Roboadvisory and automated trading in the realm of crypto

Robots have taken crypto markets by storm, with thousands and thousands of algorithms trying to break the market and make money. This abundance of robo-advisors also makes it tricky to find reliable ones. Automated trading in crypto using algorithms and artificial intelligence has become super popular with the development of advanced and capable AI models. Let’s overview this fascinating industry and define a few reliable crypto robo-advisors that can amplify returns. 

The Evolution of Crypto Trading 

Crypto was born after 2008 and the landscape of cryptocurrency trading has since undergone remarkable changes. Initially, it was primarily manual trading, consisting of a few enthusiasts and tech-savvy investors navigating the uncharted territories of cryptocurrencies. Over the years, the digital currencies market expanded, giving rise to plenty of altcoins and a burgeoning ecosystem of exchanges and trading platforms.

This evolution was marked by the integration of sophisticated technologies, aiming to enhance the trading experience and maximize returns. The development of automated trading systems and robo-advisors marked a significant milestone in the blockchain industry. Automated trading systems and robo-advisors revolutionized the crypto industry and changed the way trades were executed in the crypto space. These technologies leverage algorithms and even artificial intelligence to automate trading decisions based on predefined criteria, market analysis, and predictive machine learning models. 

Since the rise of AI and the crypto industry almost coincided, many developers started coding AI trading robots for exclusively crypto space, quickly overwhelming the market. It is therefore essential to select a reliable crypto signals provider and ensure highly accurate information. 

Roboadvisory in Crypto Explained

Technological advancements in the digital currency space have democratized access to crypto investments, enabling both seasoned traders and novices to participate in the market with greater confidence and strategic insight. Roboadvisory in the realm of cryptos refers to the application of automated financial services, driven by algorithms and artificial intelligence without direct human intervention. These advisors offer trading signals, alerts, and other important information to assist traders in crypto trading endeavors. These digital advisors collect information from clients about their financial situation and future goals through an online survey and then use the data to offer advice and automatically invest client assets. They help traders and investors to invest their money in crypto assets. 

The main appeal of crypto robo-advisors lies in their ability to provide personalized investment strategies, continuous portfolio management, and market monitoring algorithms to analyze price trends, predict future movements, and execute trading orders to optimize portfolio performance. 

Robo-advisors are advantageous in the crypto space because of their speed and efficiency in the highly turbulent crypto markets. Robots can adjust strategies in real time, making them super flexible in highly volatile markets. 

The Best Crypto Signal Providers 2024

The platforms below, not only provide signals but fully automate investing and trading for crypto assets, offering superior flexibility and simplicity for even crypto beginners.

Bitsgap

Bitsgap is an online platform that offers educational resources about cryptos and has diverse offerings of trading robots and signals. Some of these robots even use artificial intelligence to ensure the highest accuracy. The 7-day trial ensures traders can first test the accuracy of signals and only then invest real money for a subscription, adding to the platform’s legitimacy. Bitsgap has trading robots for popular crypto exchanges including Kraken, Bybit, AI bots for OKX, Coinbase, and Binance.

Wealthfront

Wealthfront offers automated investing solutions with advanced robots. The platform aims to provide a long-term automated investment portfolio building. The minimum deposit is 500 USD within 30 days, excluding tax-advantaged or 529 accounts. Eligibility requires passing Wealthfront’s identity verification, depositing 500 USD, and maintaining it for at least 7 days. Along with automated investment accounts, there are also bond portfolios, targeting long-term growth and higher yields than traditional savings accounts. Services by Wealthfront include expert-built, globally diversified portfolios personalized with up to 17 asset classes including cryptos. Features include automated reinvestment, rebalancing, and tax-loss harvesting aimed at boosting after-tax returns while helping investors in keeping investment costs low.

M1 Crypto

The M1 is an automated investing platform that offers users crypto investments. M1 Finance recently launched its crypto product called M1 Crypto. It offers auto investing in a portfolio called M1 pies. Pies help traders diversify their capital by investing in multiple instruments simultaneously, making crypto investing less risky. The service emphasizes easy portfolio organization to make investors’ lives easier. Additional features include weekend and on-demand trading for M1 Plus members, dynamic rebalancing with every deposit, and secure crypto storage through a partnership with Bakkt. M1 Finance aims to provide total control over a diverse range of investments (retirement, brokerage, crypto) in one app. There are no commission fees for trading, only crypto transaction fees are applied. M1 Plus members can benefit from added trading flexibility. 

The Mechanics of Automated Trading Systems

Automated trading systems also known as algorithmic trading, execute trades based on a set of predefined rules and strategies without manual intervention from the trader’s side. Traders can buy crypto accounts in minutes using M1 Pies. Traders can create custom Pies, use M1s, or both. Investors can also set a target percentage for each Pie in their account and turn on automated trading to achieve these targets. 

The exact mechanics of automatic trading systems vary depending on the robo-advisor goals and algorithms used. However, many robo-advisors share key components: 

Market data analysis

This is the most critical part of any algorithmic trading system. Every robot has to employ market data analysis techniques to ensure signal accuracy and relevance. The system monitors and analyzes market data, including price movements, volume, and trends, to identify potential trading setups.

Signal generation

Once a potential trading setup has been detected, the algorithm generates a signal based on predefined criteria, defining the signal nature of buy, sell, or hold. This signal can be sent to the investor or used by the robot itself to execute trading positions. 

Risk management

Automated trading systems incorporate risk management strategies that are adjusted to the specific strategy they are employing. Risk management is also implemented according to predetermined criteria and includes setting a stop-loss order, managing position sizes, and diversifying portfolios to mitigate potential losses. 

Execution

This is a part where the system executes orders according to the signal generated. The system executes trades automatically, ensuring timely and efficient order placement. This is especially important in the turbulent crypto markets, where large price swings are a common occurrence. 

Backtesting

Before launching the algorithm on a live account, extensive backtesting and tweaking is a must. During the backtesting phase, Robo-advisors are tested on historical data and then on demo accounts to ensure their relevance. AI systems also heavily rely on historical data, as they are trained on it to decrease error and increase accuracy.