Digital currency trading is growing to be a major venture attracting mainstream retail and institutional traders. The inflationary levels on prominent cryptos continue to display their purchasing power in a market hosting over 8,500 digital assets.
However, without a strategic investment plan, crypto trading can be a bit complex to maneuver for novice traders and well-versed investors. Shrimpy brings you a unique trading approach with an automated architecture aimed at making trading easier for anyone. The platform mainly operates as a portfolio management ecosystem launched in early 2018.
Through its automated trading model, users can meet their long-term goals, improve their performance strategies, and minimize possible risks. Below is an evaluation of how Shrimpy’s automated network eliminates the need for handling technical details while trading.
Trading Bots
Cryptocurrency bots are designed as software that executes trades on behalf of the user. Instead of initiating a trade manually, Shrimpy allows its users to automate their tactics by integrating bots into an account. Once set up, the software can achieve endless possibilities ranging from trading, real-time arbitrage across exchanges, and many more.
To grant access to a bot, users need to submit their API private and public key information, which notifies exchanges of a trader’s attempt to delegate trading actions to a bot. API keys are safely stored and encrypted using FPS 140-2 validated hardware security modules.
Additionally, your investment remains intact in your exchange account as the API solely reads data and initiates trades and cannot withdraw the account balance. By leveraging Shrimpy APIs and the Universal Exchange APIs, traders can automatically automate their trading methods and access crypto exchanges such as Binance, COINBASE Pro, Gemini, KuCoin, Kraken, Huobi, Bittrex, Bitstamp, and Poloniex.
Asides from executing trades, Shrimpy APIs also gather market data, share social portfolios, monitor performance across exchanges, to mention but a few.
Benefits of Bot Trading
Bot trading solutions have several advantages that go a long way when employing an automated trading procedure.
Accuracy
Manual execution of trades is prone to errors that may miss out on securing potential profits. A slight mistake can affect your portfolio balance to a greater extent due to a lack of precision. However, bot trading makes the most accurate trades precisely at the right moment faster than performing the trade manually.
24/7 Market
The digital currency market runs round the clock, making it challenging to monitor market trends continually. On the other hand, your portfolio may need to be analyzed frequently to decide on significant trading actions.
Due to this reason, bot trading handles a trader’s portfolio by implementing the set strategies in their absence. That way, traders do not have to worry about missing out on any market activity that could boost their portfolios.
Handles Repetitive Tasks
Bot trading handles any repetitive task that would consume a trader’s time and energy. The software breaks the monotony of doing one task repeatedly, which may encourage a loss of interest in rebalancing portfolios.
Portfolio Rebalancing
Usually, a portfolio includes an array of digital currencies that a trader deems worthy of investment. Therefore, Shrimpy conducts automated rebalancing of these digital assets found in the portfolio. For rebalancing to be effective, users are required to determine the allocation percentages of the assets chosen.
Rebalancing procedures are fit for the cryptocurrency sector because of their volatile nature. If a coin experiences gains, rebalancing will circulate those profits to other assets. Consequently, if the digital asset’s price drops to its original price, rebalancing will automatically net the portfolio gains over that time-frame.
At Shrimpy, bot trading utilizes two rebalancing techniques to manage a trader’s portfolio;
Periodic
Under the periodic model, the rebalancing of assets takes place within a set time. Since cryptocurrencies are the significant assets in use, a portfolio may rebalance these assets automatically after 24hours. Periodic rebalancing assists in changing the allocation rates of assets to their initial level. Rebalancing a portfolio after one day, for example, limits facing the harsh volatility rates of cryptocurrencies.
Threshold
Alternatively, Shrimpy automated trading allows rebalancing a portfolio by adjusting the allocation percentages to a targeted and preferable level. Threshold rebalancing occurs when there is a difference between the targeted and current allocations.
For instance, a user may decide to add five assets to his portfolio, each with a targeted allocation of 20%. A threshold will occur if any of these assets deviate beyond the 20-30% allocation mark, prompting an automated threshold rebalancing procedure.
Interestingly, if the digital assets’ value surges simultaneously without adjusting the portfolio’s total percentage, a threshold rebalancing procedure will not happen.
Copy Trading
Shrimpy supports a large user-base of traders who share trading insights and generally interact with each other. A social leaderboard is also in place to view all the leaders available on the Shrimpy network. The automated trading concept applies here when users enjoy the privilege of copying another trader’s strategy.
In essence, Shrimpy updates a follower’s portfolio and copies the new allocations if the leader’s account balance changes in an exchange within intervals of one minute. The same goes for a scenario whereby the leaders executed a trade outside Shrimpy as it will only detect the change and copy the latest allocations.
Copy trading starts by selecting a portfolio that will undergo real-time allocation changes based on a leader’s trading actions. Traders then have to acknowledge Shrimpy’s intent of automatically trading a follower’s portfolio.
Once complete, the followers head over to Shrimpy’s social tab and search for the most appropriate leader using the same exchange platform as a follower. Everything will be ready when the follower identifies and selects a leader based on their trading strategies and reputation.
Copy trading begins to run moments later while regularly updating a follower’s portfolio to match the chosen leader precisely.
Starting the Automation Option
Before anything, traders have to visit Shrimpy’s easy-to-use interface and click on the “start automation” option. From there, users have to choose a suitable trading strategy and a portfolio that will undergo the automation procedure.
A point to remember is that users have to select a portfolio that emerges as a pop-up right after clicking the start automation option. There is also a “stop automation” section that eliminates the automation feature from a portfolio.
After clicking the stop automation option, Shrimpy instantly stops trading for a portfolio until a trader decides to continue with the same automation or embark on new automation.
Conclusion
Shrimpy offers an automated trading technique whereby users don’t go through the intimidating hassle of complex trading. Through the trading bots, users can make the most out of their investments as bots eliminate error chances.
Portfolio rebalancing strategies ensure the trader’s allocations don’t swerve beyond the preferred/targeted allocation. The social platform is also home to an interactive global audience where traders talk and share their trading techniques.
Considering the wild, volatile speed of digital currencies, it would be wise to adopt a useful tool to counter losses. Risks are inevitable when trading with cryptocurrencies; nonetheless, employing the right strategies and harnessing the power of platforms such as Shrimpy can be rewarding in the end.
