what they are.

Conclusion

Success comes to those who seek and act consistently.

Keep in mind that most people ready to engage in crypto trading do not have any prior training but are prepared to learn and excel in the asset they have decided to trade.

The above tips can help you trade crypto effectively if you’re committed and stay true to your plan. You need to continually develop and familiarize yourself with the pros and cons of crypto trading.

Learning to discipline yourself through win-lose dilemmas will help you improve your skills and become more analytical in due course.

Trading is a big responsibility. It can be a tough job, and it’s easy to rely too much on your emotions if you’re not careful. When you feel fear or greed, always have a trading plan that you’ll hold on to no matter how emotional you feel about the situation.

When trading, don’t get too caught up in the “winning kick” of one trade. Be sure to focus on the big picture of your gameplay. A winning deal is not a bad thing; it’s just another step in the path of building a profitable crypto trading business.

Remember: Ultimately, it’s the accumulated profits that will make all the difference.

If you’re ever in a situation where it becomes hard for you to reduce your daily trading, you’re feeling stressed or having negative thoughts because the market keeps moving against you. Stop trading altogether, take a break, and understand that your ability to trade responsibly has been compromised.

Continued education on every aspect of crypto trading will help you take advantage of unique, high probability opportunities in the crypto market. Keep practicing and building confidence in your methods; success will follow naturally.

Don’t forget to do your research, and that CryptoDROI is here to help. Purchase your Gunbot license today for instant access to the state-of-the-art Gunbot systematic trading system.

7 Ways to Cope with Crypto Trading Loss Now

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deal with crypto trading loss

Check out 7 Ways to Cope with Crypto Trading Loss and How to stand up and come back more powerful.

A crypto trading loss can be huge financially but emotionally devastating, so let us state you have assumed a confusing misfortune and find out what to do to survive it.

We don’t want to take losses, and we’ll go to great lengths to avoid them. Losing is painful, so our instinct is to look for pleasure and avoid pain. It’s easier to deny taking a loss, so traders come up with many ways of doing this, such as holding on to a losing trade or not acknowledging their failures.

Now comes the part where you ascend over the mismanage you have made in crypto trading. What can you do now? Don’t worry. It isn’t the apocalypse. The critical point here is the question: How do you react to a crypto trading loss?

Your first step is accepting the fact that losses are the norm rather than the exception.

As a new crypto investor, you are expected to make a lot of mistakes while trading cryptocurrencies. Some errors can cost you tons of money. This article will explain the various mistakes many early traders make and how to cope with a crypto trading loss as you trade this ultra-volatile market.

I will show you seven ways to deal with a crypto trading loss. Then I will explain to you how Gunbot can protect you from trading losses. Let’s begin!

Have you ever thought about why you’re losing money in your crypto investment?

Most new crypto traders have the same question, especially after a bear run in the markets. Sometimes the best answer is simple, or you can answer with another question. Am I been patient?

Are you having second thoughts about crypto? Rushing to sell at a loss due to FUD (Fear Uncertainty and Doubt), or even losing faith in crypto, in general, could lead to devastating losses.

Maybe you don’t have to cope with a crypto trading loss if you analyze what could have made you take that loss in the first place. So, let’s see some of the mistakes you could have made before buying.

Are you investing more money than you can afford to lose?

As cheesy or redundant as it may sound, don’t forget this golden rule. Never put money in an investment if you can’t afford to lose it. You should always invest unneeded funds. While it may be difficult, refrain from investing the money you need to survive or pay the rent.

Cryptocurrencies are notoriously volatile, so if you’re holding onto them, it’s imperative to make sure you have enough cash to cover any losses. You can set aside extra money or invest in stablecoins.

Keep it simple: Take calculated risks and only invest what you can afford to hold for the long-term.

Crypto Trading Loss Research

understanding the risk before you start trading is essential

Are you doing your research?

It would be best if you were careful not to fall for scam coins. Scam coins are products that are put on the crypto market to raise money from investors. They do not offer a usable product. Most of these coins fly off the market and disappear after being around for a short while.

Doing your research is very important regardless of your trading style or even if you’re trading with a bot. The world of cryptocurrencies is still a wild one.

There are so many exchanges, new cryptocurrencies being developed, and it’s relatively simple to create one. So, these new altcoins become the breeding ground for low trading volume and increased volatility altcoins, those with scammers who can “pump and dump” them.

Cryptocurrencies are high-risk speculative investments. Understanding these risks is essential before starting to trade. Here are 3 of the most significant risks of trading crypto.

  1. Crypto is volatile: Market sentiment can change in an instant, leading to big moves in prices. Unforeseen changes in opinion or a quick drop in the altcoin market can lead to a sharp decline in prices.
  2. Crypto is unregulated: Cryptocurrencies can be affected by their regulations. Sometimes a government will decide crypto, and the prices will change. The crypto’s rise has been suppressed every time a government has cracked down on them, and each country has a different approach to implementing them.
  3. Hard-forks or shutdowns can strike crypto: Crypto trading holds additional risks such as hard forks. When a hard fork occurs, there may be substantial price volatility around the event. A cryptocurrency can be shut down or exited by its developers and suspended or delisted from trading on the exchange.

You’ve heard it all before. “Crypto is easy money.” It’s the false notion that many are led to believe in when they first hear about blockchain technology. But in reality, there is nothing easy about making money through trading any financial asset, whether stocks, forex, or cryptocurrency.

If someone tells you otherwise, they’re probably trying to trick you into making crypto mistakes.

7 Ways to Manage a Crypto Trading Loss

how to cope with crypto trading losses

Have you ever had a situation where you were sure that you would win but somehow lose? It isn’t charming, but you have to admit that it’s a part of winning. And to help you with that, here are seven ways to deal with a crypto trading loss.

1. Taking Ownership of It.

Losses happen to traders all the time. Some losses are due to bad luck, and some can be attributed to inexperience. The key is to understand that you must take responsibility for your orders. You cannot blame others or be passive.

Take it like a grown-up. Realize that you have committed an error, and it is a reality. Quit accusing any person or thing else.

Taking ownership of a slip-up is the beginning. The sooner you understand that errors happen and will happen at any point, the sooner you will get once again back into the game.

If you continue to repeat the same mistakes, you will not grow as a trader. When something goes wrong, take responsibility for it. Acknowledge how it may have been your fault.

If you do this, then there is less chance of the problem occurring again. Blaming others for what went wrong will make you feel angry and frustrated. Instead, let go of your hostility and work on figuring out what could have been done differently.

I’m not saying you shouldn’t take a break and analyze what went wrong, access the situation, and review the cause, all that is part of coming back stronger.

When you trade, you control the experience, even if you’re dealing with a bot. You can modify your strategy or trading style or even change the market you’re trading.

2. Gain from It.

Each error is a learning experience. A negative experience is a great motivation to keep learning and developing new skills.

Regardless of your self-importance, greediness, or some imperfection in your estimations or method, there is always something to learn. At any rate, you comprehend what not to do next time.

It’s always a bummer when you lose money. Now, instead of being discouraged about it, be motivated to read more, better educate yourself, become more disciplined in your execution, and so on.

Next time, you’ll have a better idea about what happened and where it went wrong. You’ll have room for improvement, and you’ll be stacking the odds in your favor!

The crypto showcase isn’t as unforgiving as you would suspect. It is a landscape of possibility and opportunity.

3. Attempt Another Way.

1. What was your strategy? 2. What indicators did you use? 3. What were your trading rules?

Ask yourself those three questions since now you know the weak points in your strategy, rethink if you would change that part alone, or attempt another way.

Disappointment allows us to glance at our arrangement from far off to give us a more incredible picture.

Have you been having a lot of trades like this? A crypto trading loss is a perfect opportunity to get ahead of the problem and make some changes to how you trade.

On the off chance that the issue is, by all accounts, your dread of losing or a framework that doesn’t fit you, you can, without a doubt, try a superior and new crypto trading strategy once you open your mind to it.

4. Evaluate the Impacts of the Slip-up.

evaluate the impact of the slip-up

What are the progressions from your past circumstance?

You may find that you are not more awful off. You may be exaggerating somewhat about the circumstance. Be that as it may, on the off chance that the slip-up has broad impacts, at that point better to show them.

You can assess which impacts you have to fix along these lines and which you can fail to address.

For instance, you may have lost some trades, yet you will find that it is plausible or not by posting the advantages and disadvantages on the off chance that you can see an opportunity to recoup it.

When you’re having a tough time, trading can be challenging. You may want to “play it safe” by skipping trades, or you might feel like you need to get back to your old winning ways quickly.

Unfortunately, these approaches can only serve to make the situation worse. A significant loss can affect your confidence, and that can cause emotional issues when you trade.

5. Get More Organized.

You needed an order before. Right now, it is the most obvious opportunity to wake up and make a solid new strategy where you will base every one of your choices.

Please get familiar with the indications of your mistakes to maintain a strategic distance from them.

When a lack of confidence disrupts your trading, making a few small trades and working on the problem is essential. It will allow you to complete some transactions and earn some profit.

Trading again will build your confidence in your trading abilities.

To get back into your usual pattern, start small by making a few trades that you are very confident in. Make a few exchanges for a small profit and regain the confidence to take on more significant transactions.

Trading should not be about luck or emotions. Emotional trading is not a sound strategy; it’s gambling and will make you lose more money quicker. If you win, you will think it’s a success and try it again, but that isn’t a good strategy either. Please don’t engage in it!

It would be best if you were not trading based on revenge or fear either. It is best to plan your trades out carefully beforehand because if you don’t, you will have to take more risks on transactions you barely scheduled for.

I know you’re feeling anxious and restless about your trading system, and you want to get back in the game ASAP. Don’t worry; the crypto market will not go away tomorrow.

It would help if you took this time away from charts to work on new ideas and keep learning to improve your trading.

6. Come Back Stronger.

I realize it is easy to state, yet the best thing to do is toughen up and get back in the game. Investors don’t call crypto trading one of the best ways to make money online for no reason.

When you see an altcoin dropping, for sure, another is rising somewhere. There is an opportunity for profit anywhere in the cryptocurrency marketplace. Remember that your success is right around the corner if you tread wisely and take the right risk management approach.

When you feel like you’ve lost your way, go back to the basics. Going back to the fundamentals includes focusing on the trading plan, adjusting it as necessary, and implementing it well. It might be a wake-up call when you hit a bump in the road, and the market is letting you know that you’re off course.

Finally, consider that you’re not alone. Before and after you, there have been and will be others that have taken a crypto trading loss. That might sound harsh, but it is how it works. Others have to take losses for somebody to win, and they have learned their lessons from failure.

Crypto trading is complex and challenging, but you have to keep learning and repeatedly trying until you finally make money with it.

7- Get Gunbot

Take advantage of Gunbot features that help you cope with a crypto trading loss. Yes, Gunbot has a safety switch that will protect you from losing your hard-earned money.

Let me explain, Gunbot has a set of parameters that you have to set to make sure it works, but once you’re done, it will be impossible for the bot to trade at a loss.

Most Gunbot strategies won’t place a sell order below the break-even point. Read More about strategy protections on the Gunbot Wiki.

Gunbot has different trading strategies, and these methods have protections. For example, some plans will buy only once. Another parameter you can use is (buy level) to protect you against buying above the lowest EMA.

Why is a trading bot important to your crypto trading loss?

One of the main features of Gunbot is that it comes with many strategies included. These rules will give you a trading structure and will allow you to plan. A trading plan with risk and expected gain gives you a goal to aim for instead of trading aimlessly.

Emotions and the urge to overtrade is a common problem newbie traders face. If you set your strategy and define your targets, you can relax and watch the bot executing the trades.

Setting your trading rules helps you to remove the pressures that can cause you to overtrade. It also keeps you disciplined because it gives you a structured plan that you can stick to.

Gunbot also includes other perks like being part of a solid crypto trading community, where you will get lots of ideas and tips. You will gain valuable crypto trading information by reading or asking questions in the Gunthy exclusive telegram groups.

Automatic Trading Handling a Crypto Trading Loss

gunbot trading chart showing trading losses

An automatic trading system allows you to forget about the operational monitoring of the system since the entire process of calculating orders and sending them to the market is done automatically by the program.

In my opinion, the fundamental aspect of a trading system is that its rules of action must be 100% objective. And do not depend on the subjective interpretation that the investor can give it.

After years of experiencing the development of professional automatic trading systems, I can safely say that the key to making money investing with a trading system is to manage the risk that you are willing to assume appropriately.

Sadly most new investors do not like to talk about risks, and they’re only concerned with knowing how much they will earn. Please stay away from that line of thought, which, in my opinion, is a huge mistake.

Earning money investing with automatic trading systems will be the consequence of having done your homework correctly in the process of selecting the strategies you’re going to operate.

And the key is to choose a trading method whose risk characteristics are aligned with your profile as an investor.

Therefore, the critical question is: How much are you willing to lose?

Yes, it may seem complicated to talk about losses. And it is probably not a good marketing idea. But it is realistic.

Suppose you are not able to do this preliminary analysis. In that case, you will most likely lose money because you will focus on choosing trading plans you think are making money without stopping to analyze if those automated trading systems are suitable for you.

You can be lucky and select some methods that will make you earn money in the short term. But in my opinion, you are here to try to make money consistently in the long run.

And therefore, the more importance you give to the need to control the risk of your investments with automatic trading systems, the better.

Again, your main focus when using a strategy is on controlling risk. Do that, and you’ll keep your crypto trading loss under control.

The important thing is to know how much you earn for each unit of risk you assume. And seek strategies that are not necessarily spectacular in absolute results but consistently achieve good results with highly controlled risk levels.

Lastly, you may ask the question. Why don’t more traders succeed?

It’s not because of their lack of skills, but because of their lack of determination. Though it may be difficult, starting after a losing streak is necessary for success.

Quitting before you learn the skills needed to become a successful trader will make you part of the vast majority who cannot trade crypto successfully. Don’t give up; become part of the few profitable crypto traders.

One last tip. Did you know that you can report your crypto trading losses on your income tax?

If you have made any crypto losses, the IRS recommends that you report them. Reporting your crypto trading loss on your taxes can potentially lower your tax liability by claiming deductions or offsetting your income. Learn more about how to file your crypto taxes here.

There you have it, seven ways to deal with crypto trading loss. I genuinely hope this article can help you grow as a crypto trader, and stay tuned for more crypto trading and Gunbot articles.

You’re now a more knowledgeable trader. Are you ready to take your trading to the next level?

Your first step is grabbing your copy of Gunbot now so that you can start your journey into profitable cryptocurrency trading the easy way. With the support of a crypto trading bot!

trade like a pro, get gunbot

Crypto Trading Tax Guide Bitcoin USA Taxes

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crypto trading tax

Crypto Trading Tax How to Deal with Taxes on Crypto Assets

Don’t stay in the dark. Discover Everything there is to know about crypto trading tax in the US with this Bitcoin cryptocurrency taxes Ultimate Guide.

The United States is a country where cryptocurrency investors must record every trade they make. Without reliable crypto trading tax information, this can become a problem.

It’s a great thing that the IRS has decided to make a ruling on this subject, but it’s not always easy to understand. That’s why I’ve created this article. It contains everything you need to know about the IRS guidelines and how you should go about filing them each year.

One important thing to know before you read this article is that CryptoDROI doesn’t provide tax advice. I put this guide together for informational purposes only, and it shouldn’t be considered tax advice.

I strongly recommend you consult with a professional who can provide accurate information about your tax situation. The information below applies to the USA tax requirements only.

The world of crypto trading is a complex, fast-moving space that is growing massively every year. It’s difficult for many to keep up with everything that’s going on in the crypto space, which means that many traders don’t take the time to understand their obligations when it comes to filing taxes on their cryptocurrency trades.

In the US, with Bitcoin and other cryptocurrencies at all-time highs, the IRS is watching. Since 2014, the IRS has determined that you should treat cryptocurrency as a capital asset rather than just a currency.

If you own cryptocurrencies like Bitcoin or Ethereum, you need to know how it impacts your tax liability every time you buy it or sell it.

How much crypto tax will you have to pay? You may have heard that crypto trading tax is complicated. It’s not! The first thing you need to do is figure out how cryptocurrency is taxed.

More importantly, with a trading bot making hundreds of transactions per day, you must understand that you need to report those profits or losses when filing your tax report and learn about programs that can help you with that.

Let’s look at a quick guide to crypto trading tax in the United States of America. I will make this more of a question and answer. I know you have got many questions as a crypto trader/investor; we shall look at them now.

Crypto Trading Tax: Do I have to pay taxes?

us taxpayers requirements

If you are in any way into cryptocurrency, whether you are a trader or an investor, you are expected to pay tax. The IRS is serious about knowing how you conduct your finances.

They can impose penalties ranging from a warning to a lien against your property to a criminal investigation if you fail to report crypto income.

The IRS considers coins an asset, similar to having land property or any other possession that can appreciate, not a currency in that sense.

Therefore, the tax rules apply to the property, but not the property tax rules. Transactions, such as selling collectible coins or vintage cars that can appreciate, also apply to Bitcoin, Ethereum, and other cryptocurrencies.

Not adhering to the crypto tax laws could attract the disciplines inflicted by the IRS. In the tax returns form, the IRS asks you to answer “yes” or “no” to the question:

Have you had received, sold, sent, exchanged, or otherwise acquired any financial interest in any virtual currency during the year?

When calculating how much you owe in taxes, you need to consider if you earn profits with your cryptocurrency for a “short-term” or “long-term” period. This distinction will also affect how much you have to pay in crypto taxes.

Short-term capital gains and losses are when you buy and sell an asset within one year. These assets will be taxed like regular income, like wages, salaries, commissions, and other earned income.

Long-term capital gains and losses are when you buy and sell an asset you hold for over a year. The tax rates for long-term gains are usually lower than those for short-term gains.

What crypto transactions are taxable

Here, it is essential to weigh your crypto trades to know if you can pay taxes. You should value your trade reports at their markets price in USD.

More like, if you buy a doughnut with bitcoin, the bitcoin exchange must equal the cost of the doughnut (fair market value) in dollars.

Here are some examples of what crypto activities are taxable:

  • Sale of Cryptocurrencies for Cash: Do you make investments in crypto? You may be obligated to pay taxes on your crypto gains. If you sell your crypto for more than you paid to purchase it, you may owe taxes like you would on any other investment.
  • Selling or Paying for Goods and Services: You accepted payment in cryptocurrency? Receiving compensation for goods or services in cryptocurrency is just like receiving cash. If someone pays you with cryptocurrency, it counts as income, and they might also owe taxes if they make a profit.
  • Buy one cryptocurrency with another: Crypto Trading Tax. When you trade one cryptocurrency for another, you owe taxes on any profits you make in the transaction.
  • Received Crypto for Mining: You mined cryptocurrency. Do you need to pay taxes on your earnings? Yes, you are responsible for paying taxes on the entire value of the cryptocurrency you’ve obtained by mining.
  • Received crypto Through an Airdrop: What if you got some free cryptocurrency? When companies reward people with crypto, they’re paying them taxable income. When someone is given cryptocurrency through an airdrop, it counts as taxable income.
  • Received Crypto Rewards: Crypto as a reward? It might be taxable! If you earn virtual currency as a part of a company’s marketing promotion, you’ll need to report it as taxable income.

If I buy something with crypto, is it a taxable event?

Probably, but it depends on the rules in your country/jurisdiction. If this is considered a taxable event in your country, you will pay capital gains taxes (the asset valued while you had it).

For example, let’s say you bought 1 Bitcoin for $ 1,000 and then bought a car with that Bitcoin. At the time of purchase, Bitcoin was worth $ 20,000. The $ 19,000 in capital gains is taxable.

Crypto Trading Tax – Contributions

cryptocurrency contributions

Contributions Earned in Crypto and Tax Implications.

What happens if I donate my cryptocurrency?

In the United States, if you donate your cryptocurrency to a tax-exempt charity recognized by the IRS (for example, a 501 (c) (3) organization), the IRS does not require you to pay capital gains on the transaction. As explained earlier, you donate based on the value of your crypto to the market value.

What if I receive gifts in crypto?

When you receive a gift in crypto is probably the only time you don’t get to pay tax. This gift is not expected to be a taxable event until you sell your coin.

Does earning cryptocurrencies instead of buying them exempt me from being taxed?

Most countries consider obtaining cryptocurrencies as a barter transaction (payment in kind). Still, you will be taxed as if you had earned an equivalent amount of fiat currency as income.

For example, if you won a bitcoin worth $ 1,000, you will be taxed as if you had earned $ 1,000 in revenue.

How frequently is tax obligatory on cryptocurrencies?

The United States operates on a pay-as-you-go tax system. Pay as you go means that taxes are withheld for the entire year when you get payment from your employer. When you run a business, you pay taxes quarterly.

Owing more than $1,000 in capital gains during the year makes you eligible to make quarterly payments, owing less than $1,000; your fine is an annual payment.

IRS’s example of quarterly capital gains taxes.

From your rough estimate, if you are paying too much or less, you can correct this at the end of the year by using Form 2210 (Underpayment of Estimated Taxes by Individuals, Estates, and Trusts).

If you fail to make your estimated quarterly payments when requested or pay too little, you will be charged a fee.

Trading crypto within an exchange without fiat money?

Trading altcoins remained a taxable event and treated the same as selling your crypto for fiat and then buying the new crypto with that fiat currency.

The taxable event is the sale of cryptocurrencies (whether for crypto or fiat money), not if you withdraw money from an exchange.

Are you receiving a coin from a holder?

There is some debate on treating forked currencies (e.g., as a stock dividend, etc.) as the IRS has no authoritative guidelines.

That said, the more conservative and sensible approach seems to follow the well-established “hidden treasure” doctrine, whereby the IRS has long considered “found” money to be a taxable event.

So, for example, if you own a Bitcoin (BTC) and you received one Bitcoin Cash (BCH), the BCH you received should be reported as ordinary taxable income (not a capital gain). Regardless of you are selling your BCH or not.

Additionally, your new BCH will be part of your reported income, and it is what you will use to determine capital gains after selling your BCH.

There is also a debatable question on the exact method of calculating the fair market value of BCH. For example, there may be a lag between when the fork occurs and when you take charge of the forked coin; this depends on whether you are employing a local wallet or an exchange wallet.

A simple and straightforward approach is to take the price when the forked currency (BCH) is available in your wallet (either on an exchange or in a local wallet) as the base price and taxable income.

Some argue that the cost base should be zero for forked coins and that all benefits should be seen as capital gains, although this is a more aggressive approach. If you don’t know what to do here, ask your tax professional.

Airdrops and Crypto Tax Implications

Airdrops are similar to free money received in a raffle, where a lottery is generally taxed as expected income measured at fair market value on the date of receipt.

If it’s stored in your crypto wallet or an exchange, it’s not yet taxable. Cryptocurrencies received are taxable when you can transfer, sell, trade, or do something with them.

So what is the crypto tax guideline for what is not taxable?

Here are some tax-free events to consider:

  • You’re tax-free when you buy cryptocurrency with fiat money. For example, if you buy BTC or ETH with USD.
  • When you transfer your cryptocurrency between wallets or exchanges. (provided that you don’t trade it)
  • You’re tax-free when you give up to 15k in crypto as a gift.
  • You’re tax-free when you donate your cryptocurrency to a charity or nonprofit organization.

How do I evaluate my capital gains?

The simplest and most conservative method is first-in, first-out (FIFO). FIFO means that the first coin you buy (chronologically) is counted for a sale.

The alternative is a specific ID identifying what currency is spent from history using another method (e.g., highest in, first out [HIFO], last in, first off [LIFO], etc.).

For example, let’s say you bought a $700 bitcoin in 2014, a $7,000 bitcoin in August 2016, and a $6,000 bitcoin in November 2016. Then you sold a bitcoin in December 2017 for $18,000.

Using the concept of FIFO, your capital gains would take the income of $18,000 and subtract the first bed cost for that currency ($700 as of 2014). This would translate into a long-lasting capital gain of $18,000 – $700 = $ 17,300.

Using the concept of HIFO, the capital gain would be $18,000 – $7,000 = $11,000.

Using LIFO it would be $18,000 – $6,000 = $ 12,000.

The IRS guidelines are boldly stated on their page, and it says that FIFO and specific credentials can be used for both stocks and bonds, but there is no official and precise rule on cryptocurrency yet.

There is a debate in the community as to whether the IRS will accept a specific ID.

The more conservative approach is to use FIFO, although clear identification may have more tax advantages.

Always resort to your tax experts when it comes to a personal issue or official advice.

The tax rate for my crypto income. What is it?

In the United States, the amount you pay in federal taxes on your crypto income depends on holding time and your regular tax rate.

If you have owned coins for a year or less, they are considered short-term capital gains. In this scenario, the income is added to your payment for tax purposes and taxed at your regular income tax rate.

Once you have held the coins for more than a year, they are considered long-term capital gains. Based on the ordinary income tax rate, the income is taxed between 0 and 20%; in this scenario, your tax bracket will be lower than the short-term.

For example, let’s say your yearly pay is $50,000 and you are single. On January 1, 2016, you bought a bitcoin for $ 400 and sold it on January 1, 2017, for $ 1,000.

You have a short-term capital gain of $ 600, which, taxed at your regular tax rate of 25%, translates into a tax of 0.25 * $ 600 = $ 150 additional federal tax.

Instead, let’s assume your yearly revenue is $50,000 (still a single deposit). You buy a bitcoin in early 2016 for $400 and sell it in mid-2017 for $1,000. You have a lasting capital gain of $600. Your regular tax rate is 15%, and your constant capital profits rate is 0%.

Hence, you don’t pay federal tax on this bitcoin sale (state taxes may still apply).

Crypto Trading Tax Guidance

crypto trading tax guidance

Where can I get cryptocurrency tax advice?

Talk to a chartered accountant (CPA), registered agent, tax attorney, or another tax professional familiar with your financial situation and local tax laws.

Forms You May Need if You’re Crypto Trading in the USA

The IRS Form 8949: Do you have any transactions that qualify as a capital gain or loss? Fill out this form using your transaction reports from different exchange platforms.

The IRS Form 1040: Mainly referred to as Schedule D, and it is the core of your capital gains and losses.

The IRS Form 1099-MISC: The Miscellaneous Income form is used when you earn $600 or more in a tax year. You can report income from awards/participation fees; most notably, file your taxes.

Schedule 1 (Form 1040) You can use the Schedule 1 form if you earned crypto from airdrops, forks, or other “income” as crypto wages or hobby.

Schedule B (Form 1040)  You would use the Schedule B form if you earned staking income or interest rewards from lending your crypto.

Schedule C (Form 1040)  You may need to use Schedule C as a sole proprietor to report income if you’re in business for yourself.

Prepare your forms and consult a tax planning professional. Declaring cryptocurrency on your taxes shouldn’t be a DIY project.

How to Reduce Your Crypto Trading Tax

You’ve been putting off understanding crypto taxes, but now you know it’s just part of paying your taxes. But you also want to keep your tax bill as low as possible.

Here are four helpful strategies to reduce your IRS payment.

  • Turn your short-term gains into long-term gains: If you want to save on taxes, hold your cryptocurrency for at least a year to take advantage of the long-term capital gains rate.
  • Balance your capital gains with your capital losses: If you have a capital loss from a cryptocurrency sale during the year, you can use it to balance your capital gain on another crypto or an investment that has been appreciated.
  • Gift some crypto assets to a family member or close friend: The IRS has no problem with you gifting up to $15,000 per year per person without tax consequences. The recipient might be low-income enough not to have to pay taxes on the appreciated property when it’s sold. And for you, you might owe less in taxes than if you were to sell the cryptocurrency yourself.
  • Cashout on a low or no income year: Since the tax rate on your long-term capital gains is based on your taxable income — as it is for many taxpayers — then if your taxable income goes down, your tax rate on those gains will go down as well.

How can I calculate my crypto trading taxes?

Unlike long-term investors, crypto traders have to pay taxes on all of their trades.

When you trade crypto, you must pay taxes on the difference between what you’ve sold it for vs. what you originally bought it for, minus the fees that the platform charged.

What about your crypto losses?

Reporting your losses to your tax agency is hugely important to your crypto trading tax savings. Because reporting your losses to the tax agency is one of the best ways to reduce your cryptocurrency taxes in the future.

As you can see, tracking your transactions and calculating gains and losses can get complicated, mainly if you use a trading bot that makes hundreds of trades a day on different crypto exchanges.

For this reason, it is highly recommended that you use software that is specifically designed for tracking crypto transactions.

These crypto trading tax software will calculate the value of your currency at the time of the trade and calculate capital gains or losses based on that information.

Crypto Trading Tax Software

crypto trading tax software

Here are 3 of the best crypto trading tax software on the market today:

  1. CryptoTrader.Tax is a cryptocurrency tax software built to save you time and maximize your refund. Crypto Trader Tax claims you can get your taxes done in minutes and offer features like Free Report Preview and International Support. They’re also Official TurboTax partners.
  2. Cointracking is the leader of crypto tracking and tax reporting. CoinTracking is a powerful app that lets you track and analyze your crypto trades. It provides real-time reports on profit and loss, the value of your coins, and more.
  3. Koinly provides a seamless and easy process for importing and syncing with the ledger. Connect your ETH, BTC, and Tezos wallets to Koinly and automatically import your trading history from exchanges.

There are many other crypto tax software solutions, but these are my favorites based on my personal preferences.

So, I suggest you choose the right crypto trading tax program for your needs because you could find one that offers a unique feature you may want.

In the end, the most critical thing about cryptocurrency tax software is how it can automatically import your investments and trades from different wallets and trading accounts.

This automation takes most of the work out of crypto taxes, so automating this process can save you extra work hours.

When you’re looking for the best crypto trading tax solution, make sure it requires the least amount of input from you to file your taxes.

Gunbot Crypto Trading Tax

gunbot transactions in a chart on GUI

Gunbot is a leading provider of automated crypto trading bots for cryptocurrency investors. The company integrates with significant crypto exchanges to allow users to trade across multiple exchanges via one unified trading software.

When you’re trading with Gunbot, tracking your crypto can be a pain. Believe me, when you’re trading several pairs across five or more exchanges, questions like:

What pairs did you trade? How much you bought? Where you bought it? How much you sold it for? What was the fair market value?

Questions like that could drive you insane. 🙂

Trading crypto with a bot is simpler than ever before. You can buy and sell coins on multiple exchanges and even transfer altcoins from one to another.

There’s just one problem: Tracking cost basis and fair market value data for all of these trades is complex.

And as you’ve learned in this article, you must report each of your trades accurately when you file your taxes.

Hence I’ve also given you some information about crypto trading tax tools that will help you import your trade history and generate your tax reports with the click of a button.

Note that I have no affiliation with any of the crypto trading tax software I’ve mentioned in this article, nor I’m recommending one as better than the other, simply do your research and choose what’s best for your needs.

The answer to the crypto trading tax problem is to aggregate all your crypto info into one place. This includes data about coins that you have bought, sold, traded, air dropped, forked, mined, exchanged, or swapped.

You should also include information about coins you have received. When you collect all of this data in one location, you can build an accurate tax profile.

Crypto Trading Tax Reporting Tips for High Volume and Algorithmic Crypto Traders

If you don’t want to use software, there are ways to keep your trading records. Keep in mind that it would take manual work from you to follow these methods if time is not an issue.

  • Download Your Trading History from the Exchange: Keep track of all your cryptocurrencies! If you’re not keeping track, don’t worry – most cryptocurrency exchanges allow users to download a CSV or PDF file of the user’s entire transaction history. Then you can hand that information to your tax advisor.
  • Use a Specific Identification Calculation Method: Using this strategy, you want first to identify and sell the cryptocurrencies you bought at the highest price. If you have all the data for your transactions, you can use specific identification methods like LIFO or HIFO, drastically lowering your cryptocurrency capital gains taxes.
  • Take advantage of your losses to help to reduce your taxable income: You might be surprised to learn that using your losses can be beneficial. You’ll report them on Form 8949, just like the capital gains, but they will reduce your taxable income instead of adding to it. Thus, you’re saving money by filing your crypto losses.

If you’re a full-time Gunbot Trader and you live in the US, you may want to check if you’re eligible for a “Trader Tax Status.”

Traders who qualify for a Trader tax status can enjoy a variety of significant tax benefits.

One of the most important is that trader tax status allows a deduction of a business expense. Another is that it unlocks various other perks that can save traders a good deal of money, such as not paying capital gains taxes on every trade.

Qualifying for Trader Tax Status (TTS) means that you can use business treatment for trading expenses. TTS is also a precondition for electing Section 475 MTM ordinary gain and business loss treatment.

For more in-depth information on trader tax status, see IRS Topic No. 429 Traders in Securities.

Crypto Trading Taxes Around the World

Even though this article is based on information for US taxpayers, I would like to touch briefly on some basic international ideas about crypto trading taxes.

Are crypto transactions legal? When it comes to cryptocurrency, laws, vary from country to country. Current regulations are still being analyzed, but crypto’s decentralized and anonymous nature is at odds with how governments want their citizens to behave.

While many countries are still trying to decide how to handle the issue, parts of the world are legalizing crypto transactions. Your responsibility as an online trader is to analyze what law applies to you based on your countries’ legal status before taking any steps.

Most countries are now actively thinking about what to do with cryptocurrencies as they don’t want to miss out on tax revenue and believe that they need to regulate this market space for consumer protection.

The big deal for the government here is the potential for increasing revenues by taxing the profits generated in the decentralized market. The central question addressed is whether to treat crypto as an investment or as a currency.

Until now, most governments have been inclined to view crypto as an investment, like any other product whose profits are taxed according to a capital gains model.

Some governments view crypto only as a currency with fluctuating relative value and use similar tax rules for foreign exchange transactions and investments.

It has been challenging for governments to enforce tax rules as there are no consistent global laws that require crypto exchanges to report their transactions to the government.

The international and distributed nature of the decentralized market makes it almost impossible for a country to know all of its citizens’ transactions.

Conclusion

With so many countries setting up regulatory bodies and developing correct regulations, the “rules” will likely be dynamic for a few years as governments examine what goes well and what does not work.

Here the advantages of cryptos are that a government or a central bank does NOT control them.

However, when it comes to tax, in the United States, it is an obligation to report gains and losses on every trade or when you win cryptocurrencies, even if the profits or losses are not significant.

And it is expected of you to avoid any form of tax debts or tax evasion. Else, the IRS holds you responsible for reporting all income and transactions, whether or not you receive a tax form from a crypto exchange.

Don’t forget that, as a general rule, crypto and related investments are complex and risky. It’s best to consult a tax professional before making any decisions.

Remember: I put this guide together for informational purposes only, and it should not be considered tax advice or a personalized recommendation.

CryptoDROI does not offer any financial advice, including trading, investing, or any similar crypto activity, including your crypto trading tax decisions.

I like to think of taxes this way: If I have to pay a lot of money on taxes, it means I made a lot of money. So what are you waiting for? Grab your copy of Gunbot so you, too, can start paying taxes on your big profits!

Crypto Trading Tax Resources:

Official IRS Guidance PDF: https://www.irs.gov/pub/irs-drop/rr-19-24.pdf

Publication 544: https://www.irs.gov/pub/irs-pdf/p544.pdf

Cryptocurrency Tax FAQ: https://www.irs.gov/individuals/international-taxpayers/frequently-asked-questions-on-virtual-currency-transactions

IRS Publication 550: https://www.irs.gov/pub/irs-pdf/p550.pdf

The Wyckoff Trading Method Explained

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wyckoff trading method

Discover the Wyckoff Trading Method and Use it in Your Daily Trading

The Wyckoff Trading Method is a logical approach to long-term investing and intraday trading used by many successful and knowledgeable traders.

This method involves reading price bars and volume to deduce the purpose of institutional traders, referred to as “smart money.” By anticipating future price movements, you can profit from them.

The crypto space is full of opportunities for investors and traders. Sometimes it can be challenging to figure out how to proceed without guidance.

The Wyckoff trading method is an emotional-free approach to trading and investing. The Wyckoff investor’s toolbox includes systematic techniques that help traders and investors reduce risk and increase their chances of success.

Applying the Wyckoff approach can be difficult due to the many variations in how the market action can play out. However, the foundation on which the method is based is quite simple.

In simple words, Wyckoff is a technical trading strategy that combines trading principles and simplified charts to identify market patterns.

The basis of the Wyckoff trading method consists of two goals, three laws, and five steps, all of which can be stated in relatively few words. Anyone who builds their understanding of the Wyckoff approach on this foundation can always be successful, no matter how complex the market curves are.

One of the goals of Wyckoff’s approach is to generate profits on a sufficiently consistent basis, that they exceed the available rewards of fixed trade where the return is guaranteed, and those returns exceed the guaranteed returns of a margin wide enough to make an effort worth it.

Generating profits is not the most crucial goal of the Wyckoff trading method. The most important objective is the preservation of capital. Every time you enter a market, you are putting your money at risk. There is no way around it. However, you can still manage the risk.

Wyckoff teaches that you should take no position unless you have a predetermined exit strategy. Markets offer tips as stops and options that help manage risk. One or more of these tools must always be in place when taking a position.

Protecting capital should never be an afterthought. Having something in mind to do later if developments warrant it often does nothing until the pain of loss becomes excruciating.

Is it possible to apply the Wyckoff trading method to Gunbot? Absolutely! After reading this simple crypto trading article, you will learn how to implement Wyckoff’s logic in your automated trading activities.

The Three Laws of Wyckoff

the three laws of Wyckoff

The three laws underlying the Wyckoff trading method are the law of supply and demand, the law of cause and effect, and the law of effort vs. results. Let’s see how we can apply these laws to the cryptocurrency markets.

  1. The Law of Supply and Demand Applied to the Crypto Market
    The price of each trade rises or falls due to an excess of demand over supply or supply over “wants” expressed in the form of urgency to exchange dollars for assets or exchange assets for dollars.

The law of demand says that at higher prices, buyers will demand fewer crypto assets. In comparison, the law of supply states that sellers will supply more crypto assets at higher prices. These two laws interact to determine the actual market prices and volume of assets traded on the crypto market.

2. The Law of Cause and Effect Applied to the Crypto Market
The law of cause and effect establishes that the excesses that develop in supply and demand are not random but result from key market action events or preparation periods. The Wyckoff trading method teaches what these developments are and how to judge when they occur to take advantage of the excess supply or demand that will follow.

In other words, when accumulation is the cause, an impending uptrend will be the effect. By contrast, when the distribution is the cause, an impending downtrend will be the effect.

3. The Law of Effort vs. Results Applied to the Crypto Market
This law indicates that the evolution of the price of a coin is the result of an effort expressed by the volume level, and the harmony between action and outcome favors a more significant growth of prices. In contrast, the lack of balance promotes a change of address.

When the price action and volume are in tune, it means that the trend is already confirmed. It is most likely that the trend will continue on its course. However, when the price action and volume are not in tune, it is more likely that the trend will consolidate or even reverse.

The Wyckoff Composite Man Logic

Richard Demille Wyckoff (1873-1934) was an early 20th-century pioneer of the technical approach to studying the asset markets. He is considered one of the five titans of technical analysis, next to Charles Dow, W.D. Gann, R.N. Elliott, and Arthur. A. Merrill.

Wyckoff was an avid student of the markets and an active reader and trader of duct tape. Wyckoff proposed a method to help understand the price movements of assets and the market as a whole: The Composite Man.

“… all the fluctuations in the market and all the different assets must be studied as if they were the result of one-person operations. Let’s call him the Composite Man, who in theory sits behind the scenes. and manipulates actions to your disadvantage if you don’t understand the game while playing it; to your great advantage if you understand it. “- Wyckoff

He advised traders to understand and play the market game, as the Composite Man was an actual entity playing him with a know-it-all formula. The composite man plans, execute, and carefully concludes his campaigns.

The Composite Man prompts the public to buy an asset in which he has already accumulated a considerable baseline by doing many transactions involving many assets and advertising their capital to create the appearance.

The Composite Operator has a lot of money and wants to enter the market. One way to do this is to move the market, which will help it penetrate.

Financial trading is a zero-sum game: As some people win, other people lose. If one entity controls the market, it has a strong incentive to move the market against the herd, so other people fail, making a profit.

It would help if you studied the charts to judge the behavior of the asset and the motives of the prominent traders who dominate it.

With study and practice, you can acquire the ability to interpret the patterns behind the action that a graphic depicts. Wyckoff and his associates believed that if you could understand the behavior of the composite human market, you could identify many business and investment opportunities early enough to take advantage of them.

Below are Wyckoff’s ideals:

  • Buy in Accumulation
  • Sell in Distribution

It’s pretty straightforward to put that in perspective and analyze which cycle most coins are in, just by looking at any old coin chart.

Wyckoff’s Five-step Approach

wyckoff price cycle

There are general procedures that the Wyckoff trading method implements. These are the five steps.

  1. Determine the trend and position of the market in which you are trading:
    The most important thing you can distinguish about an individual marketplace or topic is its movement and which way is going because the trend is the path of least resistance. The trend indicates the direction in which the price wants to move.

Profits are more likely to be made when established positions align with the direction the price has already indicated it wants to move.

Once a trend has been established, the future trend is likely to be the same as the current trend until the price reaches a position in that trend or exhibits price and volume action, indicating that you must anticipate a change in direction.

To keep it simple. Look at the charts and answer these questions. Is the market consolidating (indecisive) or trending? By analyzing the market structure, can you tell the direction likely to go soon?

2. Determine the relative strength or weakness of the asset you’re studying:
This method is straightforward but very important to achieve consistent crypto trading success. It’s always important to trade in line with the market.

In a bullish market, pick coins that are performing better than the market. For example, look for coins with higher percentage increases during rallies and smaller drops during reactions.

In a bearish market, do the opposite. If you are unsure about a specific coin, skip it and move on to the next one.

Traders who take positions consistent with the line of least resistance are more likely to get positive results than traders who try to fight the trend. It is always better if the market is working for you than against you.

Trading in line with the market means going long when the Wyckoff wave measures the market is in a defined uptrend channel and taking short positions when the market is in a defined downtrend channel.

When the defined trend is neutral or within a trading range, trading in line with the market may mean standing on the sidelines and letting the bulls and bears fight for control of the crypto or considering opportunities from both sides of the market.

3. Select the coins whose cause is likely to produce an acceptable effect: Determine how prepared you consider tackling its cause.

This method was intended to help you avoid marginal trades. Wyckoff teaches us to select only the coins that have built a cause. A cause can be defined in several ways.

In step three, Wyckoff uses a number chart to indicate how far a show’s price is likely to be from its current level. You can obtain this indication by counting on a graph of numbers.

To measure the number, you select the appropriate price level in the horizontal formation and count the number of horizontal divisions on the chart, starting on the right side and ending on the left side.

You count all horizontal splits, both those with post and those without it. The total number of horizontal divisions is the count. Indicates how far the price is likely to move from the level at which you made the count.

The key to successful crypto trading is to find coins that are accumulating or re-accumulating.

These are coins that have enough reasons for the investor to take long positions on them.

Therefore, before selecting coins, you must first assess whether they are exhibiting signs of worthiness. Only then should you decide whether to take long positions (buy) or not.

4. Determine the availability of cryptocurrency to move:
Here, Wyckoff tells us to determine the availability of inventory to proceed. Wyckoff identifies a potential spring position as price penetration of a previously defined support level.

For a potential spring position to be worth considering as an entry point to the long side, price spreads should be narrowing day by day as price approaches and penetrates the support level. Usually, this type of price action in combination with decreasing volumes results in the highest quality springs.

Suppose the price reacts to a spring position as it should with a rally. The answer, in the vast majority of cases, will be followed by a spring test.

Here’s a breakdown of what happens when a Wyckoff Spring takes place: A coin falls below its trading range and makes a new low sell frenzy, then “springs” back into its previous range, and usually occurs when there is a sell-off event.

5. Establishing a position:
The last step in the Wyckoff trading method is the one that results in establishing a position. Wyckoff tells us that we need to synchronize individual issue transactions with anticipated trends in the overall market.

While it is true that there are always individual issues that make substantial movements in the opposite direction of the general market, most move with the crypto market to some extent.

Identifying a point in general market action from which it is likely to change in the direction of an established trend or initiate the development of a new movement and take a stand on an individual issue at a time.

As a Wyckoff trader, you have a better chance of profiting from that spot and making a better profit than if the position is randomly established. Time passes from individual issues to projects anticipated in the market in which they’re traded.

Learning how to properly apply each of these five steps is what makes a trader or investor successful. Most of what the Wyckoff trading method teaches are the finer details of using these steps.

The Accumulation of Wyckoff

the accumulation of Wyckoff

Accumulation is the process of holding a particular asset over some time. The accumulation phase is a period of range and side limit that occurs after a prolonged downtrend.

The accumulation stage is where the more prominent players try to build positions and get rid of the smaller fish without causing a more considerable price drop or starting the new trend. Your goal is to maintain this phase until you fill all your positions, hence the name “accumulation.”

The sole purpose of accumulation is to maintain and improve trade timing. It helps in establishing a position in the market that makes it possible to profit.

According to Wyckoff, there are six different parts of the build-up phase, all with one important function.

Here are all phases available in the Wyckoff trading method.

(PS) – We have “Preliminary Support.”
The PS happens when a long-overdue bearish move and we start seeing signs of high volume and widening spreads. Also, here we see the first indication that the sale may end as soon as buyers start showing up.

(SC) – Known as the “Sales Climax.”
The SC is where PS breaks out, and the price begins to sell off violently. The sales climax refers to as the panic selling phase. At this point, costs can jump well above their norms, and spreads can reach extremes.

Often, the price will close far from the low, and a candlestick chart view will show a colossal wick.

(AR) – The Automatic Rally
The AR is where late sellers get punished. Once the price has sold off violently and the selling pressure is no longer dominant, buyers reverse the price with almost the same level of intensity as the selling peak but in the opposite direction.

The automatic rally is the result of short sellers’ hedging positions. The top of this point will often define the upper end of the range for subsequent consolidation.

(ST) – The Secondary Test
Here, the price revisits the bottom of the structure but in a much more controlled way. The sellers mustn’t increase the volume. It is prevalent to have many secondary tests.

Spring: With cryptocurrency, this pattern is quite usual with Altcoins, which have hit rock bottom for quite some time. The spring happens when a challenging test of the low occurs again to track participants into believing the trend is starting to fall again.

The spring is almost the equivalent of “swing failure pattern” behavior. You should note that this displacement is not always necessary. From there, the price should react by quickly regaining the previously lost structural level.

(LPS, BU, SOS): The Last Fulcrum, Save and Signal Strength.
The following behavior patterns should be evident changes in the price action of the previous activity at the start of the range. The last fulcrum is where the price begins to regain the microstructural pivot points that you previously established.

Often, the sign of strength can take place immediately after spring. Frequently, this will be a rapid, one-sided move, meaning buyers are in total control. The volume towards the end of the range should be high and result in significant cover.

What follows this range is known as the margin. At that point, the write is complete, and the market will often be left to continue the upward movement resulting in a prolonged positive response.

Ultimately, the purpose of this whole structure was to cause turmoil and confusion so that the more prominent players could source their supplies from the smaller ones.

One of the essential details of this activity is the observed volume. We want to see the following return to low volume at the beginning of the range following massive sales.

More importantly, after the spring and finally, we should see that the purchase volume significantly impacts the price movement through the SOS and profit margin.

Wyckoff was a firm believer in the idea that traders must understand the “Real Rules of the Game” of speculation.

Still, in a time where automated trading systems rule. How can we take advantage of these powerful tools and use a trading software like Gunbot to profit?

How to Implement the Wyckoff Trading Method in Gunbot

Wyckoff trading method and Gunbot

One of the critical things in investments is discipline. Without it, human nature will often work against you. For this reason, professional developers created crypto trading algorithms to help individuals like you become successful traders.

Gunbot is a community-made crypto trading bot that trades cryptocurrencies with great frequency. It uses a precise analytical approach to trading strategy development.

The key to trading with Gunbot lies in learning how to follow the small price swings and understand their volume relationship. This information helps you prepare for future price movements in either direction.

Successful Gunbot traders combine that basic understanding with the bot’s included strategies.

Then, they fine-tune these crypto trading methods to match their trading style. Gaining and reinforcing your trading knowledge is the best way to understand how the markets and their assets are performing and, more importantly, how you can expect they will act in the future.

So, how can you apply the Wyckoff trading method to Gunbot?

You can use Wyckoff’s method to analyze the coins you want to choose for trading. That extra knowledge will give you a head start, and you can use it as your “edge.”

Always select coins that are growing and ready to move with the market and ready to jump from fear into new or continued up trends. Ideally, you want to find those coins that are ready to lead the market upward so you can trade them.

Then you can trade those “well researched” coins with a Gunbot strategy like the “StepGrid,” which is an excellent choice for accumulation.

Other methods like Support and Resistance and risk management techniques like DCA, or even Reversal Trading, a Gunbot unique feature, can help you apply the Wyckoff trading method to your overall strategy.

You can switch your timeframes from scalping to longer-term swing positions if you want to boost risk to reward ratios. Many successful traders use this approach because it provides a means to anticipate the future market direction reliably.

You can also use the Wyckoff trading method with the Gunbot Bollinger Bands strategy. All you need to do is treat the lines in the Bollinger Bands as your guidelines, and instead of looking for new lows or new highs in terms of price, you look at their distance from the bands.

Regardless of your strategy choice, you will trade more efficiently and get faster results using the ultimate crypto trading bot!

Conclusion

I can agree if you say that the Wyckoff trading method is old. Still, it’s an excellent trading method that works because it is supported by a profound understanding of how we as human beings behave. All you have to do is apply the context to the crypto market.

The accumulation of Wyckoff is one of the most critical technical analysis methods. It would help if you did not understand altcoin trading as an automatic buying or selling point only. While most offer the opportunity to profit, some are likely to be more profitable than others.

The Wyckoff trading method is a set of tools traders and investors use to reduce risks and increase their chances of success. An extensive study offers a logical approach to decision-making rather than letting emotions lead the way.

One point to consider in determining which prominent trading positions are better than the others is the signals provided by the indicators in the charts. Those that indicate the highest potential are likely to provide the highest returns. You can do all this using the Wyckoff trading method.

Understand the Current Position of the Cryptocurrency Market.

The cryptocurrency market is about to make a big move. Are we in an uptrend? Is this an expected reaccumulation that sometimes happens in an ongoing uptrend? Have we reached the final stages of accumulation?

By judging these factors, we can determine what’s coming next.

Having even a basic understanding of this model and dynamics is invaluable knowledge that you can use to improve any trading system.

However, you must always be cautious of the risks, especially when dealing with cryptocurrency. Remember that investing in the crypto market is a long-term strategy, and patience is critical to see your return.

Successful Crypto Trading Relies on Consistency,” and your crypto bot will help you achieve it so if you don’t want to stay glued to the screen 24/7. Don’t Delay, and Get Gunbot Today.

Gunbot Ichimoku Strategy Ichimoku Cloud Basics

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gunbot ichimoku strategy

Gunbot Ichimoku Strategy Settings Ultimate Guide

Understand the Gunbot Ichimoku Strategy Settings by Learning How all the components of the Ichimoku Cloud Work and Discover How to Read this Indicator in the Trading Chart.

The Ichimoku Cloud is the technical indicator you need to know if you want to make smarter trading decisions. It can identify support and resistance levels, momentum, and trend direction by taking multiple averages. The Ichimoku Cloud also plots these figures on a chart, which gives you a “cloud” that analyzes your future trading predictions.

Ichimoku means “a glance” in Japanese. It is also called Ichimoku Kinko Hyo, which in Japanese means “balance at a glance.” Designed to identify support and resistance areas, trade direction, and entry and exit points.

With the Ichimoku chart, traders can identify higher probability trades even at a glance. It consists of 5 lines that form a “cloud.”

Ichimoku allows traders to understand the current state of the Crypto market. This analysis is also a trendy indicator of support and resistance points; this is the greatest strength of the Ichimoku study because it will allow you to quickly determine the subsequent market changes. Then, it will enable you to choose the following market changes rapidly.

Although it looks very complex in the charts, it is easy to understand. Still, it would be best to spend some time mastering it because it can help you predict future cryptocurrency prices, thus offering you a long-term perspective on the crypto market.

In this crypto trading article, I will be giving you a comprehensive guide on what Ichimoku cloud is, so you can apply this knowledge to your Gunbot Ichimoku Strategy once you set it in your trading bot.

Let’s start with the obvious question. What is the Ichimoku cloud?

Ichimoku Cloud Explained

ichimoku explained

Ichimoku is a graphics system developed by Goichi Hosoda before WWII, but it was not released to the public until 1968 after 20 years of backtesting with 10,000 students. It is one of the most widely used indicators in all financial markets today.

His big idea was to calculate the moving midpoints of equilibrium and use those calculations to project a future cloud that provides support and resistance levels. He added a confirmation line calculation as an extra, which could help by showing you the physiological probability of a trend continuation.

As said earlier, Ichimoku Kinko Hyo translates to “Balance Chart at a Glance,” which is a perfectly adequate description of how the indicator works. The Ichimoku Cloud is not so much an indicator as it is a collection of technical indicators.

It shows you a highly detailed picture of price sentiment, trend strength, support, and resistance. A holistic view allows the experienced trader to tell quickly whether a potential trade has a high or low probability of profits.

The Ichimoku Cloud is a charting technique that gives you an idea of where the price may go in the future. The cloud is a kind of “average” that helps determine where the price will go.

Ichimoku, which can look very complicated or overwhelming to new traders, quickly becomes comprehensible once you understand the various lines and what they mean.

How does Ichimoku Works?

If you look at the past and present trendlines, you can predict the future. Markets follow this logic because when something is trending, it’s so until it runs out of steam. It goes up until it doesn’t.

The gist of the matter is that things stay in motion, so you can use past and present trendlines to predict the future.

The Ichimoku is a highly effective system, reflected in the inherent simplicity of the signals it generates. Ichimoku cloud system is made up of five components, all of which I will explain below.

These five components combine to create a strategy that generates a variety of trends and signals.

Conversion Line – Tenkan-Sen

The Tenkan-Sen is the fastest of the three lines in the Ichimoku Cloud indicator and is used to track trades and identify trends. Watch the line closely because it follows the price, so if it is climbing, the price is likely to go up. If it is falling, expect the price to go down.

The conversion line is an essential indicator in the crypto markets. This line is calculated by adding the highest high and the highest low over the past nine periods. The result of this formula is a key support line, which can signal when buyers are oversold or when sellers are overbought.

Tenkan sen is a turn line calculated by the average value of the previous nine periods. The median value is the average between the highest and lowest points of the last nine periods.

The midrange average value is not a moving average. There is a big difference between the two. The significant contrast here is uniformity. The midrange average value does not appear uniform like a moving average.

Hosoda believed that using extreme prices over time is a better measure of equilibrium than closing prices alone. Nevertheless, the Tenkan-Sen, or “price pulse,” is not typically used on its own but rather in tandem with the other elements of the Ichimoku Cloud.

Baseline – Kijun-Sen

The baseline is known as Kijun-sen. The baseline is calculated by taking the high and low points of the last 26 periods, then dividing them by two. Due to its extended period, Kijun Sen is a more reliable indicator of short-term price sentiment, market sentiment, and balance.

It’s an essential tool because it can confirm a trend change, act as a trailing stop-loss point, and you can use to set support and resistance levels.

When the Tenkan-sen and the Kijun-sen (9-period and 26-period conversion lines, respectively) cross, this is a trade signal.

When the price is higher than the Kijun Line, the short- to medium-term trend is up. When the price is lower than the Kijun Line, the short- to medium-term trend is down.

If the Tenkan-sen and Kijun-sen are tangled up or crossing back and forth, it means that the price movement lacks an overall direction or is erratic, so it’s hard to tell whether the price is going up or down. Therefore you can’t rely on crossover signals in these market situations.

Leading Span A (Senkou Span A)

Senkou span is the main stage or the main stage A. You can calculate it by considering the average of the turn line value and the baseline mentioned above (Tenkan-Sen and Kijun-Sen).

It is calculated as (Tenkan Line + Kijun Line)/2 traces 26 periods ahead. Senkou Span A and Senkou Span B form the Ichimoku cloud. The time lag is a unique feature of Ichimoku and indicates where resistance and support may be in the future.

The two lines that makeup Senkou (Leading) Span A and Senkou (Leading) Span B form a cloud. The section between the two lines is colored or shaded. These lines can act as either support or resistance for the price.

When the price is above the lines, it acts as support, and when the price is below the lines, it acts as resistance. Leading (Senkou) Span A uses historical data to predict where you will expect support or resistance in the future.

If the Senkou (Leading) Span A line is at the top of the cloud, it is a bullish signal since the shorter-term price has crossed above the longer-term price point.

While it may look similar to the SMA, the Senko Span A formula is very different from the Simple Moving Average. Its calculations are divided by two to create a mid-point, not an “average” like the SMA.

Leading Span (Senkou Span B)

Senkou span B is the leader of the cloud range B. You should consider the average value of the previous 52 days and plot this value as the value of the next 26 days.

It is calculated as (higher lower + lower)/2 over the last 52 periods and plotted 26 periods ahead. This line with Senkou Span B forms the Ichimoku cloud and represents long-term equilibrium.

If the Senkou (Leading) Span B line is at the top of the cloud, it is a bearish signal since the shorter-term price has crossed below the longer-term price point.

When the Senkou Span A crosses the Senkou Span B, it may indicate a trend change. For example, when the Leading Span A crosses above the Leading Span B, it may signal that an uptrend is coming. If Span A crosses below Span B, it may signal that a downtrend is coming or there is a price correction.

Lagging Span – (Chinkou Span)

Chinkou Span is the delay line, the closing value of the coin from 26 days ago. It shows how the current price action compared to the price action 26 periods ago.

The underlying belief here is that if the current closing price is lower than the closing price 26 periods ago, there is the possibility of a further downward price movement and vice versa.

Using the Chikou Span, one of the most important things to look for is whether the current price is above or below it. If the current price is above the Chikou Span, this indicates a weakness in the price. If the price is under the Chikou Span, this is usually an indication that the price moves upward and has strength.

Also, Chikou Span does not take into account the average value. It is instead 26 periods to the left of the most recent price.

ichimoku cloud components The Cloud (Kumo)

The cloud is an essential component of the Ichimoku chart. It is the portion between Span A and Span B. When the price hits this Kumo, you can find trading opportunities. It is the essential trigger in Ichimoku analysis to enter or exit a trade.

Kumo is between Senkou Span A and Senkou Span B and is a vital part of the Ichimoku Kinko Hyo. It represents critical support and resistance levels, but the Kumo shows a multidimensional picture compared to traditional support and resistance lines.

The thickness of the Kumo indicates the strength of the support or resistance; the thicker the cloud, the stronger the support/resistance. Additionally, given how the Kumo is drawn forward, it predicts support and resistance levels; this is incredibly powerful, as most indicators lag and react to price.

For example, if the price quickly crossed a thick Kumo, it would indicate that the movement was powerful. The area in the center of the cloud is called the equilibrium area, and the price in this area is unpredictable, and the experienced Ichimoku trader will not place trades in these areas.

What is unique about the Cloud (Kumo)?

The Kumo has its built-in sentiment that you can use in conjunction with the price sentiment. Note in the table above that the Kumo changes color after being pinched.

When Senkou Span A is above Senkou Span B, the Kumo is said to be bullish. On the other hand, the Kumo is bearish when Senkou Span B is above Senkou Span A.

Again, because the Kumo is forecast in the future, it can give you an early warning of a change in price sentiment. Try to get this from a few moving averages!

The Kumo can also have flat tops and bottoms, and these are important structures. They exert an almost gravitational pull on prices. You will notice that when the cost comes out of the Kumo, and there is a flat top or bottom, that price often comes back to the Flat Kumo.

With experience, you will get to know them and make sure you do not enter a false trade if broken by ensuring that the price has been released from the gravitational pull of the Kumo.

Ichimoku Settings

As the cryptocurrency market never closes, this particular setting (10, 30, 60, 30) double it (20, 60, 120, 30) has proven to be the best.

Doubling your Ichimoku cloud settings prevents a lot of inaccuracy in our trading strategy. The cloud is designed to capture a more significant portion of price movements (i.e., 80/20 rule). The original setup was based on convectional markets, which did not operate on weekends or at night.

However, people still get a result from this, as lowering your Ichimoku setting can be helpful as they detect trend reversals quicker. With this, you get (9, 26, and 52).

Analyzing the Chart

Having done all these explanations, how do you apply Ichimoku Kinko Hyo into your trading? Below is a whole discussion about this and demonstrations that constitute trading signals of different strengths.

Ichimoku Trading Signals

Momentum Signals: Tenkan-Sen Cross Kijun-Sen

The cross is basically when the conversion line, Tenkan Sen, crosses paths with the baseline Kijun Sen. If the conversion line crosses above the baseline. It is a bullish signal, and if it passes below the baseline, it is a bearish signal.

Fortunately, the Ichimoku gives us more information to help us refine these signals. If a bullish cross occurs above the cloud (Kumo), this is a strong bullish signal.

If the bullish cross occurs below the cloud (Kumo), this is a weak bullish signal. Finally, if the bullish cross occurs within the Kumo, then a neutral bullish signal is seen. The reverse is true for bearish crosses. A solid bearish cross would be the conversion line under the baseline under the cloud (Kumo) and so on.

Trend-following Signals

Here, the trend gets detected by the color of the cloud. When the paint is green, the trend is positive. When the movement is red, the trend is negative.

In other words, a bullish market happens when the color changes from red to green, and a bearish occurs when the color changes from green to red.

Support and Resistance

When determining your support and resistance levels, all you need to do is look at the candle. If today’s candle is right above the cloud, you can bet the price trend is up. The first level of cloud support will be at the top, and the second level will be at the bottom.

If you wait until the end of the day, you will be able to see the closing price under the cloud. You can then reverse the trend determination.

It’s a different story with candles under the cloud. There is a lot of market information that you could get with the Ichimoku strategy, even if you are focusing on cloud functions.

Signal Strength

The general rule of thumb is that if the Lagging (Chikou) Span is above the price action when a bullish cross occurs, it adds more strength to the strength of the signal.

The reverse is true for bearish signals; the Lagging (Chikou) Span below the price action adds more strength to the positive outcome of a short trade.

Therefore, a compelling trading strategy is to wait for a bullish or bearish Tenkan/Kijun cross with confirmation from Chikou Span. This requires patience, but it is a very reliable signal.

Cloud (Kumo) Breakout

This signal is where the price moves away from the Kumo, either above or below. A long trade is indicated when the price exceeds the Kumo, and short trade will be shown when the price crosses below the Kumo.

You can also use the Chinkou Span as in the Tenkan/Kijun cross described above.

It would be best to use the built-in Kumo sentiment to confirm a long or short trade. Finally, by paying attention to the dangers of Flat Top or Flat Bottom Kumos, the signal strength may be further increased or dismissed as too risky.

Using the Ichimoku Strategy

Using the Ichimoku strategy, you can earn a lot just by watching the Kumo or the cloud.

Either way, you can interpret the Ichimoku chart data by component or as a whole, and you will have a clear idea of what the crypto market is like at any given time.

Focusing on the cloud is the chart training done by Senkou span A and Senkou span B. When you analyze the shadow relative to its thickness, you will find some market characteristics.

When cloud thickness is the foundation of your Ichimoku strategy, you aim for prices that will or will not support a substance breakout. For a thicker cloud, this means the cost is less likely to be managed with a sustained lead.

When the cloud is thinner, the cloud breakthrough will have more chance. It doesn’t matter which stretch is at the top. It can be span A or span B, but the benchmark for you will be the thickness.

Ichimoku Advantages and Disadvantages

Ichimoku cloud Pros

  • Flexibility: As discussed above, Ichimoku can be used with many trading indicators like Moving average, MACD, Support, and resistance. Intensive approaches to this will strengthen the accuracy of your trade.
  • Automation: In addition to its flexibility, Ichimoku can be automated with Gunbot. And it is no rocket science, so easy to use, plus it comes included in the Standard, Pro, and the Ultimate bot Licenses.
  • Versatility: As stated earlier, Ichimoku is versatile in price direction, trend lines, support and resistance levels, and a comprehensive approach to price action.

Ichimoku cloud Cons

  • Trading mistakes may occur for beginners, as it may seem a bit technical when reading charts, trends, and price action.
  • Due to lots of trend lines, it may get a bit disrupting for beginners.

    However, getting familiarized with trading indicators can quickly fix this. Also, trying out several strategies stated above can get you started with the principles of the trading indicators.

At this point, you should have a good understanding of the Ichimoku cloud, so it’s time to set up your Gunbot Ichimoku strategy. Read on!

Gunbot Ichimoku Strategy

You can trade with Gunbot by using it to signal when a candle crosses one of the three lines that make up the Ichimoku indicator. Set it up to execute BUY and SELL orders when these candles cross, depending on which line you want to use.

All you have to do is specify in your Gunbot Ichimoku strategy settings which line (Tenkan-Sen, Kijun-Sen, or Kumo) you want the bot to use.

The buy orders are posted when the current candle moves entirely under Kumo, Tenkan-Sen, or Kijun-Sen. This setting depends on your choice of which line you want the bot to use for buying orders.

The sell orders are posted when the current candle moves entirely over Kumo, Tenkan-Sen, or Kijun-Sen. This setting depends on your choice of which line you want the bot to use for selling orders.

The Gunbot Ichimoku strategy settings apply to all pairs running this strategy. If you want a different set for one or more coins, do so by editing the specific pair override in the GUI or your config.js file.

I recommend using Ichimoku for both (buy and sell methods) to keep it simple, but you can mix it and use any other strategy or confirming indicator if you like.

Gunbot Ichimoku Strategy Settings

Your first step is creating a new strategy (give it a name) using the pre-set BUY_METHOD and SELL_METHOD named Ichimoku. You can do this in the GUI or your Gunbot config.js file.

Gunbot Ichimoku BUY and SELL Settings

gunbot ichimoku strategy buy and sell settings

The main parameters here are “BUY_ENABLED”/”SELL_ENABLED”: true, and “BUY_METHOD”/”SELL_METHOD”: ichimoku. Other values like Take-Buy, Take-Profit or similar are your choice.

DOUBLE_CHECK_GAIN“: true, is also highly recommended.

Gunbot Ichimoku Strategy Indicator Settings

gunbot ichimoku strategy indicator settings

These are the most important settings that will affect your Gunbot Ichimoku strategy performance.

TENKAN_PERIOD“: 9, this is the default number of candlestick periods used to calculate Tenkan-sen. This parameter is named conversion line in Tradingview.

KIJUN_PERIOD“: 26, this is the default number of candlestick periods used to calculate Kijun-sen. This parameter is named baseline in Tradingview.

SENKOUSPAN_PERIOD“: 52, this is the default number of candlestick periods used to calculate Senkou span. This parameter is named Lead in Tradingview.

DISPLACEMENT“: 26, this is the default number of candlestick periods used for displacing Kumo and Chikou-span.

ICHIMOKU_PROTECTION“: true, set this to true to prevent the bot from closing your position if the current candle touches Kumo in the opposite direction of your trade.

KUMO_SENTIMENTS“: true, if you set this to false, it will ignore Kumo when you’re trading with the Gunbot Ichimoku strategy.

After that, you can choose Kumo, Tenkan, or Kijun to buy and sell, make sure you use only one, do not activate multiple BUY or SELL triggers.

Also, remember the argument between the traditional Ichimoku cloud settings (9, 26, 52, 26) and the settings for crypto 24/7 open markets (20, 60, 120, 30) when you set your numbers.

So, the answer to the question. Should you use different settings for Ichimoku Cloud on cryptocurrency markets, it is totally up to you.

Lastly, don’t forget to read about the other Gunbot strategy settings if you need help with the other global parameters while using the Gunbot Ichimoku strategy.

Conclusion

The importance of Ichimoku technical analysis in trading cannot be overstated. The multiple data points represented by the five lines give the trader a more complete and in-depth view of the particular price action.

However, the real value of Ichimoku lies in its highly graphical visual display, which helps the trader to immediately discern and filter out low probability trades from those with the highest probability of success at a glance.

Ichimoku is an exciting way of learning and creating buy/sell signals of any coin of your interest. This article has given you a lot of insightful information about this trading strategy.

To be on the safe side, I would like to give you one last explanation of the Ichimoku cloud, this time in a screenshot provided by GuntharDeNiro on one of his famous “Gunbot the Way I run it” articles.

Here’s Gunthar’s Ichimoku Explanation:

gunthar ichimoku explanation

A pretty simple yet concise way to explain the Ichimoku cloud. 🙂

I hope this article helps you broaden your crypto trading skills, but don’t use it as trading advice, keep learning and never trade with money you cannot afford to lose!

Automate your crypto trading now and profit with the Gunbot Ichimoku strategy today.

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