Automated cryptocurrency trading: features, working principle, pros and cons
There is such a stock market, which is completely closed for the weekend with the fixation of the flow rate. And there are cryptocurrencies, the rate of which can change at any second, their volatility is difficult to predict even for those who have been in the crypto market for years.
The fluctuations in the exchange rate of coins can both make and lose a significant amount of money. So, it is better for investors not to be distracted by the news of trading exchanges. Of course, not everyone wants to stay awake 24/7 and will always be ready to make a purchase and sale deal. In this case, special systems help.
Cryptocurrency automated trading is a so-called bot that can independently buy or sell a token with the maximum benefit for the trader if the appropriate parameters are set.
Let’s take a closer look at how automated trading bot cryptocurrency works and what advantages and disadvantages it has.
What is automated trading platform crypto currencies?
The term cryptocurrency auto trading bot implies a special tool that automates the process of trading and transactions in the cryptocurrency market. A trader can set up a bot to search the exchange for tokens by the criteria that he will use on his own.
For example, you set the following parameter: you will have to buy a particular coin that is worth $20 only if the bot finds it at a price of $15. That means that you don’t need to search all exchanges for the appropriate rate – the bot will handle that task.
However, using cryptocurrency auto-trading platform is not always profitable. At least because this system is not standardized and can also work chaotically. So it is better to choose proven cryptobots, among them:
- CoinruleWunderTrading;
- Bitsgap;
- Pionex;
- Tradesanta;
- Cryptohopper;
- Botcrypto;
- Gunbot, etc.
How trading bots work on the cryptocurrency market
Not all investors support the idea of using so-called platforms to trade cryptocurrency automatically. Setting up the software is done directly by the trader, taking into account the plan by which he plans to work. That’s why a basic, preferably in-depth, knowledge of cryptocurrency is essential for you.
In addition, it is important to stay involved and take the time to analyze the market. That is, to work together with your bot, just spending a little less time than you would spend without it.
Advantages and disadvantages of cryptocurrency auto trading
Among the main positives that a trader or investor can count on when using the crypto auto trading bot:
- Automation, which will keep newcomers from spontaneous purchases or vice versa – too long doubts and as a result losing a profitable offer.
- Fast response. It takes a few minutes to make a buy or sell deal manually, or even a few hours for beginners. The bot works in a shorter amount of time.
- Saving your time. Changes in the cryptocurrency market can be observed even at night, while you are sleeping. This is the time of year when crypto trading automatic will be the most useful.
Among the disadvantages of using them is the fact that almost all bots are unregulated and can be unreliable and require constant monitoring. Remember that to use them you still need some basic knowledge in the world of cryptocurrency. At least in order to set up the tool correctly.
