Cryptocurrency trading can be very profitable and depending on the skills and starting capital of the individual, some traders can make thousands of dollars in a day! So, it’s not surprising that more and more people are interested in giving it a try, but some of the traders have found more success than others. Their secret? Many of them use automated trading tools to help them succeed.
In this article, we’ll discuss what automated trading software is and how it can help you make better trading decisions.
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What is an Automated Trading Software
Trading is complicated. The skills required to find the right asset and properly timing the market takes years, sometimes decades, to master. So, for noob traders who want to get started right away or experienced traders who are looking to make themselves more profitable (or spend less time on the charts), the only real option is to use the software.
For example, ProfitFarmers have automated cryptocurrency trading by providing expert trading signals that can be copied into the Binance exchange with a few clicks and then left on auto-pilot. How does automated software work in practice?
Step 1: Connect the software with an exchange
Most cryptocurrency trading happens on exchanges. These are like marketplaces where traders buy and sell crypto to make some money.
Some of these exchanges have a feature that lets you create API keys that allow you to connect third-party software to an exchange.
After linking the exchange with the software, you’re ready to get started.
Step 2: Choose an asset pair and type in the values
When it comes to cryptocurrency, there are hundreds of asset pairs to choose from. The number of coins you can trade with largely depends on what’s available on the exchange of your choice.
As mentioned, some automated trading tools offer suggestions for promising trades. You can choose to go along with these suggestions or trade on your own if you think you are a genius.
Step 3: Confirm the order and wait for the result
Once traders decide on a position, they send their trade orders to the appropriate exchange. Trade orders refer to different types of actions or triggers that can be placed on exchanges. The most common ones are the market, limit, and stop-loss orders.
If you’re trading manually, then you’ll have to fill out these orders one by one which can get confusing for newcomers. Not only that but you need to keep an eye on the charts to see if things are going well or not.
If you are using an automated tool all of this hassle should be done for you. All you have to do is type in the number of coins you want to purchase, confirm the order, and the software will execute the trades for you.
5 Benefits of Using Automated Trading Software
Most traders agree that newcomers shouldn’t dive into trading without getting assistance from an experienced mentor or reliable trading software. This way, novices can avoid committing some of the most common trading mistakes.
Find the best opportunities instantly
Finding good trading opportunities is not easy. You’ll need to do some technical analysis and extensive research beforehand. For beginners, this process can take hours to finish, and, after all your hard work, you still aren’t guaranteed any profits. So, if you want to skip this tedious process, then it would be best to look for software that offers trading signals.
Trading signals are like a set of instructions from a professional trader who’s had years of experience dealing with the cryptocurrency market. It will show you exactly what coins to trade, when to buy and when to sell them so that you’ll get the best results. So, there’s no need for you to spend countless hours trying to figure out the market.
Be wary though, you get what you pay for. Avoid free or cheap signals offers as the people behind them will be making money in ways that are less than transparent.
Prevent your emotions from interfering with your trades
Both rookie and veteran traders aren’t immune to emotionally-driven decisions. Many traders tend to make risky trades once they become more and more confident in their skills. This could lead them to take positions that can cause them to lose most of their profits. This is a big reason why many traders don’t last long in the industry.
Using automated trading software essentially removes the emotions out of your trades. You won’t be tempted to change your positions once you’ve confirmed your order. That way, you avoid taking unnecessary risks.
No need to micromanage your trades
Many serious traders spend a lot of sleepless nights and more than a few missed meals just to find good trading opportunities. Once they decide on a position, they’ll have to monitor it for a few hours to make sure that their trades are going smoothly.
However, the lack of sleep coupled with other stresses can cause some to make terrible trading decisions. As a result, some of them end up losing a huge portion of their capital and are unable to bounce back. If you want to avoid these kinds of frustrations, then it would be best to use third-party software that would execute the trades for you.
This way, you wouldn’t have to worry about getting in and out of a position at precisely the right time.
Faster execution of trade orders at the right prices
People who trade manually have to sell their assets at the right time to maximize profits. However, factors such as connectivity, lag, and other issues can cause some traders to miss out on the timing and as a result, they might not be able to maximize their profits.
Not only that but if you are under pressure, it’s not unheard of to click the wrong button and totally mess up your trade!
An automated trading tool solves this by sending out the orders the moment the price hits the amount set. Since it’s handled by a precise computing system, it won’t miss the price point you’ve set.
This way, you’ll be able to make the most out of every trading opportunity and avoid any human error.
To the untrained eye, cryptocurrency trading looks like a complicated web filled with numbers and charts. It is intimidating especially for newer traders since they might find it hard to understand the interactions involved with a trade.
Fortunately, some automated crypto trading software has simplified this by getting rid of the charts and graphs and replacing them with easy-to-read dashboards. Some platforms present this information using price action scanners, relative strength index, and technical analysis tools. These can help new and veteran traders find price trends and trading opportunities without them needing to spend hours flipping through charts.
Cryptocurrency trading is a very rewarding career path but if you don’t have something to guide you through your journey, then you will most likely have a terrible experience. Having an automated crypto trading system will help you make smarter decisions and make the initial part of your journey much easier.