Once reserved for insiders, trading bots are gradually making their nests in a crypto market where volatility reigns supreme. Several studies confirm their growing use, and show that they outperform human trading.
This promotional article was written in collaboration with NapoleonX.
From the professional to the individual
When taking a position in a digital asset, two methods are regularly used by investment funds investing in cryptomoney: the qualitative and quantitative approach.
The latter, based on technical analysis, combines indicators such as the volatility of an asset and its past performance. Qualitative analysis is based on the project team, competitive advantages and other subjective information.
Investor trader trading
While a recently published study indicated that 48% of cryptos investment funds relied exclusively on the quantitative approach to take their positions. They do not use humans to generate trading operations. They make way for bots, ensuring greater flexibility and optimised decision-making.
While investment funds program their robots according to the profile of the clients they serve, individuals can now enjoy the same services. Napbots offers a wide range of trading techniques, automated by bots, that will adapt to your risk aversion.
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There are currently 7 trading pairs available on Napbots. Scattered within a catalogue of predefined strategies, traders will be able to automate their operations via Binance, Kraken or Bitmex (8 trading platforms in total).
In December 2019, a study had fully validated the choice of using trading bots. Indeed, after analysing more than 76,000 research reports, comparing trading performance between humans and robots over a 15-year period. The latter had obtained results that were 5% higher than their human counterparts.
There are several techniques commonly used to operate a trading robot:
„Crypto Scalping“: unlike human trading, which is limited to managing an entry and exit position, bots will execute a multitude of trades in a short period of time.
„Crypto Trend Following“ . Largely used by CTA funds, this strategy consists of establishing a position based on the upward or downward trends of a market.
This is the case of the NapoX BTC Funding AR, a strategy present on Napbots, which has generated an annual return of 572%. Optimised for BTC trading, with a „by the hour“ time trading profile, this technique enables the investor to take advantage of a volatile trading environment. Its resilience is impressive, with a „Max Drawdown“ of -19%.
Because yes, the interest of a Trading bot is indeed there. It makes it possible to control a highly volatile market, often in contradiction with human emotions. The trading frequency with which Napbots operates makes it possible to safeguard one’s capital in the event of a sudden drop, and to regularly generate small profits as the day progresses, in order to reach a positive balance.
While Bitcoin has just hit the $16,000 mark, the end of 2020 and the year 2021 promise to be exciting. Many traders will try to profit awkwardly from price swings, while Napbots users will be able to maximize their chances of taming volatility by relying on automated strategies that have
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