What are BitMEX AI Trading Bot Strategies
Cryptocurrency is money-making, and there are several ways to make money through cryptocurrency. Some people are interested in holding cryptocurrency. These people are interested in studying the fundamentals of cryptocurrency projects and then buying and maintaining cryptocurrencies. Holding cryptocurrency for these people in the short term may also be a loss, and the amount of profit is determined only in the long period. However, some people looking for short-term gains are buying and selling short-term, called trading. Trading is not always profitable, and you have to consider different aspects to make a profit. One of the activities that traders perform to increase their speed and accuracy in trading is using bot trading. But sometimes, this bot is not enough because market conditions are changing.
The main difference between profitable trades and other trades is strategy. Every successful trader in the market must follow a specific strategy and adhere to this strategy. Do you know what a trading strategy is?
What is a trading strategy?
When we talk about strategy, we mean choosing methods that directly impact how you execute your trade. For example, some people are interested in trading with news and buying crypto whenever a crypto asset news is broadcasted. The strategy is common and can often be dangerous.
But you may be wondering what strategies the BitMEX AI trading bot is supposed to use. Since computer engineers write bot trading codes, its approach to trading is also scientific and derives from the science of technical analysis. Strategies derived from the science of technical analysis have the slightest error and are the most reliable type of strategy for BitMEX or Binance bot trading.
What Bot Trading does is execute predefined strategies automatically and quickly. This bot uses various indicators and oscillators to predict the price. These strategies are suitable for different situations, and the amount of profits varies in different periods.
There is no such thing as the best possible strategy. The efficiency of a strategy is determined by various factors such as market conditions and timeframes, and bot fluctuations. The best artificial intelligence bot usually allows you to use multiple strategies. However, this is not the main difference between bots. Artificial intelligence trading bot uses the best practice of AI to discern which strategy is profitable in the current market conditions without the need for humans. This AI-based tool measures the benefits and disadvantages of each strategy without the need for you and decides which strategy will have a minor loss in choosing from now on. Now let's look at the different strategies that a BitMEX AI trading bot can implement.
What strategy should I use by my BitMEX trading bots?
Here are some of the essential strategies that an AI trading robot can execute.
Naïve Bayes
This strategy can only be implemented by artificial intelligence trading bots like BitMEX AI trading bot. In this strategy, the Trading bot uses Naïve Bayes to determine the best time to enter and exit based on its information. Bats that do not use artificial intelligence make many errors when detecting entry and exit times.
Mean Reversion
Many phenomena in the world have the property of meaning reversion; that is, if we look at their behavior over time, we see that when they move away from the average, they tend to return to the average. This concept is widely used in the asset market. When the price of assets that behave in this way in the market becomes too high or too low, the probability of returning to the previous average prices increases.
For example, if the price of crypto is $ 1 and the price goes up, most people will probably sell it, and this will cause the price to drop to $ 1. The reverse is also true. If the price of this crypto goes down, many people will probably think that this crypto will be profitable in the future and will start buying it. This action pushes the price higher to $ 1 as the crypto owners realize their assets are valuable and try to sell them at a higher price.
Natural Language Processing (NLP)
the type of strategy is only available in certain types of bots equipped with artificial intelligence. This strategy uses natural language processing to use data available on the Internet to detect a crypto trend. This strategy is very complex and must be combined with other strategies to get the best results, but its impact on the profitability of the trade is enormous. For example, the bot can process information from various sites to detect that a cryptocurrency has partnered with a big company in this strategy. Therefore, the price will probably go up. Once this issue is detected, the bot can use technical indicators to see possible price increases.
Momentum Trading
Momentum is a momentary and moving index and is one of the tools of technical analysis in the capital market that uses the obtained data to measure the movement speed of rising or falling crypto prices.
The momentum indicator is used to determine the speed of the uptrend or downtrend of the stock price.
Calculating the momentum seems very simple. It is enough to subtract the day's final price minus the price of n days before. Usually, the number n is set to 14 by default. In this strategy, the artificial intelligence trading bot must correctly identify the time of buying and selling.
Conclusion
BitMEX bot trading is one of the valuable tools for people who do not have enough knowledge to trade or do not have enough time to perform trading processes manually. This tool puts you in front of different options to make money in different ways. Every strategy is suitable for a specific time and situation, and choosing a better strategy can be more profitable for you. So it's best to know the different strategies well and start working with BitMEX AI trading bot.