Top Automated Trading Strategies For 2020 and Beyond

AAX is now available on major automated trading platform Quadency. This integration allows you to maximize how you leverage the AAX platform.

Trading bots are preferred by many because of their capabilities. Beyond making trades happen in the fastest way, these bots also allow traders to spend less time trading while taking advantage of opportunities at all times. 

Despite being a more simple method of trading, using bots also come with a learning curve. Traders need to research and understand how these bots operate since they act based on your command and settings.

In a situation where you don’t set them well, these bots could bring undesirable results. The key to using trading bots properly are automated trading strategies.

Automated Trading Strategies – How do they work?

Automated trading strategies are a set of commands that use various trading methods to perform trades on your behalf. Some are very simple, like buying a particular amount of crypto at stipulated times. Also, some are very complicated. For instance, using various indicators to determine whether to sell or not.

A trader can create bot strategies or they can use already built strategies by platforms like Quadency. These strategies help traders make trades purely based on the technicalities, removing human elements like emotions that may affect traders negatively.

What’s more, it makes it easier for traders to repeat tasks consistently without worrying about movements during sleep or periods when unavailable. 

Here are the top 5 common automated trading strategies to consider in 2020 and beyond:

Bollinger Bands

Bollinger bands are used to find more profitable trading opportunities through price action prediction. The algorithm opens a sell order when the price is above the upper band and a buy order when the price is below the lower band.

MACD

The strategy is built around the MACD indicator. It is mostly used to find short-term and long-term price moves. A buy is made when the MACD line crosses above the signal line, while a sell is made when the MACD line crosses beneath the signal line.

This is a MACD indicator based trading strategy. A buy signal occurs when the MACD line crosses above the signal line, and sell signal when MACD line crosses below the signal line.

Grid Trader

Grid trading is a popular trading strategy that takes advantage of the volatile nature of crypto markets. Bots automate this strategy to place several buy and sell orders on grid lines depending on the price.

When the price increases or decreases within the range of the grid, the orders that fill are replaced with more orders to make more profit.

Portfolio Rebalancer

Portfolio rebalancer is a popular automated trading strategy in traditional finance. This strategy is used to reduce investment risk when trading, especially in volatile markets.

For instance, you can take altcoins that are rising in price and use the hourly rebalance feature to reinvest profits into more stable cryptocurrencies.

Mean Reversion

This strategy buys an asset at a price that is beneath the “oversold” RSI level. When the price goes beyond the ‘overbought” RSI level, the bot then sells the asset.

One thing to note is that using an automated trading strategy is also risky. Profits are not guaranteed, and users will have to optimize strategies to get the best results.

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