As AI advances, we’ve seen many use cases of the blossoming technology, among which AI crypto signals stand out. Still, many people are reluctant to trade AI signals because of the uncertainty surrounding the algorithm behind them.
So, in this article, we’ll explore AI crypto signals, the technology behind them, and how they hold up when compared side to side with manual signals. Without further ado, let’s dive in.
What Are AI Crypto Signals?
An AI crypto signal is artificial intelligence-generated trading information that tells you the best time and price to buy or sell a cryptocurrency, futures, or derivatives. Advanced AI systems with powerful algorithms are responsible for making these kinds of crypto trading signals.
A significant advantage of AI crypto analysis is that it is void of emotional bias, unlike manual signals. So, fear, greed, and overconfidence do not affect their judgment and analysis.
You also have the speed advantage when using AI because they can generate signals as soon as the market shows promise for profit, enabling you to hop on trades faster than you would if you were waiting for a signal provider or making market analysis yourself.
However, AI crypto signals also come with setbacks, some of which we’ll discuss later in this article.
Still, they’re an excellent resource if you’re just starting your crypto journey or an experienced trader looking to save time and diversify your portfolio.
That said, here’s what an AI-powered signal looks like:
How is a Crypto Trading AI Programmed?
Crypto trading AI runs on powerful algorithms programmed by seasoned traders and specialists. They use a type of conditioning or machine learning called reinforcement learning to train these algorithms.
Reinforcement learning works by rewarding an algorithm for providing correct signals from proper market analysis and setting consequences when it produces flawed ones.
This helps the AI learn optimized strategies over time. Let’s take a simplified look into this technology, noting the terms used in this kind of machine learning.
- Agent: The AI is the agent learning to make decisions, which, in this case, is making accurate AI crypto analysis and providing signals.
- Environment: The crypto market is the environment where the agent operates, facing different situations, such as bearish and bullish trends.
- Actions: The agent takes actions, like suggesting to buy or sell a specific cryptocurrency.
- Rewards/Penalties: After each action, the agent gets feedback through rewards (profit) or penalties (loss). This guides the agent to make better decisions.
- Learning: Over time, the agent learns from its past actions and their outcomes, getting better at providing accurate signals by figuring out what works well in different market conditions.
This process is typically repeated continuously until the AI is ready for release.
In addition, various trading strategies, such as fundamental analysis, technical analysis, and on-chain analysis, are used to program the AI. These help the AI better grasp how the market works and understand consumer sentiment, enabling it to provide well-informed signals.
By the way: The crypto price prediction AI uses supervised machine learning and regression.
How to Use AI Signals for Profitable Day Trading
Trading AI signals is simple. First, you want to be sure you’re getting signals for the correct crypto asset or trading pair.
Then, ensure the signals are optimized for the centralized (CEX) or decentralized exchange (DEX) you will trade with.
You can also use a trading bot for faster, unsupervised trading.
If you use a centralized exchange, follow these steps:
- Sign Up: Create an account on the CEX of your choice.
- Verify Identity: Complete the required KYC verification.
- Deposit Funds: Add funds to your exchange account.
- Choose Trading Pair: Select a cryptocurrency pair to trade.
- Place Order: Set buy/sell parameters and confirm the order.
- Monitor Trade: Keep an eye on real-time market data.
- Set Stop-Loss/Take-Profit: Manage risk with predefined levels.
- Curate a HODL/Exit Strategy: Reduce your entry & exit risk to avoid missing out on sudden pumps by leaving a small portion of your tokens exit points (that is, a moon-bag) for certain trades.
- Withdraw Profits: Once successful, withdraw funds to your wallet.
If you prefer to use a decentralized exchange, here are the steps you’ll likely follow:
- Choose DEX: Select a decentralized exchange supporting your preferred cryptocurrencies (e.g., Uniswap).
- Connect Wallet: Link a compatible wallet (e.g., MetaMask) to the DEX.
- Select Trading Pair: Choose the trading pair you wish to engage in or get the contract address of the specific token to trade.
- Place Decentralized Order: Set trade parameters, approve the transaction, and confirm the swap signature sent by the smart contract prompt in your wallet.
- Confirm Transactions: Authorize any other necessary transactions or approvals through your wallet. New tokens often require two signatures: approval and swap.
- Monitor Trades: Keep track of your trades using DEX Screener and price indicators.
- Withdraw: After taking profit from trades, you can either convert to stables and decide to hold in your non-custodial wallet (e.g., Metamask), or decide to move your profits to Binance directly which makes it easier to convert your funds to fiat.
AI Crypto Signals vs. Manual Crypto Signals
As AI advances, the question of whether the trading signals it generates are better than manual crypto signals has been popping up.
We believe that regardless of how well Artificial Intelligence performs, it will not completely replace trading professionals who predict market movements from their analysis and experience. At least not yet.
That said, let’s compare each type of signal.
|AI Crypto Signals
|Manual Crypto Signals
|AI crypto analysis is faster and more efficient than human market analysis.
|Human traders provide signals from a contextual understanding of the crypto market.
|Consistent in its technical approach when providing signals
|Can adapt to random, unexpected news, adjusting strategies in real-time.
|Void of emotional bias caused by greed, fear and overconfidence.
|Utilizes intuition and experience to provide signals tailored to account for the unusual market conditions
|Over reliance on historical data
|Can be affected by traders’ nuances and emotions
|Can take time to adapt to unexpected market events
|Highly dependent on signal provider’s skill level and experience
Best Top 3 AI Crypto Signal Providers
Having tested a couple ourselves, we believe these are the best AI crypto signal providers from our experience and our tests:
- Crypticorn AI Crypto Signals Telegram Bot
- WunderTrading AI Bots
- Zignaly AI Crypto Signals
1. Crypticorn’s AI Telegram Signal Bot
At the top of our list is Crypticorn’s AI Crypto Signal Bots, which excels among crypto signal providers, employing high-quality market data and an advanced algorithm for accurate predictions.
It offers free 24/7 trading signals for major platforms like Binance, Kucoin, and ByBit, among several others. Crypticorn’s AI also comes with the complete signal package, providing you with precise entry points, stop losses, take profit, and leverage levels among others.
Furthermore, you can customize the risk levels for each bot and still be sure of maximum performance with minimal loss as it adapts to market events.
With a 93.5% success rate, Crypticorn’s AI signal bots are a comprehensive solution that optimizes profits, making it a standout choice if you’re seeking quality and precision in the volatile crypto market.
2. WunderTrading AI Bots
WunderTrading AI bots are second on our list. These bots utilize a smart algorithm to scan the market for profitable trading points, enabling you to make profitable trades from proper analysis.
WunderTrading also offers several bots that provide signals for popular exchanges. However, we noticed that its bots find it hard to adapt to peculiar situations and sudden news.
Still, with pricing plans starting from about $4/month (although with limited features), it’s a good option.
Zignaly is a crypto signal trading bot that provides crypto signals and offers an automated trading option. Although it is well-optimized for copy trading, it doesn’t support many exchange platforms.
However, it’s a great bot to use if you’re looking for one with a simple user interface.
AI crypto signals are undoubtedly beneficial because they are fast and offer consistent, round-the-clock analysis you can rely on. They are generated by artificial intelligence with incredible algorithms that perform pro-level technical analysis, like Crypticorn’s AI.
However, trading AI signals has cons and risks you should consider. Still, they are an excellent option if you have just started crypto trading or want to automate and diversify your trading portfolio.
Make sure only to trade crypto assets you’re comfortable with losing, as crypto market conditions can be unpredictable sometimes. Always consider setting relatively safe stop loss levels before engaging a set-up. While you may make a lot of profits using its product, Crypticorn is not liable for any financial losses you incur when trading.
Can AI give trading signals?
Yes, AI can give trading signals. These AI tools use the latest technology to analyze the crypto market and provide accurate signals.
Are paid AI crypto signals worth it?
Yes, paid AI crypto signals are worth investing in as they offer many more features than free offerings. Still, you have to research which ones offer the best value for money.
How to get free crypto signals?
You can get free crypto signals from various sources, including telegram channels, discord channels, and AI signal trading bots. However, these channels are very limited in terms of signal info. Regardless, they are a good start for trading newbies.