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A trader is a software program that administers and manages your account at an exchange. Based on parameters you set, the trader automatically determines the ideal buy and sell moments for cryptocurrencies, without you having to continuously monitor the price yourself.

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The theory behind the trader

The trader operates according to the so-called MACD method: Moving Average Convergence Divergence. This is a momentum indicator that calculates the direction and strength of a price trend using multiple moving averages. The MACD indicator consists of two lines:

MACD line

Calculated by subtracting the moving average of the past 26 days from the average of the past 12 days. This line indicates the direction of the trend: rising = positive trend, falling = negative trend.

Signal line

The exponentially measured average of the past 9 days. Together with the MACD line, this forms the complete MACD indicator.

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Buy and sell signals

Not only the direction of the lines gives a signal, but also the moment when the lines cross each other:
  • Buy signal: the MACD line (blue line) crosses the signal line (red line) upward → upward price trend begins.
  • Sell signal: the MACD line crosses the signal line downward → price trend switches from rising to falling.
  • Trend strength: the greater the distance between the two lines, the stronger the prevailing trend.
The MACD is a trend-following system. It works best in a volatile market where clear upward and downward movements alternate, exactly the environment in which Bitcoin and many other cryptocurrencies score well.

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How the trader works in practice

Once you have an account at a supported exchange and have deposited a balance, you connect the trader to the exchange through an API connection.

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What is an API connection?

Imagine a lamp and a power strip: if the plug fits, the lamp turns on and both objects exchange electricity. In exactly the same way, an API (Application Programming Interface) works: it exchanges data between two software systems. Through the API connection, the trader can communicate with your exchange account and place orders.
The trader can never transfer currency to third parties. The trader only manages the composition of your exchange account (for example the ratio Bitcoin/Euro). You always withdraw money to your own bank account or crypto wallet yourself, directly on the exchange.

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From signal to transaction

1

Trader collects trading data

Once the connection and activation are ready, the trader starts continuously collecting price data and calculating the MACD indicator.
2

Buy signal → buy order

On a positive price trend, the trader places a buy order sized at 18% of your available euro balance on the exchange, with a minimum of € 25. Example: with a balance of € 1,000, the first position is € 180.
3

Monitor the position

The trader remembers every transaction and continuously compares the current price with the purchase price. The current return is visible in the Buy transactions screen.
4

Sell signal → sell order

As soon as the trader signals a negative price trend and the return on a position is higher than the minimum percentage you set, it sends a sell order to the exchange. The profit is secured in euros and the commission for BitBrokerTrade is deducted from your credits balance.
5

Result visible

The sold position appears in Sell transactions with the return achieved. The total overview can be found on the Dashboard.

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The strength of the trader

The trader performs best in a volatile market. Bitcoin and many altcoins regularly show strong price movements up and down, exactly the situations in which the MACD method proves its value. In a stable, sideways market with little movement, the trader generates fewer transactions.

Want to know more about settings?

Learn how to add a trader and set all parameters optimally.

Which strategy suits you?

Compare the BitBrokerTrade MACD strategy with the Updown strategy.