Gearfuse Technology, Science, Culture & More
Everyone talks about the edge a trading bot can give you as an investor, and how it can help automate the majority of your processes. However, for many, the idea of building one can seem out of reach, especially if there is an existing assumption that you might need some coding knowledge to make it work. This might have been the reality a few years back, without access to the kind of technology we have now. Building a trading bot today as an investor is relatively easier because there are a lot of platforms that allow traders to create no-code AI trading bots in simple steps. In this piece, we’ll be exploring how this works.
What Are AI Trading Bots?
An AI trading bot is a program that uses artificial intelligence and machine learning algorithms to analyze market data, make trading decisions, and execute trades automatically, with little human intervention. This tool has become relatively popular recently, especially due to the newly found relevance of artificial intelligence. Its popularity amongst investors, however, stems from the numerous factors that make it the best smart trading assistant for anyone. The concept of trading bots is not new to market investors, but this model offers several advancements over the traditional trading bots that have been used in the past.
Traditional robots work on fixed, pre-determined rules to execute trades. For instance, “buy when RSI < 30” is a predetermined condition given to a bot to buy an asset when it goes below 30. The tool doesn’t understand the reason behind this rule, or have the capacity to act outside of the set rule. On the other hand, AI robots can analyze not just the RSI but also market sentiment, trading volume, and historical data patterns. If the tool detects that the RSI is low due to a strong negative sentiment across the market (e.g., a regulatory crackdown), it may avoid buying, predicting that prices could fall further. Technically, the key difference between these two is that AI robots have the ability to learn and adjust, which gives them the flexibility to be more functional in terms of complex analysis and adaptability to volatile conditions.
How To Create Your AI Trading Bot
You can create a no-code AI trading assistant by using a platform that enables this functionality or by using an AI language model to generate code that can be used on platforms such as TradingView or MetaTrader.
Using a No-code Platform
You don’t have to be a coder to access the best AI trading robots and tools. Several no-code services, like Signnum or LuxAlgo, allow you to easily create your bot and connect it to a reliable trading app. The first step when using such platforms is to define what services you need your tool to render. To determine this, you need to consider factors such as selecting the market and instrument of interest, strategy, and potentially risk level. These factors are very relevant to having a goal for your AI bot to follow.
Once this is done, you can then link it to your exchange or broker account using API keys. There are several settings you can make to your robot to increase its functionality, like configuring the currency pairs or stocks, indicators, and signals that trigger trades. Make the most of this and try to set rules and risk management precautions to be safe. Lastly, it’s advisable to backtest your robot using a demo to know how well it performs before running it on live trades.
Using AI To Generate Your Code
Many traders are also now using AI tools like Claude Ao or ChatGPT to generate code for trading bots, and you can do the same. The most critical part of this is crafting a prompt, because your results are only as strong as the prompt you give. For instance, if you use the prompt, “Create a TradingView strategy that buys Bitcoin when RSI is below 30 and sells when it’s above 70. Include alerts and backtesting.” The tool can then generate the Pine Script code you can paste directly into TradingView Singapore, and view performance metrics within minutes. From this point, you can add other optimizations, such as stop-loss, take-profit, or necessary indicator parameters. Note that the code to use varies across different platforms, and if you’re working with MetaTrader, you’ll be using MQL instead of PineScript.
Maximizing Automation
AI tools are the best assistants for traders in today’s market, and they can offer numerous advantages when used correctly. However, it’s essential to recognize that these tools are also prone to errors, and you should exercise extreme caution when working with them. To be safe, test run every code using backtesting before going live. Another thing to note is that, although these robots are touted as the best assistants, you shouldn’t leave them to function completely alone. Conduct your regular checks and ensure everything is going as planned.
