Building a Cryptocurrency Trading Robot for Bitmex with Python - Part 1

in trading •  12 days ago

Good day Everyone!!!

Once in every trader life they've wondered if its possible for you to automate their trading so they make money in their sleep, Some traders have gone as far as purchasing bots from various market places and some with programming skills have attempted creating one themselves, Some have searched GitHub for various bot examples. Some were successful in this quest others weren't. Well if you're in search of any or looking to program one yourself or you have one and you want to improve it well this is the right place for you. I will be teaching how to program a basic trading robot that can work for any Cryptocurrency exchange or Forex with Python but i will be focusing more on Bitmex in this tutorial.

This is the part one of the tutorial so i will just go through some basics here then we go into hardcore coding in part 2 and part 3 maybe.

So lets go through some basics of building a bot.

How Trading Robots work?

Most Trading Robots work with Technical Analysis which employs trading rules based on price and volume of a market to determine the trend direction. Examples include Relative Strength Index (RSI), Moving Averages, Bollinger Bands, MACD (Moving Average Convergence Divergence), Commodity Channel Index (CCI) just to name a few. They are basically formulas that take the market price data as inputs and produce outputs that can help us determine where the current trend is headed. I've heard of bots that make use of Machine Learning Technology and Artificial like Recurrent Neutral Networks (RNN) that try to predict market price by being trained with past data sets. Some bots follow signals of manual traders, Some bots practice arbitrage which involves buying an asset on an exchange for a low price and selling in another at a higher price. For our example we will be creating a basic bot that follows Technical Analysis looking for MACD crossovers for entry and exits. It can be reconfigured for any exchange but i will be working with Bitmex for this tutorial.

User Requirements for the tutorial

  • Basic Python Knowledge: You need basic knowledge of the Python Language, functions like outputs, arithmetic operations (+, -, /, *), Logical operations (if, elif, else) and some other basic things. If you don't have any you can head on to Sololearn they have a good basic python course there. Or you can check out The New Boston Python tutorial series. Here is also a free Python Udemy tutorial you can enroll to.
  • A computer system (Obviously)
  • And last but not the least Time

In the part 2 of this tutorial we will get started with the main coding. See you there that's all for now 😉

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I will post the link to the Part - 2 of the tutorial right here in the comments