Automated Cryptocurrency Trading for Beginners
Are you new to crypto trading? In that case, you may find it easier to opt for automated cryptocurrency trading to get your feet wet. The crypto market is highly unpredictable and volatile, and its workings do not conform to standard financial theories and norms. But, with automated trading solutions, you can ensure successful trades without having to stay glued to your computer screen for hours.
How does automated crypto trading work?
In automated crypto trading, beginners will set parameters and the bot will use algorithms for buying or selling cryptos at specific times. Trades get conducted based on technical indicators, strategy, and asset prices. Automated trading is the best option when you have no time to trade cryptos and you are not interested in buying and holding onto the coins. You will find many automated crypto trading platforms, each having its own strategies and features. To use these automated software, you must create an online account on such platforms and choose a strategy for trading.
The most secure type of automated crypto trading happens through bots; the more sophisticated ones have three moving parts, namely, signal generator, risk allocation, and execution. Signal generator is where predictions are made on basis of data that is provided to it; the generator then pops out a buy/sell signal. Risk allocation takes this signal and determines the buying amount; this means deciding whether to place all your money or only a fraction of it to a trade. Execution is when you consider dribbling your order since buying an entire lot at one go will usually not give you a favorable price. Each of these parts requires its own algorithm. If any trading bot disregards or skips through these parts, you cannot expect to make profits.
Should we opt for automated crypto trading?
Bots are very helpful even though there is much debate about whether it is right to use them for crypto trades. The truth is to maximize the true potential of a trading bot, you need to know how best you can use it.
- The biggest advantage of using automated crypto trading is saving time. Since bots are software programmed to execute trades on your behalf, you can conduct trades much faster. Bitcoin Profit is one such legit automated trading bot which helps to yield maximum profits. You can see more details about bitcoin profit here.
- Bots will trade 24×7, thereby saving you from doing repetitive tasks every time you conduct a trade. When you use market indicators, the bot can do your work for you.
- Bots will not make errors like humans; they can work continuously without feeling fatigue. They operate based on specific instructions and trade decisions are never influenced by emotions. So, using a bot eliminates the risks of emotional trading.
- Finally, when you use a trading bot, you can save a lot of time because it will monitor the market for you even while you are asleep.
The only downside of automated crypto trading using bots is that they typically provide marginal returns, even when they work optimally. Many bots are not designed well and you must research thoroughly before using them. As an investor, you must understand that the crypto market is unregulated and to use it well you must have an in-depth understanding of digital currency markets. It is a useful tool for those who are new to crypto trading as it teaches them the tricks of the trade and gives them time to learn the ropes.