Earn Passive Income with an Ethereum Bot
1. INTRODUCTION
Just like Bitcoin, Ethereum is an essential part of the cryptocurrency world. With a market cap of over $350 billion, it has held the second position behind BTC for years. If you believe in the long-term potential of Ethereum, you might be looking for a way to passively earn more ETH regardless of market conditions. In that case, check out the Ethereum trading bot solution from Oxido Solutions. Discover everything about our Ethereum bot software in this LinkedIn article. To make your journey as smooth as possible, we’ve divided the content into the following 5 sub-topics:
✓ ABOUT US
✓ DEFINITION
✓ FEATURES
✓ PROS & CONS
✓ SERVICES
Oxido Solutions is an IT company based in Amsterdam that specializes in crypto trading bot solutions. Founded in 2020 by Jarno de Vries and Guido Lassally, the company has quickly made a name for itself in the crypto world. Jarno, the technical mastermind behind Oxido Solutions, designed and developed both the Ethereum and Bitcoin bots, along with the necessary infrastructure. His motivation? As an avid crypto trader, Jarno often spent sleepless nights manually trading, which was stressful. The birth of his daughter pushed him to seek a more sustainable approach, leading to his focus on trading bots for passive income. After developing a series of profitable crypto trading bots, Jarno teamed up with Guido to launch Oxido Solutions. Today, our clients include high-net-worth individuals, family offices, and hedge funds.
3. WHAT IS ETHEREUM?
Ethereum was founded in 2013 by Vitalik Buterin, a programmer and cryptocurrency researcher with a vision to create a blockchain platform for more than just cryptocurrency transactions. He was joined by co-founders Gavin Wood, Joseph Lubin, Anthony Di Iorio, Mihai Alisie, Amir Chetrit, and Charles Hoskinson, who helped develop and launch the project. Buterin’s vision has come to fruition as Ethereum is now extensively traded and serves as a foundation for decentralized applications (dApps), smart contracts, and various blockchain innovations.
Ethereum has significantly grown over the years, becoming the backbone of decentralized finance (DeFi) and non-fungible tokens (NFTs), which enable new financial products and digital assets. Some notable projects include Uniswap, MakerDAO, and Decentraland. Uniswap is a leading decentralized exchange (DEX) that allows users to swap various cryptocurrencies without relying on a centralized authority. MakerDAO supports the creation of the DAI stablecoin, which is pegged to the US dollar. Decentraland is a virtual world where users can buy, sell, and build on virtual land parcels.
Ethereum 2.0 is an upgrade designed to improve how Ethereum works. The goal is to make Ethereum faster, more secure, and better for the environment by switching from Proof of Work to Proof of Stake. In the current Proof of Work system, miners solve complex math problems to approve transactions and add them to the blockchain, which uses a lot of energy and computing power, making it less sustainable and harder to scale. Proof of Stake, however, selects validators based on how many coins they own and are willing to lock up as collateral. This method uses less energy and computing power, making it more sustainable, scalable, and secure due to economic incentives.
4. WHAT IS AN ETHEREUM TRADING BOT?
An Ethereum trading bot is a computer program that follows preset rules to assist you in automating trade execution for Ethereum trading pairs. It is designed to find and act on buying and selling opportunities based on these rules and communicate with other systems. A well-built Ethereum bot can help you grow your capital and reduce risks. To find the right Ethereum trading bot, you need to understand its key components. At Oxido Solutions, we think these components are:
4.1. Exchanges
Almost all cryptocurrency exchanges offer the ability to trade Ethereum. Some of the most popular exchanges for trading Ethereum include Binance, Ethereum, and OKX. These platforms provide a variety of ETH trading pairs.
There is often a distinction made between ETH spot trading pairs and ETH perpetual futures trading pairs.
ETH Spot Trading Pairs:
In spot trading, you are buying and selling Ethereum for immediate settlement. This means that the trade is settled “on the spot,” with the actual transfer of Ethereum and the corresponding cryptocurrency or fiat happening right away. Spot trading pairs include:
– ETH/USDT (Ethereum/Tether)
– ETH/BTC (Ethereum/Bitcoin)
– ETH/EUR (Ethereum/Euro)
– ETH/BNB (Ethereum/BNB Coin)
ETH Perpetual Futures Trading Pairs:
In perpetual futures trading, you are trading contracts that track the price of Ethereum, without owning the underlying asset. This instrument allows you to earn more fiat, ETH, and even BTC based on the volatility of Ethereum.These contracts have no expiration date, unlike traditional futures contracts, allowing traders to hold positions indefinitely. Perpetual futures trading pairs include:
– ETHUSDTPERP (Ethereum/Tether Perpetual)
– ETHUSDTPERP (Ethereum/US Dollar Perpetual)
– ETHBTC (Ethereum/Bitcoin Perpetual)
These pairs allow traders to speculate on the future price of Ethereum, using leverage to potentially amplify gains (or losses). Perpetual futures trading is typically more complex and involves higher risk compared to spot trading.
4.2. Approach
You can make an Ethereum trading bot in a few different ways, such as using technical analysis, fundamental analysis, or a combination of both, depending on the strategy that matches your trading philosophy.
4.3. Data
An Ethereum bot uses trading data to examine and identify possible trading opportunities for ETH. This data includes market conditions, past trends, and other relevant factors.
4.4. Technology
Your investment goals determine the technical setup of your Ethereum bot, which involves choosing programming languages, backtesting tools, and middleware to make sure it meets your specific needs.
5. OUR ETHEREUM TRADING BOT PHILOSOPHY
As experts in crypto bot technology, Oxido Solutions knows all the standard trading methods. Through a lot of testing and practical use over the years, we’ve combined these insights with our creativity to make a unique trading vision. This vision is the basis of our Ethereum trading bot, guided by four main principles:
✓ MARKETS ARE CYCLICAL
✓ RISK MANAGEMENT IS PRIORITY ONE
✓ NO MANUAL TRADING
✓ THE TREND IS YOUR FRIEND
5.1 Markets are cyclical
At Oxido Solutions, we understand that markets move in cycles—a key part of our trading philosophy. Each cycle has its own challenges and opportunities. We think the best Ethereum trading setup should handle all kinds of market cycles and their related price actions, such as:
BULL MARKET: This market has rising prices, high confidence, and optimism in this upward trend.
BEAR MARKET: This market has falling prices and pessimism, and needs caution and strategic planning.
SIDEWAYS MARKET: The market changes within a range, without a clear direction, and needs careful analysis.
5.2. Risk management is priority one
We think risk management should be the heart of every Ethereum trading strategy. It means finding possible risks, measuring their chance and impact, and taking steps to reduce them. Here’s why risk management is important:
AVOIDING BIG LOSSES: Like a car’s safety features, risk management in Ethereum bots is vital. Not setting a trade loss limit is like driving without seatbelts, risking big financial damage. Setting limits on trade losses is key for saving investments.
HELPS YOU STAY IN THE GAME: Good risk management can improve the risk-reward ratio of your trading strategy. It’s about controlling how much you risk on each trade to avoid losing your capital through a few bad trades.
MAKING SMARTER DECISIONS: Keeping calm is important for trading on Ethereum. With set rules for acceptable losses, you can make smart, logical decisions instead of acting out of fear or greed, which can ruin your trading strategy.
5.3 No Manual trading
At Oxido Solutions, we strongly believe in the betterness of automated trading methods over manual ones for success in Ethereum bot trading. Most of the trades are now done by bots, which are improved with advanced technologies like AI. This move towards automation means manual traders of Ethereum trading pairs face more problems. Main reasons for our focus on automation are:
ACCURACY: Manual trading of ETH pairs, especially at medium or high speeds, is hard because of the human limit in processing data fast. Automated bots can process a lot of data quickly and do more accurate trades. They work all the time, changing to market changes right away, something hard for manual traders.
CONSISTENCY: Trading can be emotional, with fear and greed often causing different results. Automated trading removes these emotional biases, making sure trades follow a set, logical strategy. This discipline helps get long-term profits and avoid big losses.
ADAPTATION: Manual traders may have trouble adapting to new market conditions, while automated systems are good at this. They can look at market data in real-time, making smart decisions fast. This speed lets our Ethereum trading bots use new opportunities right away, staying ahead in the changing market.
5.4 The trend is your friend
At Oxido Solutions, we aim to take advantage of inefficiencies in the crypto market, following the philosophy that ‘the trend is your friend’. This strategy means that matching trading actions with the current market trend usually leads to better results than opposing it. This approach is based on the fact that market trends tend to last for a relatively long time, driven by momentum and investor behavior. So, using these trends is usually less risky and more simple than trying to speculate on when they will change. Other reasons for our trend-focused trading bot software are:
VIABILITY: Markets are naturally cyclical and affected by trends. While the causes for new trends may change, there are always chances for trend-following traders as long as price movement exists.
TWO-WAY GAINS: A trend-following strategy, specially designed for derivatives, allows for trading in both rising and falling markets, making profits from both upward and downward trends.
VOLATILE-FRIENDLY: A trend-following method is very effective in active markets like the cryptocurrency market, where trends can be seen even during periods of high volatility.
6. FEATURES OF OXIDO’S ETHEREUM BOT
You already know what a Ethereum bot is, how the platform has grown into a major trading platform, and our vision for trading on Ethereum. In this chapter, you’ll find out how we’ve turned that vision into a working product, our own Ethereum trading bot, and its main features.
6.1. Our Ethereum Trading Strategy
Oxido Solutions is providing an automated trading strategy focused on risk management, tailored for professional and institutional investors. Our approach uses a trend-following scalping strategy designed for Ethereum Perpetual Futures. This means our trades follow the current market trend but only for a brief period to capitalize on minor Ethereum price fluctuations. This flexibility allows our clients to maximize returns across various market conditions with their chosen collateral—EUR, USD, USD Tether, ETH or BTC. We execute this strategy on top-tier cryptocurrency platforms like Binance, Bybit and OKX.
6.2. Risk Levels
Our Ethereum trading bot offers three risk levels: low, medium, and high, matching risk exposures of 2%, 3%, and 4% of the trading capital per trade, respectively. It’s important to note that these calculations do not include slippage, which is the difference between the expected price of a trade and the price at which it is actually done. The low-risk level aims for smaller profits but also has smaller losses, providing a more careful approach to bot trading.
6.3. Isolated Margin
Oxido Solutions’ Ethereum trading bot supports isolated margin, a useful feature that helps in managing the risk of each individual trade. It’s like setting aside a specific amount of money for different expenses. With isolated margin, you set a certain amount of funds for each trade and use only those funds for that trade. This makes sure that a bad trade won’t affect your other trades, giving you more control over your risk management.
6.4. Sideways Filter
One of the biggest challenges with trend-following trading bot strategies is their poor performance during weak trends. Oxido Solutions has introduced a solution with its sideways filter. This technical indicator spots sideways price movements early on. As a result, our trading system avoids trades during weak trends and only engages when there’s a strong trend, lowering losses and increasing profits.
6.5. Double Stop Loss
Our double trailing stop loss is a key part of our risk management strategy. Here’s what makes it special:
PRIMARY TRAILING STOP LOSS: This turns on right away when a position is opened. It’s set at a big distance from the entry point and changes with price movements. The distance is based on market conditions and the size of the position, considering the user’s risk profile. This means at the start of the trade, no more than 2% (low risk), 3% (medium risk), or 4% (high risk), not counting slippage, is risked through the primary trailing stop loss.
SECONDARY TRAILING STOP LOSS: This turns on only when the position is in profit. It starts if the price moves a little in the desired direction. From there, a trailing stop loss is used, moving up with the price and closing the position if it falls a little. Positions are mainly closed using limit orders to avoid slippage and extra fees, with market orders as a backup if the limit order isn’t filed.
6.6. Alpha Shifter
To make sure buy and sell signals from an Ethereum trading bot get to the exchanges fast and accurately, middleware software is crucial. Middleware acts as a bridge for sharing data between different systems or applications, playing a key role in the operation of an Ethereum trading bot. At Oxido Solutions, we saw that the current middleware options didn’t fit our specific needs. So, we made Alpha Shifter, our own advanced middleware trading system that efficiently sends ETH trading signals to Binance, Bybit and other major crypto trading platforms.
7. ETHEREUM BOT RISKS & SOLUTIONS
At Oxido Solutions, we’ve faced many challenges in launching our Ethereum trading bot services. It’s important to understand the potential risks and our solutions. These include – but are not limited to – IT risks, market risks, and regulatory risks.
7.1. IT Risk
Developing and running a trading bot involves technical aspects that could cause IT-related issues, such as wrong or missing input, coding errors, or server outages. These problems can stop the generation of accurate buy and sell signals, leading to possible financial losses.
To reduce IT risks, Oxido Solutions has built a strong IT infrastructure. Every component goes through thorough testing and regular software and hardware updates to ensure their reliability. Our error management system quickly detects and fixes any errors, minimizing their effect.
7.2. Market Risk
The success of your Ethereum trading bot depends on market conditions and the bot’s ability to adapt. Market risks can come from volatility, economic changes, or unexpected events. We can’t control market conditions, but our Ethereum trading bot has advanced risk management features to adapt to changes. These features limit losses per trade, use dynamic stop-loss mechanisms, and have a chop filter to avoid trading in bad conditions. Our goal is to lower setbacks from unexpected market events.
7.3. Regulatory Risk
Using an Ethereum trading bot also involves dealing with regulatory risks from financial market laws and regulations, which could restrict access to services or require specific licenses. Oxido Solutions stays updated on regulatory changes by keeping open lines of communication with the Ethereum community, exchanges, and regulators worldwide. We modify our services to follow regulations and can link you with experts for advice on any regional restrictions or licensing requirements. While we don’t give financial advice, we’re here to help with any IT-related questions.
8. ADVANTAGES ETHEREUM BOT
When you use Oxido Solutions’ Ethereum trading bot, you’ll join a competitive field with thousands of other bots in the cryptocurrency market. So, what benefits does our Ethereum bot have over other investment options? Let’s look at the 6 main advantages.
8.1. Passive Income
The Ethereum trading bot can help you create a passive income stream by automatically finding ETH trading opportunities based on set rules and strategies.
8.2. Less Stress
Our Ethereum bot gives traders a way to skip the emotional stress of manual trading in unstable markets, while still having the chance to make profits from the cryptocurrency market.
8.3. Save Time
With the Ethereum trading bot, you can work on other things or activities while it runs in the background, possibly making profits from the cryptocurrency market without needing your constant focus.
8.4. Save Costs
Our Ethereum trading bot can find buy and sell opportunities with lower transaction costs than manual trading, thanks to its quick data processing skills.
8.5. More Efficient
The Ethereum Bot can run non-stop, letting you take advantage of market opportunities and possibly make profits even when you’re not at your computer. This leads to more effective and productive trading.
8.6. Diversification
An Ethereum trading bot can help you diversify your investments by finding trading opportunities for multiple cryptocurrencies and trading pairs at the same time.
9. SERVICES
You’ve just learned a lot about the Ethereum bot. Hopefully the article has given you a lot of handles for further research or maybe you are fully convinced of the power of Ethereum and the trading bot that we have developed for this crytoccurrency. In any case, you are not a guinea pig. Numerous institutional investors and high net worth individuals benefit daily from our risk-focused trading bot and if you want to verify the track record, we can give you access to our data room and special read-only api keys.
Are you curious to try it out? We have different services and products for the Ethereum trading bot, customized for you based on your investor profile, background, and location.
Disclaimer: The opinion expressed in this LinkedIn article is for general informational purposes only and is not intended to provide specific advice or recommendations for any individual or on any specific security or investment product.
