automated trading

Buying at a lower price to sell at a higher price is the principle trading that has stood strong since forever. But besides basic mercantilism, the first known stocks-trading-like activities are documented to have happened in the 1300s, when the Venetian moneylenders were selling debt issues to other lenders and individual investors. 

Starting with the 1600s, some of the East India companies started issuing stocks. And in 1971, securities started to be traded electronically.

As we can see, trading has been around for a long time and has evolved along with society. Nowadays, trading is more diversified and accessible than ever. And besides that, we live in a time where we can choose to go to “a parallel world” to trade – the cryptocurrency world.

Nevertheless, trading cryptocurrency is just as risky as trading stocks and can get even riskier. 

On the other hand, the returns come faster and in greater amounts.

And thankfully, today we don’t have to go to the exchange agencies to buy and sell. You can access a web platform from your computer or your mobile. And in some cases, you just open an app.

However, that doesn’t mean that manual trading doesn’t happen. It goes on every day, and there are lots of people making a living from it.

But the people sleep, and the markets don’t.

Staying up all night to wait for your cryptocurrency to hit the right price to buy or sell isn’t something you can maintain for long, even if that means losing opportunities.

That’s why some traders automate their trading.

Automated Trading Bots

Bots reduce the risk of losing opportunities overnight, especially when investors are away from their screens. This is why traders use automated trading bots to execute strategies, even in the cryptocurrency markets.

No, trading bots won’t magically get you rich while you spend all of your time drinking mojitos on a beach.

In fact, the bots will only be as good as your trading strategy. And more importantly, you have to set them up correctly, choosing the right parameters and indicators you wish them to track.

This way a trading bot will help you execute a strategy flawlessly, without falling prey to your own fears. They will manage the repetitive task of administering balances and portfolios and execute trades the instant the ‘perfect’ conditions are met. More importantly, they free up some of your time. 

As day trading can easily turn into a full-time job with you watching the markets and continuously researching your assets, trading bots take on those tasks and follow the rules you’ve set to execute trades. 

Woow… why isn’t everyone using trading bots then?

That’s because they are not perfect. Again, a trading bot is as good as your strategy and still needs to be checked from time to time.

And if you make an error in the setup, the robot will mess up your portfolio. And even if you didn’t make any errors, some trade bots may have some code errors left by the developers. And that’s especially the case with suspiciously affordable software. The top-notch trading bots are either expensive, or not available to the public.

So, the reluctance is understandable.

However, with a little research, you can still find some trading automation solutions. The new cryptocurrency exchange, Scalpex, is offering automatic functionalities inside their trading platform. Starting in September, they are offering a system to create robots that could trade 24/7 using one of several predefined algorithms. And by holding the SXE token, the automated functions and strategies can be accessed in their early stages.

Alternatives to Bots

Automated trading bots are one of the best ways to make your trades more efficiently. But they are not the only way. 

If you prefer to mix manual trading with the automated functions, there are still options that come into the crypto trading world from the traditional world. 

Think through the best and the worst ways the market can go, and set up ‘stop-loss orders’ and ‘take-profit orders.’ This will help you set a price level on which you want to sell for profit at the same time you make the buy order, so you don’t have to watch the price chart go up and down all day. And of course, now that we mentioned going down, cryptocurrencies do tend to have significant sudden drops.

That’s why you want to set up a ‘stop-loss order’. If the price goes down, that order will automatically sell your asset before it goes full-on black swan.

Also, for day traders, there is the ‘bracket order’ which makes use of the ‘stop-loss orders’ and ‘take-profit orders,’ operating them as an OCO (one cancels the other) order. This means that if the stop-loss is triggered, the take-profit order will be canceled, preventing any unexpected operations.

So, in the current cryptocurrency world, you have quite a few ways to automate your trading. But if your exchange platform doesn’t allow nor offer any type of automation, you should look for one that does.

Notice: Information contained herein is not and should not be construed as an offer, solicitation, or recommendation to buy or sell securities. The information has been obtained from sources we believe to be reliable; however no guarantee is made or implied with respect to its accuracy, timeliness, or completeness. Authors may own the crypto currency they discuss. The information and content are subject to change without notice. Visionary Financial and its affiliates do not provide investment, tax, legal or accounting advice. This material has been prepared for informational purposes only and is the opinion of the author, and is not intended to provide, and should not be relied on for, investment, tax, legal, accounting advice. You should consult your own investment, tax, legal and accounting advisors before engaging in any transaction. All content published by Visionary Financial is not an endorsement whatsoever. Visionary Financial was compensated to submit this article. Please also visit our Privacy policy; disclaimer; and terms and conditions page for further information.

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