Auto Trade Best Practices
Crypto-ML’s Auto Trade is a crypto bot trading service designed to automatically initiate machine learning-generated trades on your account to manage your crypto portfolio.
Based on our data and user feedback, we have compiled four key best practices to help ensure Auto Trade can work optimally to deliver you the best results.
By following these tips, your personal results should follow our Trade History as consistently as possible.
While this summary may be helpful, you should read this entire post to understand the details behind this summary. This is important because all traders are different and these recommendations may not be suitable for you.
Best Practice 1: Trade on Binance (not Coinbase Pro) against USDT.
Best Practice 2: Optimize your Binance fees by paying with BNB.
Best Practice 3: Minimize emotional reaction to trades. Qualify on/off decisions with your personal strategy.
Crypto-ML Trade History
Crypto-ML’s trade history shows every trade alert that is generated by our platform’s machine learning. Each entry denotes the following:
- When an alert was generated (timestamp)
- The price the alert was generated (value in the appropriate currency)
When a trade alert is generated, Auto Trade will immediately send an order to your exchange account. This eliminates manual steps in the process and minimizes any lag.
Why Your Trade Results May Vary
The results in your account may differ from our trade alerts for several primary reasons:
- Trade fees
- Trade slippage
- Manual intervention
Fortunately, managing these factors can dramatically improve your results.
Step 1: Reduce Trade Fees
Fees can hugely impact active traders. Minimizing your fees is the #1 action you can take to get the best possible performance out of Auto Trade.
Crypto-ML seeks to lock in trade profit at around 2%. This is determined by machine learning and can vary over time, but keeping targets small reduces exposure to market uncertainties and also compounds your returns faster.
If target gains are single digit, fees really matter.
Specifically, the base level fees on Coinbase Pro are 0.5% per side. This means to complete a trade (buy and sell), your fee will be 1%. That eats up half of your average winning trade. It also adds a considerable amount to any losing trade.
Binance, on the other hand, charges base fees that are much better suited for the type of trading done by Auto Trade. At the base level, a round-trip trade will cost you 0.15% on Binance. That’s a massive difference.
Recommendation: Trade on Binance and pay for fees with BNB.
From your Binance Dashboard (main page), you can further reduce your fees by paying with BNB.
There may be other reasons for you to personally select Coinbase Pro. And as your account size and activity grow (both with Coinbase and Binance), you will receive fee discounts. Please fully investigate the best solution for you.
For more detail, read out post How To Reduce Crypto Trading Fees.
Step 2: Reduce Trade Slippage
Trade slippage occurs when the price at which your order is filled is not the same as the price at which the trade alert was generated.
- Alert: BUY Bitcoin at $16,250
- Your order then fills at $16,280
- Adverse slippage: $30
In this example, there is $30 of slippage that negatively impacts you. You bought Bitcoin at $30 higher (worse) than the alert. Just like with fees, small slippage can add up over time and dramatically impact your results.
Of note, slippage is not always a negative. It’s also possible to have your order filled at a better price than the alert.
In general, slippage tends to even out over time, however, it is best to minimize contributors to slippage so that your results best match our Trade History.
Pick the most liquid trading pair on your exchange.
The more people you can trade with, the more likely your trade will be filled quickly and at the price you’re expecting. As a trader, you should seek markets with high volume and avoid markets with low volume.
Across our supported exchanges, both BTC and ETH are highly traded. But you will select a USD-variant to trade against, which is an important variable. The USD-variant volume will vary by exchange and region.
When it comes to Auto Trade recommendations, the general guidance is:
Recommendation: On Binance (all versions), trade against USDT. On Coinbase Pro, trade against USD.
Our post Optimize Your Crypto Bot Trading with Exchange Liquidity covers more detail on this topic along with stats and graphs.
Step 3: Avoid Emotional Reactions
A common error made in trading is to intervene in a system immediately following big wins and losses. After such events, emotions tend to run high.
Oftentimes, people emotionally react to losses and shut off Auto Trade only to miss out on several winning trades. After the series of winning trades, they regain confidence in the system, only to turn it on in time for the next loss. This yo-yo behavior will cause you to deviate from Crypto-ML’s results.
Crypto-ML can and will issue losses. Regardless of how accurate our (or any other) machine learning is, there will always be times of exceptional and chaotic market behavior.
Crypto-ML’s losses are typically isolated and not experienced back-to-back. You can view our Trade History to see how the system tends to perform after losses.
After a loss, it is best to analyze the market, review your trading plan, and then make an informed decision on your next steps.
Recommendation: You should always maintain control of your trading account and turn the system off when it does not align with your strategy and trading goals.
That statement implies you have a clear strategy and set of goals. Rather than reacting emotionally to trades, you should be able to objectively make qualified decisions to turn Auto Trade on or off.
Putting these best practices in place may significantly change your results with Crypto-ML Auto Trade. They will also likely improve your overall trading performance, whether you use another bot or manually trade.