Today there are plenty of amazing tools and software that improve trading performance. Third-party developers provide very useful services such as risk management, trading analysis, bots, portfolio rebalancing, and others. To use them you need to grant a third-party program/software certain technical permissions via an API key (Bitinsure is one of them).
This API (application programming interface) key is a way various applications interact with each other. Thus, if you are a trader that uses trading software, the API key allows an app to access your exchange account without you giving out your password. Read here how to create API keys on different exchanges.
However, a reasonable question arises: Should I trust these platforms with my API keys? How dangerous is this access?
To answer these questions and feel confident and safe while using your API, it’s essential to break down API key types with different levels of access they grant. Generally, there are 3 types of API keys that you can configure in your exchanges account settings.
1. “Read-Only” / “View Only” access
This access type allows the software to connect to the exchange API with two basic functions – read or, in other words, view the transaction data at your exchange account.
Usually, “read-only” access is used with portfolio trackers, trading analytics or crypto tax software that require access to your transaction history. In this case, the services you grant access to are NOT able to trade on your behalf or withdraw your money. Therefore, “read-only” permission is considered to be totally safe.
2. “Trade” access
If you create an API key with “trade” access, you allow the connected application to make trades at your account from the part of yours. Note that transfers and withdrawals are NOT enabled with “trade” access.
In the majority of cases, crypto trading bots require this type of access. Therefore, make sure you can completely trust the company and the software you are going to use before you grant it access. Ensure your API keys are kept safely!
3. “Transfer” (full) Access
Transfer access makes it possible for connected service to read your data, trade and also execute transfers and withdrawals on your behalf. Thus, granting this type of access to the third party you agree that it has full access to your account.
This is the riskiest access type that implies that a service could potentially send your funds to a third party wallet address or withdraw your money without your approval. That is why it is usually not recommended to enable such access type.
So, now you are aware of different access levels for API keys and able to choose an appropriate type for your software, feeling confident about your funds. By the way, Bitinsure will help you in securing funds and growing the deposit! Get a guide on how to connect your exchange account to Bitinsure via API key and find some facts about risk management power in the following articles:
- Trading insight: Why 95% of traders lose?
- Maths holy grail: How to stay in-game with 100 losses in a row?
Improve your trading with smart software and be sure you are safe!
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