In this case, a trader or Bot is a software program that tracks the price of (crypto) currency 24/7 and is able to generate buy and sell orders for that (crypto) currency within user-defined limits.
The Algorithm Behind the Trader
The trader using the Wealthybot setting works according to the so-called MACD method. The MACD indicator stands for Moving Average Convergence Divergence and is a momentum indicator that is calculated by multiple moving averages. The indicator shows the direction of the trend and the strength of this trend. In addition to these data, the indicator occasionally issues a buy or sell signal.
The MACD indicator consists of two lines, both of which are calculated differently. First of all, the MACD line, it is calculated by subtracting the moving average of the past 26 days from the average of the past 12 days. The second line we encounter in this indicator is the signal line. This is the exponentially measured average of the past 9 days. Both lines form the MACD indicator. Not only the direction of the lines gives a signal, also when the lines intersect the indicator gives a signal.
The MACD (red line) first indicates the direction of the trend. With an ascending MACD line, the trend is positive, with a downward line it is negative. In addition to the direction of a trend, the indicator also issues buy or sell signals. If the MACD line crosses the signal line upwards, this is a buy signal. Conversely, when the MACD crosses the signal line downward, the indicator issues a sell signal. Finally, the indicator says something about the strength of the trend. The greater the distance between the two lines, the stronger the trend. The MACD is thus a trend-following system based on the moving average.
As soon as the blue line crosses the red line, there is an upward trend. The trader will then initiate a purchase. As soon as the blue line dips below the red line, there is a downward trend. The trader will then initiate a sale for all Bot trades "pockets" with sufficient returns. With this programming the Trader is able to recognize and output buy and sell signals automatically.
How do Buy and Sell Signals Work?
First of all you need an account with one of the following exchanges: Binance US or Binance International. Once you have activated that account and deposited funds on it, you can link the trader to the exchange.
The trader and exchange are in contact with each other via API link: The meaning of API is Application Programming Interface. The API exchanges data between two software systems in this case Wealthybot and your exchange. The trader can communicate with your Exchange account via the API link and pass on purchase and sales orders to your account.
How much does the Trader Bot buy?
We recommend only activating 1 Trader per 1000 USDT of investment capital. This allows you to avoid being over-extended. Keep in mind Wealthybot cannot transfer currency to third parties. The trader can only change the balance composition of your account i.e (USD to Cryptocurrency Ratio). Only you can transfer currency from the Exchange account to your own bank account or crypto wallet such as Ledger.
As soon as the link with the crypto exchange has been established, and the trader has also been activated, the trader will begin collecting trading data and will not take a position until this process is complete and the trader has detected a "buy" signal. After a positive trend is identified, the trader issues a purchase order. This order covers approximately 10% of your USDT investment in the exchange (so if your account with the exchange has a balance of 1,000 USDT the trader will in principle trade with pockets of approximately 100 USDT (a "pocket" is a standalone order).
The order is executed by the exchange and the USDT / Crypto ratio of your account is adjusted. The trader remembers this transaction and continuously compares the current exchange rate with the purchase price of the pocket. This has been made visible in the screen: "purchase transactions". By default, the trader works with a minimum return of 2.5%. This means that the trader does not generate a sales order for your pocket if 2.5% return is achieved on it. You can adjust this setting in the settings > traders > screen. As soon as the trader detects a negative trend and the return on a pocket is > 2.5% or whatever amount you set, the trader will send a sales order to the exchange for the number of cryptocurrencies in the pocket and thus secure the profit. At the moment the commission for the trader is also deducted from the credits.
In the Sales transactions screen the sold pocket is displayed and the achieved return is made visible. The results are also made visible in the dashboard. The trader's strength lies mainly in a volatile market. Bitcoin is a volatile currency, making it ideal for trading software like Wealthybot.