For years we have been living revolution after revolution. So many, that the programmer barely has time to keep up, the paradigm changes happening almost faster than the changes of prime ministers. All have ramifications also in automatic trading. The companies that are active in the financial field are obviously early adopters because for them speed and information mean opportunities and money. As a result of technological development, these companies are in a continuous race, and some of the engines are specialized software development and those behind this development. At the same time, there is an increase in the accessibility of this area. Trading becomes much easier with the explosion of cryptocurrencies. With immediateedge you can come up with the required steps.
What Is For Sure
- We can say that software developers are in a somewhat privileged position, making it very easy for them to become participants on these scholarships and enter the competition for resources, already has much of the necessary knowledge. This remark is not intended to be an investment tip, but merely an observation that programmers are well-positioned to enter this competition, and the challenges and opportunities to learn are multiple.
- It is obvious that the exchanges on which cryptocurrencies are traded are very volatile and speculative, that a bubble which may not be the only one has already passed, but that is why, as long as the volumes do not become derisory, the automatic trading becomes more interesting than very optimistic HODL strategies. Those who are willing to take the risk of losing everything they invest in exchange for the promise of earnings can do so by betting on their own ability to make predictions about price movements or by exploiting the functioning of these exchanges. These skills are within the reach of software developers.
The Topics At Hand
The topic of automatic trading and price evolution is very complex and impossible to condense in a few pages. This article aims to give a brief presentation of some techniques used in the field: we will describe some types of speculative algorithms and mention terms that can be used as a starting point for a more detailed investigation of the signals used for prediction on their own.
Types of automatic trading
There are several trading modes, each with its advantages and disadvantages, involving different degrees of risk. One of the ways of automatic trading with minimum risk is to build an arbitrage algorithm between exchanges. In their simplest form, these algorithms simultaneously track multiple exchanges for a particular pair of currencies, for example, ADA and ETH and simultaneously perform the buy and sell operation. Thus, following the prices of any two exchanges such as Binance and Bittrex, when the discrepancy is large enough that there is an opportunity for a profit, an algorithm can buy ADA with ETH on Binance, simultaneously with the sale of ADA for ETH on Bittrex, cashing the difference.
This difference must be large enough to cover the trading costs, the costs of feeding the account, as well as the risk of keeping blocked amounts in these cryptocurrencies because the selling operation cannot be performed on most of the traded pairs without them, hold prior. Life cannot be simple, it must also cover the risk of not obtaining the theoretical price from the moment of observation due to the movements that can take place before the actions of the algorithm reach the market or to have errors in communication with an exchange.