Trading bot on Binance and how to make the most of automated trading

TutorialsMay 2, 2022

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Automated trading (trading bot) is something that many traders regularly use in the forex market. And after the cryptocurrency market was developed, the exchanges that used the trading coin bots were quickly chosen by the traders. Binance is one of several cryptocurrency exchanges that allow the use of trading bots. The following article teaches how to use the trading bot on Binance and some notes.

What is Binance Trading Bot?

According to a predefined strategy, a trading bot is a software application or program designed to automatically buy/sell on an exchange on behalf of a trader. Using a trading bot makes trading faster, more disciplined, and saves more time for users.

Trading Bot on Binance uses a trading bot created through a programming language and installed on a Binance account via API keys (Application Program Interface). This feature requires users to have skills in using Python code generators or using bots created by 3rd parties.

Besides, Binance also has a Spot Gid feature that supports automated trading easily. Spot Gid is a tool that supports an automated trading strategy with a preset time and a predefined price range. The Spot Grid feature helps users profit from price movements when the market is volatile or sideways.

How does the Binance trading bot work?

The trading bot connects to the cryptocurrency exchange and automatically opens trading orders according to the presets. Users of the trading bot on the Binance exchange need to authorize their account via an API key. Trading bots work in three phases: Signal generation, risk allocation, and trade execution.

Signal Generation: After connecting the trading bot on Binance, the signal generator makes predictions and identifies the best trading opportunities based on market data, technical analysis, and required parameters in the trading bot. Translate.
Risk Allocation: This trading bot feature allocates risk according to preset rules. Like the allocation of trading capital, those rules determine the percentage of assets the trading bot can make trades.
Trade Execution: After the signal generator finds a trading opportunity and determines the risk allocation ratio, the bot executes a buy or sell order. The bot trades by sending a request through the API key associated with the Binance account, and the transaction is executed.

How to use Spot Grid on Binance

To trade automatically through Spot Grid, it is necessary to log in to your Binance account. If you have not opened an account, please register an account by following the link below:

* See more: The complete guide Binance from a to z

On the toolbar, click the Trade tab and select Strategy Trading.

Click Next to see step-by-step welcome instructions when accessing the Bot Grid feature for the first time and select Start Trading.

Trading bot là gì? Bot giao dịch Binance hoạt động như thế nào? Cách sử dụng Spot Gird trên Binance. Cách sử dụng bot giao dịch trên Binance

Next, choose the type of trading asset you want to use Bot Gird: Spot Gird or Future Gird.

Trading bot là gì? Bot giao dịch Binance hoạt động như thế nào? Cách sử dụng Spot Gird trên Binance. Cách sử dụng bot giao dịch trên Binance

Select Auto or Manual mode. With Auto mode, users only need to fill in the investment volume and select Create. Trades are executed according to the pre-set parameters of the profit rate and highest and lowest price fluctuations.

In manual mode, there is two modes Arithmetic & Geometric mode.

  • In Arithmetic mode, each grid has an equal spread.
  • In Geometric mode, each grid has an equal rate of the price difference.

Fill in the transaction information, and click Create to complete.

  • Lower Price: The lower limit price in the Grid. The trade is not executed when the market price is below the Lower Price level.
  • Upper Price: The upper limit price in the Grid. The trade is not executed when the market price is above the Upper Price level.
  • Grid: Divide the upper limit, and lower limit price ranges into different grids.
  • Invested Coin: The user chooses to invest in a cryptocurrency or a cryptocurrency pair.

When you want to stop the active gird bot, click End to stop. Running trades will be automatically canceled, and Binance will be paid profit or loss for the user at market price.

Overall, the Grid feature is a pretty simple form of bot trading. You need to understand how it works to place an order without knowledge of 3rd party code generators.

How to use trading bots on Binance?

Using the trading bot is more demanding than using the Bot Grid feature. Users can create bots themselves through the Python code generator or find free bots on the Internet. How to use the trading bot is as follows:

Step 1. Generate API Key

Log in to your Binance account. If you do not have a Binance account, register at the link below:

* See more: The complete guide Binance from a to z

From the account management tab, select API Management.

Trading bot là gì? Bot giao dịch Binance hoạt động như thế nào? Cách sử dụng Spot Gird trên Binance. Cách sử dụng bot giao dịch trên Binance

Next, name the Transaction Bot you want to create and click Create API.

Trading bot là gì? Bot giao dịch Binance hoạt động như thế nào? Cách sử dụng Spot Gird trên Binance. Cách sử dụng bot giao dịch trên Binance

Enter the verification code and confirm the request to create a bot Binance sent via email. After clicking the link, the user is redirected to the API management page.

Store API passwords and secret passwords in a safe place.

Do not grant withdrawal permission to the trading bot to ensure trading safety.

Step 2. Connect Trading Bot to Binance Account

Log in to the account containing the trading bot, and copy and paste the API key and secret key into the respective blanks. Click Connect to finish.

Step 3. Create your rule

After connecting the trading bot successfully, the user needs to set the parameters for the trading bot on the bot management page and save it.

Step 4. Activate the trading bot to work

To activate the trading bot, click Launch on the bot management page. A pop-up window summarizes the set trading rules. Then click on Live Launch.

Conclusion

Manual trading has always been the choice of many amateur traders. However, automated trading also has some advantages, such as:

Trading Bot is not affected by emotions.

More than 80% of traders do not make money and lose even more when the mood is not stable. If a suitable trading strategy is chosen, a trading bot helps users make trades more efficiently and disciplined. From there, it brings higher efficiency.

Trade bots are faster and more accurate.

The trading bot can make buy/sell at any time. This helps traders be more proactive in managing their personal time and trading time.

Investiki.com

Read more: Binance

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