How Technology Takes Part in Crypto Trading?

Investing in cryptocurrency is one of the most popular trends nowadays. Many people enjoy buying virtual currencies for significant profits with minimum investments. However, this trend also has its downsides, which are usually related to investment risks and high volatility of crypto assets.

On the other hand, there are investors who do not like to play by the rules and like to take more control over their decisions – technical analysis data can come in handy here. It is worth mentioning that experienced traders rely on various trading tools when they perform market analysis or build their strategy for taking part in crypto trading. Let’s consider how artificial intelligence (AI) technologies can play a crucial role.

1 – AI for Technical Analysis

Technical analysis is a method of performing market analysis via studying trading charts. It should be mentioned that there are many different approaches to this type of analysis, but not all of them are based on mathematical and statistical methods. For example, engineers rely on ‘heuristics’ (rules-of-thumb) when they make their decisions. Therefore, the key idea behind any technical analysis technique is to help investors in making sound investment decisions by using different data sources – including news feeds, price charts, opinion polls, etc.

2 – Using AI Trading Assistant

Although it may seem that crypto trading can hardly be automated due to its high volatility rate and other specific features, today’s traders have access to various AI trading assistants, which can come in handy when it comes to making market predictions. The key idea here is to collect huge amounts of data and use machine learning algorithms to build various predictive models that take into account specific input parameters (i.e., social media mentions or price charts). Besides, there are much more sophisticated types of AI trading assistant, which take part in crypto trading by making independent decisions.

3 – Big Data Analytics for Market Forecasts

Any trader knows that he/she has to carry out cryptocurrency technical analysis every day if they want to achieve success. At the same time, this process can be automated via using big data analytics tools that make accurate forecasts based on different data sources daily or basis. It should be mentioned that AI is actively used for this purpose by collecting vast amounts of data via online sources, which are then processed and analyzed to create various statistical models that can predict future price fluctuations or rate changes.

4 – Data Mining Tools for Market Analysis

There are many different data mining tools available on the market today, but not all of them are suited for parsing specific types of datasets (e.g., cryptocurrency market). At the same time, it should be mentioned that the competition in this sphere is extremely high nowadays since there is a huge demand for effective AI trading assistant solutions among both institutional investors and private traders. On that note, let’s take a look at main types of tools currently available on the market:

• Supervised learning algorithms – these tools are designed to collect and classify data (i.e., learn from it) based on specific input datasets.
• Unsupervised learning algorithms – these tools can automatically detect different data patterns or trends without human assistance.
• Reinforcement learning algorithms – these tools are suited for taking part in crypto trading because they help build effective predictive models by themselves.

5 – Using Statistical Tools for Crypto Trading

It is worth mentioning that there are many different types of statistical tools available on the market today; some of them process simple datasets, while others do this with much more complex ones using neural networks or specialized hardware solutions. At the same time, it should be noted that AI technologies have already made their mark in this sphere by creating various types of statistical tools that can make accurate market forecasts or seamless risk management decisions. In addition, some statistical tools are specifically designed for crypto trading purposes while others can be used more generally.

6 – Technical Analysis Tools

As mentioned above, the competition in this sphere is extremely high due to a huge demand for effective automated AI trading assistant solutions among both institutional investors and private traders. At the same time, there are many different technical analysis tools available on the market today, which have been designed to parse specific types of datasets (i.e., cryptocurrency price charts) based on various input parameters (for example, social media mentions). In addition, it should be noted that most technical analysis use graphical models with complex equations instead of simple ones, which make these tools much more complicated to use.