Beginner’s Guide To Automated Trading Software

 

 

The cryptocurrency market is different from stock markets because it never closes for the day or pauses its operations. This puts traders and occasional investors under enormous pressure and stress. Those who have some experience with buying and selling cryptocurrency know the feeling of waking up in the morning to either pleasant or unpleasant surprises of huge gains or losses in their portfolio.

This volatility of the digital money market has led to the appearance and ever-growing popularity of trading bots which allow traders to stay in control of their cryptocurrency transactions at all times. By using an automated trading software they make sure there is somebody who doesn’t sleep and takes care of their portfolio at night, when they are at work, spend time with family and loved ones, or when they simply want to take a vacation but stay in the game at the same time. Moreover, a well-written bot will be able to execute trades in a faster and more efficient manner than a trader would be able to physically achieve manually.

The enormous rise of cryptocurrency popularity has in turn increased the number of bots, which are either available for free as part of an open-source platform, or under license you could obtain in exchange for a flat fee. Let’s take a look at what this trader software is and how you could make it work for you.

What Is An Automated Trading Software?

The name is self-explanatory. Trading bots are automated software programs which interact with financial exchange platforms, usually through an API which helps collect and interpret the relevant market data. Based on this interpretation the program then places buy or sell orders on the trader’s behalf. 

The bot will follow market price fluctuations and react on the basis of the set of predefined rules it has been programmed to execute. It would basically follow market phenomena, such as price, volume, orders and time, but its software is also flexible enough for the application of tweaks and modifications as per the trader’s personal needs and preferences. 

Forex Bots VS Crypto Bots

While automated trader software has been a phenomenon on traditional financial markets for a long time, it is usually exclusive to brokers and financial institutions outside of the reach of regular everyday  wanna-be investors. This is due to the complex nature of these markets and the fact that you usually need to be a professional in order to participate meaningfully.

How is the cryptocurrency trade different? If you want to create and host your own automated trading software, you are faced with the same steep learning curve of required technical skills for its creation, and the digital money expertise, paired with a financial background in order to implement the strategy. 

Complete software solutions are very expensive and out of most people’s reach. So, what’s different? 

The difference stems from the transparent nature of digital money, which enables cryptocurrency enthusiasts to get direct access to bitcoin markets by paying a decent fee to automated trade platforms and capitalizing on that investment. And, as most people are passive traders with limited time and resources for market analysis, there is the expectation that automated trading bots will enable them to trade more efficiently without having to dedicate a considerable amount of their personal time to the process.   

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