One of the best parts about crypto is that the whole industry never sleeps. The market never stops to catch a break. When you have to be awake around the clock, automated trading seems to be the only viable solution. However, you will need a good strategy, a perfect provider of automation services, and solid capital to start investing!
What is automated trading?
Automation is widely employed by contemporary retail traders who want to stay efficient around the clock. While many investors enjoy the 24/7 nature of the crypto market, it is also challenging for those who want to be competitive and consistently make a profit. Sometimes, perfect opportunities present themselves when you cannot see them.
How does an automated trading robot work? Below is a very simplified description of any automation scheme:
- Trader registers on one of the automation platforms and creates a bot.
- Then, they must edit the script and set up conditions. You may use a preset or an alert from TradingView.
- The newly created bot must be connected to the exchange via API.
- The bot will act on your behalf on the exchange using instructions in the script.
People use automation to accumulate resources (DCA), find profits on spot markets (GRID), or even search for discrepancies in prices across multiple CEX platforms (Arbitrage). Automation solutions are very powerful and allow traders to utilize complex strategies and stay active all the time.
Here are some more reasons why retail traders enjoy automated trading systems:
- A computer program does not require any sleep, meaning it can continue trading even when humans rest, allowing you to capitalize on alerts you would otherwise miss.
- Robots never succumb to emotions and stay focused. Therefore, we use the term “human factor” when describing certain mistakes for a reason. Robots do not have any weaknesses in this regard.
- Automation solutions have become quite cheap compared to what they used to cost just a decade ago. In addition, the development of cloud computing allowed many companies to develop very competitive products.
- An automated trading app can be easily integrated with any CEX and uses other external services like TradingView to facilitate reliable trading using technical analysis and instant order execution.
Finding the best automated trading bots
The industry is highly competitive and enjoys immense demand from traders from across the globe. It means that you can always find a suitable solution, but it may not be the best. There are several aspects of service that you should pay attention to when choosing a good automation vendor:
- User experience. From visual design to the intuitiveness of the interface, everything must facilitate a good and memorable user experience. You won’t be able to focus on creating an efficient trading strategy if you have to waste time trying to understand how things work.
- Diversity of products. A good automation platform will offer a variety of different preset templates and advanced solutions like triangular arbitrage. Search for services where you can find DCA, GRID, and custom bots.
- Pricing. Many think that several bucks per month do not make a difference in the grand scheme, but they are wrong. Small fees and expenses quickly add up, especially if you use strategies that consistently bring smaller profits.
Examples of good automation vendors
Several companies deserve your attention. However, among many platforms offering the best-automated trading software in the market, a couple stands out thanks to their distinct advantages. Here are some examples of good automation vendors:
- WunderTrading is a great provider with a plethora of interesting products and templates that you can start using immediately after registering. Since the company offers a free plan to new customers, you will only need an active account on an exchange. The platform is integrated with numerous CEXs like Binance, CoinBase, FTX, Bittrex, and more. The selection of automation solutions is quite rich, with DCA, GRID, and Arbitrage bots forming the product’s core.
- 3Commas is a respectable vendor with an impressive track record and a diverse lineup of products. Its main focus is social trading, with various ways to use copy-trading. It is a good platform if you are looking into ways to reduce your personal contributions to the trading process. If you are not sure about your strategy and would like to follow the lead of professionals, 3Commas is a good choice. Pricing can be a little bit harsh compared to what WunderTrading has to offer.
- CryptoHopper is another automated trading platform that provides various templates and standard automation tools. Some users think the website is slightly overdesigned and could use some trimming. In addition, the interface lacks advanced analytical tools. However, it is a great choice for people who like using relatively simple scripting tools and can afford to use a platform without preemptive testing.
Is automated trading crypto strategy profitable?
Profitability is ultimately your responsibility. Automation platforms provide tools that can be used to a great effect, but they also can be completely useless or even harmful when employed by incompetent people. Therefore, before using any automation solution, consider the following:
- Do you have the necessary expertise in technical analysis? All scripts use technical analysis to at least some degree, meaning you must understand how to set them properly. Studying the intricacies of this analytical method is crucial to your success.
- Is your capital big enough? Automation requires you to place multiple orders at once in short succession, meaning that you need a large capital to get started and be efficient. If you don’t have enough money to start trading and pay for tools like TradingView and WunderTrading, you should not even think about using bots.
- Can you give up control? Some people simply cannot step back and allow bots to work as intended. They endlessly tinker with their robots and often cause more harm than good. Automation should be just left alone until you have enough data to evaluate its performance properly.
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