How To Earn Bitcoin While You Sleep: The Art Of Trade Automation With Trading Bots
Bitcoin, the pioneer of cryptocurrencies, has captured the imagination of investors worldwide. With its immense potential for growth and volatility, it has become a coveted asset for those looking to grow their wealth via a variety of means ranging from simply HODL-ing to actively trading the asset. As it does not run on a proof-of-stake mechanism, Bitcoin cannot be simply staked to generate a consistent stream of passive income; nonetheless, the emergence of automated trading bots may be able to offer an enticing alternative to circumvent this shortcoming for the faithful HODL-er looking to hold Bitcoin in the long run.
Case Study: A Grid Trading Bot Running On Binance, 6 Months Down The Road
This BTC/TUSD grid trading bot on Binance was started on 21/4/2023 when Bitcoin was trading around $28,000. Priced at $27,600 6 months down the road, we are currently near our initial starting point, but not without having treaded significant market fluctuations through a trough of $24,800 and a peak of $31,800 during this period of 6 months. The price fluctuation during this period of time has presented an opportunity for the trading bot to seamlessly buy low and sell high, generating effortless passive income in the form of grid profits.
Why BTC/TUSD? This trading pair incurs zero trading fees on Binance, so that maximum profits can be reaped.
As can be seen from the example above, from an initial investment of $298, the bot has automatically captured $41 in profits from grid trading (buying low and selling high at grids within a predefined price range), negating the slight loss in value of the cryptocurrency asset (manifested as a negative floating profit of -$3.5 which resulted from the price of Bitcoin dipping from $28,000 at the point of bot creation to the current levels of $27,600), such that the net profit is now $38, which in turn gives an APY of 27%! Do note however that the calculation of this APY greatly depends on the total profit of the bot, which fluctuates from time to time depending on the price of the prevailing asset (which affects the floating profit of the bot).
Configuring The Bot Properly
Any trading bot is only as good as its configuration, which is predetermined by the user at the time of bot setup. A knowledge of support and resistance levels is helpful to determine the price range within which the grid trading bot should operate. In this example of a BTC/TUSD grid trading bot, the operational range was set to $26,000 to $31,000 — which turned out to be a fairly good price range within which most of Bitcoin’s price action occurred for the past 6 months.
Trading Bots: The Future Of Trade Automation
There is a plethora of trading bots available on the market, ranging from those incorporated within cryptocurrency exchanges such as Binance, Kucoin, Huobi; to those found on specialized trading platforms such as 3Commas and Pionex.
A noteworthy contender is Bitget, which is a leading cryptocurrency derivatives exchange offering a wide range of trading services for both beginners and experienced traders. Bitget also has an attractive offering of grid and martingale trading bots which can be availed for free.
It is interesting to note that despite being a free feature, Bitget’s trading bots offer relatively sophisticated features normally only found in paid bots, such as trade automation based on trading signals (such as MACD and Bollinger Bands). If you are daunted by the need for complex configuration of the trading bot, you may even avail the copy trading feature to mirror the trades of professional traders effortlessly!
Final Thoughts
Trade automation has never been easier, what with the advent of AI. It is indeed possible to earn money as you sleep, provided you avail the right tools to do so! A trading bot is just one of many such opportunities, where the sky is the limit!
To learn more about my passive income avenues, feel free to check out my previous articles below.
Happy earning!
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