TradingView is the platform of choice for millions of active investors around the globe. It is a multifunctional feature-rich terminal offering a wide spectrum of analytical tools, user-friendly coding, and integrations with dozens of different online services. One of the primary uses of this platform is for signal generation.
Many traders engage in TradingView automated trading which is a method of botting where you derive signals from the scripting language used by the TradingView platform. The PineScript programming language employed by the terminal is a great instrument for simplistic coding and easy integrations with scripts run by automation providers.
We will use WunderTrading as the main example of how such services can be used to automate various strategies on this terminal.
Automated trading with TradingView
Technical analysis is the main method of forecasting prices in the crypto domain. The variety and a sheer number of different, completely unrelated assets that can be traded make it nearly impossible to use traditional methods of fundamental analysis. Technical indicators are the only reliable way to analyze any asset.
TradingView automation is the answer to the chaos of the crypto market. The terminal has a multitude of time-tested tools including famous indicators like Moving Averages, Stochastic, MACD, RSI, and more. You can use strategies based on any combination of these tools that can help greatly with understanding trends and predicting reversals.
These indicators can generate alerts which are special triggers for bots. When an alert is sent to a bot, it will refer to the script, find relevant instructions, and immediately start placing orders according to its settings. A typical crypto trading bot for TradingView is a specialized program that communicates with two APIs:
- TradingView’s API sends out alerts or inputs for bots.
- Exchange’s API receives commands from bots and creates orders instantly.
You can turn any strategy created on the TradingView terminal to create a fully automated trading system that will rely on repeating market patterns and operate even during nights and weekends. Humans have to rest at least 8 hours per day meaning that you will lose over 30% of the active time due to just your physiological need to sleep. Bots, on the other hand, do not require any leisure time.
How to automate a TradingView strategy?
First, you will need to come up with a reliable strategy. One of the simplest technical indicators to use is RSI (Relative Strength Index) which is a great tool to measure the momentum of prices and determine likely reversals. There are two basic rules to using it:
- When RSI reaches 70 or more, it means that there is a strong possibility that the trend will soon become bearish.
- When RSI reaches 30 or lower, it indicates that the market will soon become bullish.
RSI alone is not able to make correct predictions all the time, but it is more than enough for our example. RSI will be sending alerts to our bot that we will create on the WunderTrading platform. The whole procedure has only a handful of phases::
- Go to the main page of the WunderTrading platform and register a new account. You don’t have to pay. Use the free account that can run up to 5 bots simultaneously.
- Connect your exchange account. The platform is integrated with a large number of trading platforms including Binance, CoinBase, FTX, and more.
- Create a new Bot and start configuring the settings. Add the webhook from TradingView’s alert manager to the bot settings.
- Start your newly created TradingView bot trading strategy or launch back-testing to check whether it works.
To create alerts, you will need to open the Pine Editor and turn signals from RSI into alerts. You can read more on the WunderTrading page of a TradingView bot for free. Use their tips to quickly edit the code.
It is important to use correct PineScipt commands. They are very simple and won’t create any challenges for experienced users. If you are not a tech-savvy person, please watch detailed video tutorials on WunderTrading’s website. These videos talk in detail about how to automate a strategy that you create on TradingView.
Does automated trading work?
The efficiency of any bot depends on the quality of the strategy that you use. Using very simple methods like RSI + Moving Averages can be quite fruitful for day traders, but you still need complex alerts based on signals from multiple indicators. Understanding the limitations of technical analysis and utilizing effective combinations of various graphical and analytical tools is quite important to come up with a strategy that can reliably bring profits.
Trading bots that work are bots that follow instructions from a dedicated trader who spent time and effort testing multiple strategies. Many bots are not profitable, precisely because their creators never tried to create a truly efficient strategy.