After a volatile start to the year, the markets have calmed down recently, encouraging traders to reevaluate their automated trading bot portfolios and adjust them for the potential formation of a new sideways trend.
In this article, we’ll explore sideways trends, how to identify them, and the best ways to capitalize on them with automated crypto trading.
How Can We Tell That the Market is Trending Sideways?
As its name suggests, a sideways trend is a time in the market when prices aren’t making strong moves upwards or downwards. Instead, they move horizontally as they maintain a relatively stable level of value.
A sideways trend usually has distinct lower and upper borders, and prices tend to trade within this specific range until the trend ends. Lower trading volumes and lower levels of volatility can also identify these trends.
Best Crypto Bots for Sideways Markets
Not all crypto bots can successfully tackle the unique qualities of a sideways market. As of today, two types of crypto bots distinguish themselves as the most suited solution for this subtle type of trading:
Grid Bots
Grid bots are crypto bots designed explicitly for trading during sideways market trends. They are a simple and efficient solution for exploiting these markets' opportunities.
This crypto bot got its name from its design. By capturing any subtle movement in prices, a grid-like structure of potential trades is deployed, each with its parameters and exit points. As prices fluctuate within this grid, trades are being triggered, and the grid bot automatically manages our positions according to our personal predefined preferences.
By focusing on relatively low-risk and high-paced trades, grid bots offer a very appealing risk-reward ratio compared to other automated trading solutions. Combined with their high level of customizability, grid bots can be a great addition to any serious crypto trader.
Signals Bots
Signals trading, also known as copy trading, offers a very different approach to trading in the crypto markets when they trend towards a horizontal channel. Instead of trying to figure it out yourself, Signal traders can simply copy the trades of professional crypto traders, exploiting their experience and expertise for their benefit.
The first step in signal trading is subscribing to one or more signal channels. These are platforms on social media where traders can follow the market activity of crypto trading experts. When a new trade or any other change in position happens, subscribers to the channel receive an immediate trading alert. These alerts are called signals.
The next step is to convert these signals into actual market orders. This is what signals bots are for. By automatically copying any received signal with maximum precision in the blink of an eye, even the most novice traders can trade like a pro.
Through this unique configuration, signals trading offers an excellent solution for traders from all levels: trading during sideways market trends in a rewarding way that doesn’t take up all their time.
Final Words
While bullish and bearish markets may be considered more exciting, sideways trends are the most common market condition.
Nowadays, with a new generation of crypto bots specifically designed for the task, traders finally have the option to capitalize on sideways market trends efficiently and to truly enjoy the potential of automated crypto trading at all times.
Akash Kashyap
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