Copy trading spreads across decentralized exchanges (DEX), trying to make the best of a highly dynamic market. The speed of trades also makes it necessary to use trading bots, so strategies can be automated.
Following the best traders was one of the main perks of platforms like eToro during previous crypto bull markets. Top traders specifically described their strategies and had great influence. In crypto, copy trading is more informal and has been automated by third parties.
How Copy Trading is Made Easier on the Blockchain
Additionally, since crypto wallets are transparent, addresses are on a watch list to track trading decisions. Traders can easily tap into public wallets or trading personalities, especially those with Ethereum DNS handles, to gather strategies for both existing pairs or newly launched tokens.
Additionally, users can view or aggregate the notable activities of existing exchange bots through a blockchain explorer.
The blockchain activities with lots of data also enable DEX and other services to offer easy-to-use copy trading products.
Which are the Best Decentralized Copy Trading Bots?
Decentralized bots must pick the optimal amount of data while connecting multiple exchanges and wallets. One tool took more than a year to go public.
The GoodCrypto bot aggregates most major markets and offers copy-trading, along with signal-based trading. The Good Crypto has been renewed during the current bull market cycle, offering a new app-based approach.
Tracking Whales and Finding Gem Coins Becomes Go-to DEX Strategy
The mix of public whale wallets and a growing list of new assets means users can build their own copy-trading portfolio. This approach is only partially automated, and will still require personal research. The Dexscreener tool will give a long list of tokens, where those with good volumes and high locked liquidity are the best candidates.
Once a token is discovered, DeBank is the tool to analyze the whale holders of that token. If the whale wallet shows a good track record, its strategies can be copied through the Prodigy Sniping Bot.
The best approach is to only use high-profile bots, and avoid connecting a main wallet if there are doubts about the bot’s origin.
DEX Trading Draws In 100X Seekers
DEX copy-trading has a riskier profile, mostly because its main target is potential 100X tokens. This allows projects to build their products entirely on-chain while automatically singling out the gems. The on-chain approach is even more powerful compared to signal-based trading apps.
Logearn is one of the tools for 100X tokens, along with alerts when a good match is found.
The Logearn service also works to single out active trader wallets with a good track record. Those addresses can be used with other sniping bots.
Smart Money Vs Mass Sniping Wallets
copy-trading tools can have different strategies. For traders on the Solana blockchain, the trend of meme tokens meant some traders did not even bother with pre-selection. Instead, they used automation to snipe all newly minted tokens with small purchases.
Mass sniping is the opposite of doing some preliminary research, or of following the “smart money”. A whale wallet with thousands of tokens may make one good trade to offset the losses, but copying mass sniping holds additional risk. Solana DEX also offer more possibilities for sniping, due to lower fees and more agile asset creation.
AI Assistance Boosts Copy Trades
Analyzing data for thousands of tokens is a task best left to AI. For Solana DEX traders, AI tools also simplify the search for the best-performing whales. TradeWiz is among the preferred tools for Solana-based sniping. The smart money feature means traders can concentrate on copying some of the best wallets for a given period.
Crypto DEX trading is extremely dynamic, and even for the most successful wallets, past performance does not guarantee future earnings.
On-chain tools for copy trading don’t rely on social media influencers and their token preferences. While some traders make accurate calls on social media, there is also overwhelming hype. Using data, copy trading tools, and sniping bots helps avoid over-investing in unpredictable tokens.
Source: https://www.cryptopolitan.com/copy-trading-decentralized-tools-traders/