Crypto markets are currently on the decline, but smart traders are seeing an opportunity to build their portfolios using automated trading bots to continue making profits. While many retailers and crypto-enthusiast investors fear the market, seasoned traders see it as an accumulation phase. Assets are currently low priced and smart traders buy and sell because they know how to win in any market.
As a bear market trader, what you’re looking for is daily up and down price movements within a general downtrend or sideways trend. Buying small dips and selling small jumps is tiring if you are a manual trader, so you might want to consider using an automated trade management system that uses bots to execute your strategy.
How do traders make money with bots in a bear market?
A bear market trader will most likely need to do a lot of small margin trades to make a profit. The best way to do this without driving yourself crazy is to use bots like the pros use.
For a market that is still falling or experiencing high volatility, you need to use a DCA bot that uses local or 3rd party signals to tell you when to open or close deals. Traders can configure them to buy when the price drops a certain percentage, and then trigger a sell when the price rises again. This is a very simple explanation, but the bot is extremely flexible. It can also be set up for long or short strategies as well as trading Futures on an exchange like Binance.
If the coin you want to trade is moving sideways, bouncing between support and resistance, you can use a Grid bot. A Grid Bot has a series of horizontal price lines. As the price drops towards the support, the bot places a buy order on each line. As the price rises towards the resistance, it places a sell order on each line. Taking advantage of these small price movements is also known as scalping. This allows traders to earn consistent profits from a coin investment where HODLers will see no value.
For newer traders, we recommend choosing a platform that offers preset bot templates for DCA or Grid bots as this will greatly simplify configuration. Even advanced traders can benefit from these preset templates, as creating a new bot is simply faster and there is no need to create a bot from scratch if they have already set one up for the exchange and coin pair you want to trade.
On the other hand, options bots are also a great choice. A put option contract allows you to sell at a specified price when the option contract expires. Example: One week from now, you buy a Put option for a BTC at $19,000 with the current price of $20,000 and a premium of $500 for the contract. The price drops to $16,000 and you exercise this option and sell it for $19,000. With the $500 contract fee subtracted, you regained $2500 instead of losing $4,000. But if you don’t want to sell your BTC, you can instead sell your Options contract to someone trying to get out of their position, and this is where you can really profit from Put contracts.
If you want to accumulate assets while they are cheap, you need a HODL bot. This bot buys a fixed amount of your chosen asset at the interval you specify. For example, you may have set it to receive $200 BTC every Thursday at 9 am. This is perfect if your main goal is to accumulate an asset with historically strong price performance like Bitcoin.
As always, we recommend that you research not only the coins you want to trade, but also the platform you want to use. We recommend 3Commas because they have been around since 2017, their bots are very robust and flexible in what you can configure them, and they support all major exchanges.
In addition, 3Commas offers a 15% discount for a monthly PRO subscription. You can use the promo code: JDsxTnun
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