Auto Trading Bot: Simplifying Crypto Investments

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The finance industry at large can appear more complex than it truly is to those on the outside. While there’s numerous industries that fall under the finance industry’s umbrella, cryptocurrency, and more specifically auto trading bots, is a topic that also appears more intricate than it is.

With a little bit of curiosity and research, the bountiful benefits auto trading bots provide to cryptocurrency users will become clear; so, we’ve simplified the educational process for you!

Traditional Finance Trading vs. Cryptocurrency Trading
The concept of cryptocurrency investing is as it is for the traditional world of finance regarding strategies for buying, holding, and investing in assets.

Another area where these two sectors overlap is in the industry tools they offer. For decades large players in the traditional finance world have used advanced tools such as auto trading bots. Those same tools entered the cryptocurrency sector as well over the past few years; however, many believe they have done it better, and even simplified the process.

For one, the barrier to entry (both educational and financial) is much higher in the traditional finance world for auto trading bots. Often, financial advisors, hedge fund managers, and professionals alike “gatekeep” these resources.
With automated crypto trading, the power is truly in the individual’s hand.

Transparent Industry
There’s no guessing about what’s going on in the industry; what the latest trends, tools, and or next best strategy is. Information is not gate-kept by financial professionals, it’s all out there available for you to learn.

Even trusted strategies such as the dollar cost average method have been simplified and made available for the masses through. DCA bots are a great entry point to cryptocurrency trading for everyone, especially new investors.

The industry shares a growth mindset which has allowed for a  larger focus to be placed on customer support, satisfaction, and overall customer success by platforms. 

A Solid Foundation to Build On
The cryptocurrency trading sector is undoubtedly a vast one consisting of many moving pieces that can appear more complex than it is to less experienced investors.

However, first things first, build a solid foundation of understanding such as the different types of bots.

The two primary bots are –

– Custom Bots: These are trading bots that are built from scratch, and tailored to the specific needs and strategies of the trader. They require a deep understanding of both trading strategies and programming.
These are highly customizable allowing for one to create unique trading strategies, and they have the potential for better performance if well-coded.

And;

– Pre-built Bots: These are off-the-shelf solutions that come with predefined strategies and settings. They are usually designed for a broader audience. However, even some pre-built bots can be highly customized depending on the platform provider.
Pre-built bots are user-friendly for those without coding knowledge, have faster setup and deployment, and often come with community support and regular updates.

Proactive not Reactive
One ingredient to becoming a successful trader is being proactive as much as possible; you can do this by;

Staying Updated: The crypto market is dynamic. Regularly update your bot’s algorithms to adapt to market changes.

Diversify Strategies: Don’t rely on a single strategy. Implement multiple strategies to hedge against potential losses.

Monitor Market News: Integrate news APIs. Sudden market changes often follow major news events, and your bot can be programmed to react accordingly.

Limit Orders Over Market Orders: Using limit orders can help in getting the desired purchase price and avoiding slippage.

When to take control
Unforeseen Market Events: In cases of black swan events or sudden market crashes, it might be wise to intervene and halt the bot.

Technical Glitches: If you notice any technical issues or discrepancies in the bot’s performance, pause its operations and troubleshoot.

Strategy Overhaul: If you believe that the market conditions have changed to the extent that your current strategy is obsolete, it’s time to intervene.

Regular Check-ins: Even if the bot operates 24/7, regularly check its performance, logs, and any alerts or notifications it might generate.

High Volatility: During times of higher market volatility, manual intervention can help in making more informed decisions.

Keeping it Simple
Anything new comes with its challenges, is the same. However, the key is to take it step by step, and using tools such as arbitrage or copy trading bots, can be a great way you can start on your journey today.

The resources, training guides, materials and help to be found in this industry is immense so don’t be shy. After all, this is an industry that vows to simplify and overtake the traditional world of finance.