Automated trading of digital currencies
Automated cryptocurrency trading gives you the opportunity to actively manage your daily trading without having to spend a lot of effort and time on it.
Automated cryptocurrency trading uses algorithms to buy and sell your cryptocurrencies at certain times and according to certain conditions that you specify. Depending on the autotrading strategy you use, trades can be executed based on the asset price, technical indicators or the percentage of value in your portfolio.
If you do not have time to trade cryptocurrencies and do not want to adopt a buy-and-hold strategy, then cryptocurrency autotrading is a great option for you. There are many automated trading platforms available, each with its own features and trading strategies.
What is automated trading of digital currencies?
Automated cryptocurrency trading platforms are automated programs that trade cryptocurrency on your behalf. To use an automated crypto trading platform, you need to create an online account with a trading bot and select a trading strategy for it to use while managing your trading positions. Once you select the automated trading bot, the software will buy and sell cryptocurrencies on your behalf based on the software’s parameters.
Most cryptocurrency bots work as API bots. API trading bots act as a broker who trades on your behalf on another exchange to which you connect them. 3Commas is an example of such bots that you can use for automated trading on major exchanges such as Binance, Coinbase Pro, Bitmex, and Kraken.
The newest and safest form of cryptocurrency trading is automated trading bots that run on the blockchain. Instead of using a website or an API, these bots use the smart contract feature on the blockchain. Smart contracts are tokens that perform financial functions independently, which are usually uploaded to the Ethereum network which is a leading platform in supporting this type of contract.
There are many automated trading platforms for digital currencies. These platforms operate very differently from each other, and each has its own advantages and disadvantages. Which autotrading robot is right for you depends on the type of cryptocurrency you want to trade, the type of exchange you have an account with, and your level of risk tolerance.
Coinrule platform: the best pre-defined trading strategies.
The Coinrule platform offers a wide range of pre-set trading strategies, and the cryptocurrency trading bot currently allows users to customize the investment with over 150 trading models that are automatically executed when market conditions meet pre-set criteria. This platform always offers an array of new options, ranging from accumulation strategies to long-term holding strategies and stop-loss settings.
Although the number of templates you’ll want to access will vary depending on the plan and strategy you choose, Coinrule offers a free package with 7 free strategy templates and up to $3,000 in monthly trading volume. Additional paid packages provide features such as advanced charting options, unlimited use of templates, and even learn to trade lessons.
Pionex: The best platform for extended trading.
The Pionex cryptocurrency trading platform broadens your horizons by offering 18 trading bots that each use unique strategies to give you quality results. These trading bots are explained on the website of this platform in detail so that you can decide which one might suit you best. You can choose one bot that you think will work for you, or you can use different bots until you find one that works for you.
These bots include:
Grid Trading Bot: This bot allows users to buy cryptocurrencies low and sell high in a specific price range.
Leveraged Grid Bot: This bot offers up to 5x leverage.
Spot-Futures Arbitrage Bot: This bot offers retail investors the opportunity to make some passive income with low risk. The estimated return for this strategy is 15~50% APR.
Martingale bot: This bot buys and sells a one-time DCA for a volatile profit.
Rebalancing bot: The rebalancing bot helps you collect cryptocurrency.
Dollar-Cost Averaging (DCA) bot: The DCA bot sets repeat purchases at regular intervals to offset the effects of volatility.
In addition, the Smart Trade platform allows traders to set up stop loss, take profit, and the opportunity to track each trade.
You can save a lot of money with the Pionex automated trading platform because you only pay 0.05% fee on each transaction.
This platform allows anyone to benefit from its automated trading services, regardless of their experience or level.
Tralite Automated Trading Platform: The best choice for advanced traders.
Tralite is a platform that enables all types of traders to automate their trading strategies and create unique automated bots for cryptocurrency trading. This platform offers a range of innovative tools to allow traders of all experience levels to easily create their own automated trading robots.
For advanced users, the Tralite platform offers the world’s first browser-based Python code that comes with an advanced Python API, sandboxing algorithms, and more tools to make a Python developer’s life easier when programming bots.
For the uninitiated, the Python platform allows beginners to turn their ideas into a suitable automated strategy using an easy-to-use graphical interface without having to write a single line of code. All they have to do is simply build various strategies from a range of technical analysis indicators.
The fast and powerful backtester allows users to optimize their strategies to near perfection by taking advantage of historical data.
WunderBit platform: the best trading rates.
Wunderbit strives to facilitate the actual use of cryptocurrencies by offering a number of products and solutions. It introduces and allows a regulated financial institution and allows customers to buy and sell Bitcoin safely and reliably. Wunderbit currently offers a bitcoin and other cryptocurrency trading service, a social trading platform as well as a bitcoin payment processing service and an over-the-counter trading service.
Botsfolio: The best automated trading platform.
Investing at least 5% of your net worth in the cryptocurrency markets can push your portfolio towards outperforming the top stock moguls.
Simply answer a few questions to learn how to allocate investment in different cryptocurrency trading strategies, deposit investment amount to your cryptocurrency exchange account and link it to Botsfolio in minutes.
Bots trade automatically from your account and you can track your automated cryptocurrency trading activities on Botsfolio’s easy-to-use visual dashboard.
Shrimpy.io is unique because it invites you to manage your entire portfolio in one place. You can connect all the exchanges you use and all your wallets to this platform and manage your funds.
The Shrimpy platform supports an estimated 18 different exchanges, including Binance, BitStamp, CoinBase Pro, and Kraken. Social trading gives you the opportunity to benefit from an expert in this field. You can study cryptocurrency and learn how to trade, but there is nothing like benefiting from the advice of an actual mentor who can show you how to succeed as a trader.
CryptoHopper: The best autotrading platform for beginners.
CryptoHopper is a cryptocurrency trading bots API supported by most of the major exchanges. This trading bot is the first choice for beginners because of its affordability and unique trading features that it offers.
If you are new to CryptoHopper, you can get a 3-month free trial to test out their services. After the trial period ends, you can choose from 3 tiers of subscriptions ranging from $19 to $99 per month.
If you want to get acquainted with this cryptocurrency trading bot, but don’t want to risk money, CryptoHopper offers a demo trading account. This is a great way to familiarize yourself with the program before you risk your money on it. CryptoHopper has a built-in social trading platform where users can share their trading strategies, which is an especially useful tool for novice traders.
When should you use an automated cryptocurrency trading robot?
You should use an automated cryptocurrency trading bot if you believe that a particular trading strategy can really beat the market. Using an automated cryptocurrency trading robot does not guarantee that you will beat the market. All the trading bot does is execute trades for you based on an algorithm and according to your strategies and orders.
Another reason you can use an automated cryptocurrency trading robot is to diversify your cryptocurrency holdings in a strategic way. With Tokensets, for example, you can hold a unique coin representing strategy that trades both Bitcoin and Ethereum based on your trading indicators.
Types of automated trading robots?
There are two main types of cryptocurrency trading bots available in the market today. Applications of digital trading bots and decentralized cryptocurrency trading platforms.
Cryptocurrency Trading Bots Applications: These are the most popular form of cryptocurrency trading bots on the market today. These apps connect with other cryptocurrency exchanges in order to manage your investments. This is a great option if you already have a brokerage account on a well-known exchange such as Coinbase Pro, Kraken, or Binance.
Decentralized Cryptocurrency Trading Platforms: Decentralized cryptocurrency trading platforms are the safest way to use automated cryptocurrency trading. This type of cryptocurrency trade uses blockchain technology to trade cryptocurrencies independently. With these exchanges, your money is held in a smart contract on the blockchain network and you own that money which you can redeem with cryptocurrency tokens issued by the trading platform.
Advantages and disadvantages of automated trading
Advantages of automated trading of digital currencies
Automated cryptocurrency trading can offer you some major benefits such as:
Speed: Since bots trade based on software and are automated, they can buy and sell cryptocurrency much faster than you can do it manually. If you are trading based on a trading indicator, then using a robot to place market orders will be more accurate.
Recurring tasks: Most of the bots in the market are traded 24 hours a day, 7 days a week. If you are trading cryptocurrency based on market indices, you can use a cryptocurrency trading bot to do the work for you.
Consistency: Bots are more consistent than humans, as bots are able to work non-stop and always execute orders based on specific indicators. Many times it is difficult to stay disciplined while trading cryptocurrencies, so using an automated trading bot avoids the risks of “emotional trading”.
Save time: Using an automated cryptocurrency trading robot will save you more time because the software monitors the market and executes trades for you. If you do not want to constantly monitor the cryptocurrency markets, an automated trading bot is for you.
Disadvantages of automated trading of digital currencies
On the flip side, choosing to automate can lead to drawbacks that include:
Security: Although cryptocurrency trading bots are generally safe, you need to hold your crypto funds on an exchange to use the trading bot. Holding cryptocurrencies on an exchange increases your risk of being hacked, although most large exchanges are generally safe. If you want to hold your digital currency in a more secure way, you will need to use a hardware wallet.
Monitoring: Although the cryptocurrency bot monitor the market for you, you still need to monitor cryptocurrency prices. This is because cryptocurrencies are very volatile, and your trading strategy may not match the market conditions.
Experience Required: Automated trading robots are best used by advanced traders. If you are not familiar with the trading indicators that trading bots use, you probably shouldn’t use automated bots.
Remember that using an automated cryptocurrency trading robot does not guarantee that you will beat the market. Cryptocurrencies can be very unpredictable and volatile, so trading based on technical indicators is not always the best option.
Some cryptocurrency trading bots have a history of beating the market by a significant amount. If you trade based on technical indicators, use the bot to save yourself time and ensure more accurate buy and sell orders.
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