One of the most popular ways to cryptocurrency trading is by using automation. Contemporary trading bots are quite efficient at every single technical aspect of an automated trading system, but they still can’t predict what will happen in the market. A retail trader running bots must come up with a way to trigger trading algorithms.
You can use various analytical tools available at TradingView and create sophisticated systems to produce trading signals for your bots. It is possible to fully automate TradingView scripts and make them highly efficient. WunderTrading has a wide range of features to create bots that will execute complex algorithms upon receiving a signal from a technical analysis strategy deployed on the TradingView platform.
What is a TradingView script?
The continuous improvement of the technology in the blockchain industry led to the inevitable creation of centralized exchanges where millions of retail traders could interact with the market. The sudden influx of individual investors in the 2010s caused many experienced traders to reevaluate their approaches to opening market positions in a highly volatile environment.
People using risky strategies like scalping had to compete against thousands of retail traders who were placing orders at the same time as scalpers. Beating the competition to the market and opening market positions at most favorable moments became imperative for the long term success. Since humans have to interact with the exchange via the UI, bots quickly emerged as the best and most efficient way to trade. They became especially useful to retail traders relying on technical analysis.
Technical analysis is the only way to meaningfully explore various market situations in the crypto sector. There are barely any opportunities for fundamental analysis as DeFi projects and many blockchain companies simply do not have any real investments or something tangible to offer. The price of the vast majority of tokens is purely speculative. It means that the only valid approach to analyzing the market is by applying techniques from the domain of technical analysis.
TradingView emerged as the most popular destination for all analysts, retail traders, and crypto enthusiasts in the beginning of the 2010s. This terminal offers a wide range of different analytical tools while allowing its users to use any source of data. The developers of the platform also created a unique scripting language “Pine Script”. The “Pine Editor” can be accessed in the lower panel of the interface at any moment.
The “Pine Script” is used to fine-tune various technical indicators and graphical instruments deployed on the price chart and create signals (alerts). Signals can be used by users to trigger their automated trading systems on specialized platforms or on local machines. WunderTrading is an excellent choice for all retail traders. It offers a rich selection of additional analytical tools, advanced automation features, and even AI-driven trading systems.
How to receive signals from TradingView on WunderTrading?
Any automated trading system consists of three main components:
- A signal provider. It can be a highly specialized company that delivers signals for a fee or your personal analytical strategy deployed on TradingView.
- An algorithm executor. Any bot running on WunderTrading or a similar service can receive a signal, connect to an exchange, and place an order.
- A centralized exchange. You will need to have an active account at a centralized crypto exchange that you like to trade on.
The third component is quite straightforward. When you first log in your personal account at WunderTrading, you will be prompted by the system to connect an existing CEX account (for spot or marginal trading). An API key used to set up this connection can be found in the account page on the CEX website.
Establishing a connection between a single provider and bots can be tricky. You will find a detailed instruction on how to start receiving signals from TradingView on the WunderTrading website. We will cover the process in general terms. You will need paid accounts on both platforms for the best and smoothest experience.
Here are the steps you need to do:
- Go to the dashboard of the WunderTrading platform and choose “Signal Bot”.
- Pick “TradingView Bot” and create a new bot template.
- In the new window, look at the right side of the screen and find strings of code that must be inserted in the Pine Editor.
- Copy and paste these lines in the Pine Editor as instructed by the tutorial on the WunderTrading platform.
- Set up a new alert system on TradingView using our technical analysis strategy.
- Launch the bot on the WunderTrading website and start receiving signals directly from the TradingView terminal.
The WunderTrading platform allows its users to run a wide range of different automated trading systems including DCA and GRID bots that can be triggered by signals from your trading strategy on TradingView.
Optimizing your trading system
Note that even the best TradingView scripts can underperform if you do not invest time and effort into calibrating your trading system.
Here are some tools and approaches you can use to make bots even better:
- Make sure to test any strategy multiple times. Use the “Strategy Tester” on TradingView to assess the potential W/L ratio and evaluate risks before you commit to a strategy. Additionally, use the back-testing capabilities of the WunderTrading platform to further evaluate the potential profitability.
- Always use stop-losses and take-profits. Delayed orders help you aim at specific profitability goals and reach them consistently instead of missing out on valuable opportunities or closing a market position at a loss. On the other hand, a strategically placed stop-loss can prevent you from a margin call or losing too much on a failing market position.
- Continuously make improvements to the trading system. Even if you feel that your ATS delivers good results, it is a good idea to regularly adjust settings for delayed orders and test other investment ideas. As the crypto market changes, so do the conditions for traders. It means that something that works wonderfully right now may be irrelevant in a couple of months.
Choose the right trading strategies
While trading bots can work well in any circumstances, they ultimately depend on the quality of your analytical system deployed on TradingView. If it produces too many false positives, no amount of tweaking and tinkering will make your bots profitable. On the other hand, even poorly optimized bots will deliver good results with a technical analysis strategy that consistently produces true positives.
It is hugely important to focus on choosing the right analytical method to power your automated trading systems. If you find something that can be elevated to the next level by a good automation provider such as WunderTrading, it can be turned into a sustainable source of passive income.