Decentralized exchanges (DEX) are embracing copy trading as a way to navigate the fast-paced and ever-changing market. To keep up with the speed of trades, trading bots are being employed to automate strategies.
In previous crypto bull markets, platforms like eToro offered the advantage of following and copying the strategies of top traders. However, in the world of crypto, copy trading has become more informal and is now automated by third parties.
The transparency of crypto wallets allows traders to track trading decisions by keeping an eye on specific addresses. Traders can easily access public wallets and trading personalities, particularly those with Ethereum DNS handles, to gather strategies for both existing pairs and newly launched tokens. Furthermore, users can use a blockchain explorer to view or aggregate the activities of notable exchange bots.
The abundance of data on the blockchain enables DEX and other services to offer user-friendly copy trading products.
When it comes to decentralized copy trading bots, the challenge lies in selecting the optimal amount of data while connecting multiple exchanges and wallets. It can take more than a year for a tool to become available to the public.
GoodCrypto is a bot that aggregates major markets and offers copy trading and signal-based trading. It has been updated during the current bull market cycle, providing a new app-based approach.
Tracking whale wallets and finding promising coins has become a go-to strategy for DEX users. By combining public whale wallets with a growing list of new assets, users can create their own copy trading portfolio. However, this approach still requires some personal research. The Dexscreener tool provides a list of tokens, with those having good volumes and high locked liquidity being the most promising candidates.
Once a token is discovered, DeBank is the tool to analyze the whale holders of that token. If a whale wallet has a good track record, its strategies can be copied using the Prodigy Sniping Bot. It is advisable to only use reputable bots and avoid connecting a main wallet if there are doubts about the bot’s origin.
DEX copy trading carries a higher risk profile, as it mainly focuses on potential 100X tokens. This allows projects to build their products entirely on the blockchain while identifying the most promising options automatically. The on-chain approach is more powerful compared to signal-based trading apps.
Logearn is one of the tools for identifying 100X tokens and provides alerts when a good match is found. The service also helps identify active trader wallets with a good track record, which can be used with other sniping bots.
Copy trading tools can have different strategies. Some traders on the Solana blockchain have opted for mass sniping, where they automate the purchase of newly minted tokens without conducting preliminary research. However, this approach carries additional risk. Solana DEX offers more opportunities for sniping due to lower fees and faster asset creation.
Analyzing data for thousands of tokens is best left to AI. AI tools simplify the search for the best-performing whales for Solana DEX traders. TradeWiz is a popular tool for Solana-based sniping. The smart money feature allows traders to focus on copying the strategies of the best wallets for a given period.
It’s important to note that past performance does not guarantee future earnings, even for the most successful wallets. On-chain tools for copy trading eliminate reliance on social media influencers and their token preferences. While some traders on social media make accurate calls, there is also a lot of hype. Using data, copy trading tools, and sniping bots helps avoid over-investing in unpredictable tokens.
