Cryptocurrency markets never close like other markets and considering that it’s human beings investing in them, you would expect them to get tired and take a break or sleep at some point.
That is a problem because in cryptocurrency markets, change happens very fast hence one has to make sure they are always following up closely. That is why people choose automated means or the use of automated trading bots.
A trading bot is software which is programmed based on the movements of the markets. They analyze data like volume, orders, prices, time, and other settings the trader can decide are important for a successful automated trading strategy.
Below are some of the benefits an investor could enjoy when using an automated strategy in the crypto markets.
1. Invest in Multiple Markets at Once
Unlike human beings, machines and programs never get tired. These trading bots work in the way the traders program them, they can work for as long as needed. That is the reason why a single crypto investor can invest in hundreds of markets at the same time.
These trading bots can scan through all available crypto markets, measure their profitability and returns and evaluate the amount of time an investor can be earning if they invested in them. They can also identify and evaluate all the risks in that particular market, and by their program, they would know where to place their investments hence increasing the investor’s profits highly.
2. Real-time Investment Reports
In a situation where an investor might have placed many investments in one or more markets, they may be overwhelmed when trying to keep tabs on the profit and loss of all of these investments.
Trading bots, on the other hand, have a well and easy to understand summary always available on their interface. The bots would never forget to update or ignore anything including the slightest details. Some trading bots even alert investors on activity in the markets via social platforms like Telegram or Discord.
3. Market Analysis for Every Trade
Every investor knows that they should always conduct a comprehensive market analysis before investing anywhere. It gets harder if there are many markets to be checked before making the decision. In this case, an automated strategy can easily conduct analysis very fast including carrying a comparison of figures altogether.
Automated trading bots use tools like backtesting, which can generally do the analysis for the investor. Backtesting, tests the number of trades, the profit made, win/loss ratio, max consecutive losses, and max drawdown which is the largest drop in portfolio value in an investment.
Backtesting an Automated Trading Strategy on LiveTrader.io
4. Increased Trading Speed
Every investor knows that every moment wasted would cost them dearly. With the help of a trading bot, cryptocurrency investments can be fast and profitable. In person, it would be hard to do research by yourself, calculate risks, and still manage to place the order in time. However, automated trading strategies save a lot on time, and this creates more profit for the investor in a very short time.
5. Trading Based on Facts, rather then Emotions
Emotions play a huge role in our investments, that is why people might end up making the same mistakes over and over without accepting the fact that they should think differently.
Emotions do not apply with trading bots, and hence decisions are made wise, and un-influenced. Although these bots at times may not be allowed to make the ultimate decision on placing investments, they at least propose the best performing action and leave you to decide based on facts and figures. Or you can run it completely automated which will trade directly on the analysis of your trading bots to remove emotions from the equation altogether.
6. Easy to Get Started and Use
Crypto investments can be hard, especially for newcomers with no knowledge of the market. There are very few places where people can get educated on crypto investments, this limits so many potential investors into the crypto ecosystem.
However, some trading bots have a very easy interface which is meant to be understandable by newcomers and the experienced too. These trading bots have encouraged many into the crypto ecosystem as it’s all a matter of automated trading.
You leave it to the machines to decide for you.
7. Reduce Costly Mistakes
Investments in crypto can be very large which means there can not be any errors of judgement. Sometimes trader’s egos will get in the way of a trade which can be very costly. Trading bots don’t make mistakes, they trade to a pre-defined set of rules and don’t ever deviate from the strategy. This means there’s little room for error as they won’t experience emotions such as FOMO.
Machines are believed to be far superior compared to humans, and this is why human beings are acknowledging machine involvement in everything they do.
Crypto investment is a good example of an industry that has been fully revolutionized by machines and software in the name of trading bots. Trading bots are also very cheap to set up and run. Compared to human beings who are slow and require huge amounts of remunerations, these machines work fast with low supervision.
Conclusion
Are you contemplating whether to invest in cryptocurrencies? If your answer is yes, then consider using automated strategies for trading in this market and you will enjoy all these benefits and eventually succeed without frustration.
The technological way is the most promising way in cryptocurrency investment because, in this industry, it is good to avoid mistakes at all cost.
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