As the largest crypto asset by market cap, Bitcoin is ideal for automated trading. Its liquidity, stability, and predictability relative to other digital assets make it an experienced trader’s dream. Especially so for those traders who never dream because they’re machines.
That’s right: we’re talking bots, programs that can execute trades based on specific market conditions. A bot is typically designed to capitalize in intra-day market movements, buying at lows on the chart, selling at highs, and repeating to accrue profit. When finely tuned, a bitcoin bot is a precious program that can enrich its operator.
Why it pays to automate
Automated bitcoin trading is an alluring proposition. After all, who wouldn’t want to spend less time trading while pulling in consistent profits? That’s the vision underpinning automated trading tools, better known as bots. Heart-warming as that idea sounds, it’s not as straightforward as grabbing the first bot you see and immediately generating profit.
It takes research and experimentation to settle upon an automated trading solution that works for you. The time you put in will pay dividends, however, once you find a market-beating bot.
Helping beginners go pro
There’s a reason why professional traders, particularly those using leverage, spend long hours staring at screens. Crypto markets are volatile, and when you’re in a leveraged position, a sudden breakout can be the making or losing of your bankroll.
Given the time and concentration demands trading makes on the pros, what hope for amateurs who have less knowledge and less time to dedicate to the craft too? This is another area where automated trading strategies can prove invaluable. A trading bot can be likened to autopilot on a plane: proficient at running the show, whilst giving its human operator the freedom to make manual adjustments at any time.
Automate and iterate
To summarize, there are two reasons why people turn to automated bitcoin trading: to trade more frequently and with more success. The frequency is obvious: a trading bot doesn’t tire, and can enter a position at any time of the night or day if preset conditions are met.
The success component, meanwhile, is almost a given: bots are immune from emotion and can make rational decisions based on analysis of multiple data points. Human traders simply can’t compete.
There are a few caveats of course: bot quality can vary greatly, and even the best automated trading solutions can’t guarantee a winning trade on every occasion. Over the course of time, however, a well-designed bot will surpass anything you could expect to achieve through manual trading.
Whether you’re just starting your trading journey or have been grinding it out for years, exploring automated trading is the best thing you can do for your portfolio. Do your own research, be realistic about your expectations, and start off small before increasing size. Pretty soon, you’ll wonder how you ever got by before automation. Once you go bot, you never go back.