The End of Crypto Signal Groups
Crypto signal groups were all the rage in 2017. It’s been two years since that time and the magic is fading. Instead of feeling empowered, traders are feeling more and more like they got burned.
It turns out many of these signal groups were more concerned with marketing than actually generating quality signals.
The end is near for crypto signal groups.
After running its course, the whole crypto signal group experiment feels like nothing but a failure.
Thousands of people are left unsatisfied. Instead of being provided a brilliant way to grow their portfolio, users have been left holding bags after signal group leaders have abandoned their followers.
That’s not all though. People getting burned wasn’t the only reason signal groups are going the way of VHS tapes. The reality of the situation is the market has evolved.
With this evolution there has come a new wave of services which are changing the way investors are managing their funds.
But, before we start.
What are Signal Groups?
A signal group is a place where a trader can follow the calls of other experienced traders. When the signal group leader makes a call to either buy or sell an asset, the other members of the group are notified of this call.
The goal of these groups is to leverage the experience of a professional trader to mimic the moves they make when trading. This allows countless people to develop their trading skills, employ more advanced techniques that they may not have considered, and potentially profit from copying these trades.
One issue with signal groups is their manual nature. Many times, group leaders will manually enter trades into a Telegram channel. Thereby announcing the changes to their positions, trades, or analysis of the market.
The result is traders need to rely on manual processes to follow these leaders. By the time they can copy the trade and execute it on the exchange, it may be too late. The market could have moved and the opportunity is no longer available.
This process is cumbersome on both sides. Leaders need to manage both their own funds along with a signal group. Followers need to constantly track the announcements in a Telegram channel to quickly execute trades.
So, what can we do instead?
Social trading is nothing new. Although modern systems provide a complex means to solve this problem, it’s understandably something which has been around as long as trading.
Humans are social creatures which have always looked towards their peers for affirmation. When they are forced with a difficult decision, consulting friends or local experts has always been a way to improve your chances of making a good decision.
The same is true today. While globalization has allowed us to easily connect with everyone around the globe, the fundamental concept is the same. We are looking towards our peers to access expertise and make better decisions.
Most recently, social trading has been popularized by platforms like eToro. This has provided an explosion of traders engaging in social groups online.
Platforms like eToro allow traders to leverage the expertise of the community to improve decision making, portfolio construction, and asset allocation. Each decision being propagated to you in real-time.
Now, this process certainly sounds similar to signal groups. Except everything is automated for you.
Instead of relying on manual processes to trade, allocate your portfolio, and follow the latest market trends, leaders can instantly adjust their portfolio and let your portfolio follow along.
There are two major areas where social trading truly shines.
Copy trading is a precise action where a leader places a trade on an exchange which is thereby copied by all of their followers. Since the trade is copied, this can provide a long list of complexities for volatile markets like cryptocurrency.
As the price of assets fluctuate, it’s difficult to consistently place orders for a group of followers if their volume is significant. There are chances they will move the market, miss the opportunity, or get left behind.
Each missed opportunity racks up the inconsistencies between your portfolio and the portfolio of the leader. Eventually, you can be left in shambles if the trading system is not designed to properly handle missed trade execution opportunities.
Social portfolios are a simplified portfolio management option. While taking inspiration from copy trading, social portfolios are managed through allocation percentages.
Rather than worrying about the precision with each individual trade, social portfolios focus on the precision of maintaining a portfolio in accordance with the percent allocations designated by the leader.
This allows a leader to change allocation percentages at any time and propagate those changes to the followers. These followers will then be able to instantly rebalance their portfolio to match the allocations and strategy of the leader.
Instead of running into issues with order execution, social portfolios concern themselves less with each individual trade - so no follower is left behind.
While there are concerns with market impact when performing copy trading, these concerns are mitigated by social portfolios since the individual trades can differ between traders.
For example, trades can be routed through alternative trading pairs to always perform the best possible execution path as well as reduce the impact on any individual trading pair.
This opens up the possibility for thousands of users to follow the same leader and execute the same strategy without having substantial impact on the market.
How to Get Started
Getting started with Social Portfolios is easy. There’s no complicated software you need to download or time intensive setup. Simply join the rapidly growing Shrimpy community.
Following a leader is as easy as “Activating” them. Selecting to activate a leader will automatically make your portfolio follow the changes dictated by the leader.
No signals or manual processes, the changes will be picked up by your portfolio instantly. When a leader changes their portfolio, so will you. It’s a true masterpiece of convenience.
Social Trading is the Future
Crypto trading is becoming more social. Starting with Shrimpy, there are now intelligent tools which can automate the process of getting signals for your portfolio.
Trading in the cryptocurrency market will continue to get easier as the tools become more sophisticated. Simplifying the portfolio selection process, the way information is shared among crypto users, and automating the management of assets.
Shrimpy is a professional portfolio management application designed for crypto market indexing, rebalancing, and portfolio tracking. Begin automating your portfolio in less than 3 minutes by linking each of your exchange accounts. Shrimpy supports Binance, Bittrex, Kraken, Coinbase Pro, KuCoin, Poloniex, and more!
Shrimpy’s Universal Crypto Exchange APIs are the only unified APIs for crypto exchanges that are specifically designed for application developers. Manage user exchange accounts, execute trading strategies, collect data, and simplify the way you connect to each exchange.
~The Shrimpy Team