Best Trading Bot

Cryptocurrency trading bots are a hot topic, i mean think about it, like you just put money inside of an app, you turn it on, and it makes you more money while you sleep so sounds too good to be true right.

Well, in many cases it is because what you don't see is that a lot of time, these bots can be completely wrong and blow your account, but in this video i wan na talk about trading about that can't lose You any money there's; zero risk involved, all right so before we get into that.

If you're new around here, hey i'm gregory and on this channel i turn you into a blockchain master. So if that's, something that you're interested in then smash the like button down below and subscribe to this channel.

And if you want to learn how to master blockchain step by step from start to finish, then head on over to dappydiversity.com forward, slash bootcamp to get started today. So before i tell you about the best trading bot strategy, let me tell you about most trading bots.

How they work and why this is potentially bad, so most trading bots try to predict the future right. They try to like look at cryptocurrency prices right now and determine you know, is it going up? Is it going down? Should i buy? Should i sell to accumulate more cryptocurrency at a profit, but there's, a problem with this.

These trading bots can totally blow up, and if they do, then they can be. You know wrong and you can lose money so, instead of trying to predict the future of cryptocurrency prices, i want to show you how you can create trading bots to act on price discrepancies right now, so this is called arbitrage and basically it's.

Where you buy cryptocurrency on one exchange and then sell it on a different exchange for a profit, so, for example, if cryptocurrency is selling for a hundred dollars on exchange a then you can buy it on exchange a and turn around and sell on exchange b.

For you know 101 dollars and get that one dollar profit. Now this doesn't, look like a lot of profit, but what, if you could scale this up right? What, if you could do this with uh? You know ten thousand units of that particular cryptocurrency.

It's like it's, ten thousand ether and there's. One dollar price discrepancy, then that's, a ten thousand dollar profit or let's say you could do it multiple times across time. Okay, so you know say you can make this trade ten thousand times well.

That would also be a ten thousand dollar profit. Okay, so you can create trading bots that do this and they ' Ve existed for a long time right with centralized cryptocurrency exchanges. You can see you know all the prices here and you could go.

Do this right now you don't even need a bot to do it, but here's, the problem. You know these prices can move really fast. So when people detect these discrepancies on cryptocurrency exchanges, you know they want to jump on these opportunities, and so you could lose money if you were trying to arbitrage with your by yourself or arbitrage with a traditional bot on a centralized cryptocurrency exchange, but with blockchain technology.

You can actually create trading bots that can't lose money. So let me explain how that works. So, in order to do this, you need to find a blockchain that supports multiple cryptocurrencies. So ethereum is a great example of this because it powers a ton of different cryptocurrencies.

So if you've ever been on a website like uni swap, for example, this is a cryptocurrency that's, actually blockchain native. It runs on top of the ethereum blockchain, it's, powered by smart contracts, and you can trade lots of different cryptocurrencies called erc20 tokens.

All right, you can go see a list of erc20 tokens like this. These are all different cryptocurrencies that are run on top of the ethereum platform like chain link, usdc right all kinds of different tokens, so these cryptocurrencies are all powered by smart contracts.

On top of the ethereum blockchain. That's. One of the reasons that ethereum's, so powerful is because you can, you know, create your own cryptocurrency without creating your own blockchain. You can just put it on top of ethereum.

You know write some code, put it on ethereum and boom. You have a cryptocurrency that's live and all these cryptocurrencies can interact with decentralized exchanges right these native cryptocurrency exchanges that are on the blockchain.

So stick with me. Let me tell you why this is so important, because these cryptocurrencies and also these exchanges, like uni, swap, for example, are native to the blockchain. You can create arbitrage opportunities that can't lose money.

So let me explain how that works. Basically, if you look for exchange a and it's native on the blockchain, and you look for exchange b, that's also native on the blockchain, you can create an ethereum smart contract that trades between those two exchanges and the transaction Will only be successful if the trade is profitable so remember i talked about that problem a minute ago where you might try to buy cryptocurrency on one exchange and sell on another with some of these centralized exchanges right like uh bitfinex, you know, binance, coinbase, etc, etc.

If you try between those exchanges, they don't talk to one another, but all the exchanges. On top of the ethereum platform like uni, swap, for example, uh. You know balancer. All these exchanges live natively on the blockchain, so you can write smart contracts that hook into those and when you try to do that, arbitrage transaction.

If it's not profitable, and if the price hasn't moved, then the trade will fail, it will not go through and you can't lose money on that trade. Now, of course, you could lose the gas fee when you attempt to make that trade.

So there is some some risk there, but it's way less risk than if you were going to try to do thousands of dollars in cryptocurrency and then the price moves. And then you're out that loss now here's where it gets even crazier because of blockchain technology.

You don't even have to have the cryptocurrency. In order to do this, all right, you can do it completely with borrowed money, how with something called the flash loan all right. This is where you can borrow millions of dollars in cryptocurrency with zero money down.

You can use it for trading as long as you pay it back in the same transaction. So let me explain how that works. Basically, there are these liquidity pools on the blockchain with millions of dollars where you can, just you know, borrow literally a million dollars or more uh trade with it and then pay it back instantly.

Okay, so that's, because the blockchain supports uh, complex transactions, so a simple transaction on the blockchain would be like. I just send you cryptocurrency all it does inside. That transaction is basically update.

My account balance and your account balance to see that they ' Ve changed all right, but you can create more complex, uh transactions. Where you do things like. You know, dex trades or decentralized exchange trades.

If you want to do this, uh buy on exchange a on exchange b, that's, part of the transaction, also taking out the loan with the flash low and then paying it back is also part of that transaction. So you can do all this natively with ethereum smart contracts in the blockchain and that's, the heart and soul of how you create a cryptocurrency trading bot that cannot lose money, and this is probably the best strategy for 2021.

. So what do you need to do this all right? That's, the theory about how this works, but uh? If you're gonna create one of these yourself, so you can take advantage of this big opportunity. What are the actual pieces that you need? Okay, so the first piece is that you need uh to create an ethereum smart contract to do this.

Okay, so smart contract, so ethereum smart contracts are written in the programming language called solidity. So this is a programming. Language looks a lot like javascript is the one i teach you on this channel and also in some of the blockchain bootcamp all right.

So if you want to learn solidity, you can check out those free videos on my youtube homepage or you know, join the bootcamp. I can show you everything step by step. Alright, so you can write these smart contracts just directly inside your browser.

You don't have to download anything on your computer to get started today. You could go to remix.ethereum.org, create a new file, create your solidity code, uh to create a contract that will do one of these trades.

Okay, so that's. The first thing you need a smart contract to do these complex transactions and create that sort of fail-safe uh. You know mechanism for these trades so that your bot can't lose money.

So the next thing uh you need to integrate flash loans. Okay, so there are different ways that you can do flash loans, and i want to give you some ideas on that right now, so there are several different flash loan providers out there, so one of the most popular ones is ave all right because they have huge Liquidity reserves, where you can borrow you know millions of dollars in cryptocurrency to use for trading.

You know d5, whatever you want to all right, so ave actually has some developer documentation that will show you how to get set up uh with flash loans and your solidity smart contracts all right. So you can check that out.

Um also dydx is another flash loan provider all right and then also uni swap itself has uh flash swaps, which you can check out uh on this page here as well uh and the developer resources i'll, show you how to use flash swaps.

Okay, so um another thing to check out. If you're, just getting into flash loans is furu, combo. Okay, i hope i'm, saying that right uh. Basically, this is where you can create defy recipes uh directly in your browser.

You have to write any code, so if you want to get your hands dirty on this, maybe you see a flashlight opportunity uh and you don't want to like write a full bot to do it. Then you can do that with furrow combo directly in your browser without any coding all right, so that's, another good way to just start thinking about it and if you decide not to use it, it's still good to visualize.

What's happening, if you want to? You, know, make these d5 recipes, and so the last major piece that you need is some sort of price discovery bot all right. So let me explain what i mean by that you could trigger a flash loan yourself right, let's say you see a discrepancy.

You want to create a smart contract, you could call it manually or you could do it manually from like photocombo, but most likely you want to have something that watches for these opportunities all the time and then calls your bot okay, so that's.

What you want to do here is basically create an app or a bot that watches different cryptocurrency prices on different exchanges. You know waits for those discrepancies to happen, so they can trigger the flash loan that they can call your smart contract directly.

So the good news is, i have a sample project for this on my github right. This is dappy diversity, uh price bot - i'll, put a link this time description below this. Will uh get you running so that you can start watching those cryptocurrency prices on different exchanges, and so once you have all these pieces together, you know you basically create a smart contract.

Uh you put on the blockchain, you plug it into a flashlight provider. You write the code to you, know, do the trade and then you create a price discovery, bot that watches for those differences and then triggers the smart contract, uh transaction whenever it finds one and then does the arbitrage all right.

So that's. An overview of everything you need in order to build a cryptocurrency trading bot that can't, lose you any money. So if you want to learn the technical skills to do this, then how can you get started today? Well, i can show you the programming language that you need directly on this channel.

You can go to my youtube home page. You can find any of my free courses there. There's like they're like udemy courses, but they're totally free, but uh. If you want to take the next step or hey, you're gonna take a massive shortcut entirely and just go for the throat.

Then i can show you how to build a real world application step by step from start to finish, to learn these programming languages over at deputyversion.com forward. Slash bootcamp there's, even a bonus section uh, where you can get access to the content where i show you about flash loans and also how to build a trading bot.

There's, a complete code solution for it, uh that you can get access to as well, so just sign up over at deputyversion.com for slash bootcamp to get access today, all right, so that's. All i've got until next time, thanks for watching