Trading Bot for Dummies
Tags: Bitcoin Wallet, Cryptocurrency Investment, Crypto Exchange, Trading Bot

Cryptocurrency trading bots are the wave of the future. Learn the benefits and how to select the correct trading bot that will only charge you upon success.

Technology has changed the way people work, communicate, shop and even pay for goods. Companies and consumers don’t always prefer cash anymore, and this behavior is giving way to contactless payments like Apple Pay. With the quick wave of a smartphone, consumers can pay for items at digital registers. Now, a new payment system is emerging: cryptocurrency.

Probably everyone heard about Bitcoin by now. It was the first cryptocurrency to go mainstream, but others are growing in popularity. There are more than 20,000 different types of cryptocurrencies, and more are developed every day.

Research suggests most people have heard of cryptocurrency but don’t fully understand what it is. So, what is it? Is it secure? How do you invest in it? To help, we’ll answer those questions. Buy first thing first, Let’s go back to BASICS.

What Is Cryptocurrency?

Cryptocurrency is a digital payment system that doesn’t rely on banks to verify transactions. It’s a peer-to-peer system that can enable anyone anywhere to send and receive payments. Bitcoin for instance is the first-ever decentralised global digital currency. Cryptocurrency got its name because it uses encryption to verify transactions. This means advanced coding is involved in storing and transmitting cryptocurrency data. Every Bitcoin transaction is recorded in a public log and users can remain anonymous in the network with encrypted keys. The aim of the encryption is to provide security and safety. Transactions can be made with no middlemen — meaning there is no need to go through a bank. There is no government, financial institution, or central authority that owns the decentralized Bitcoin system. People can buy or sell anything without it being traced back to them.

You’ll need to exchange real currency for the cryptocurrency to access the goods or services. Many companies have issued their own currencies that can be traded specifically for the goods or services that the company provides.

How can you make money with cryptocurrencies?

You can buy coins and hold onto these for the long-term or you could sell the coins when their value has increased. To do this, you can either rely on yourself or get crypto trading bots to do your work. Trading bots can be profitable provided you have the expertise to configure it well so that it can use trading opportunities to its advantage and yield high profits. While there are many crypto trading bots in the market that you could try using, not all are reliable or efficient

So you’ve decided to delve further into the wonders of Cryptocurrencies and how it works, or possibly how you could obtain your own. You’re in the right place — we will help you understand how these automated trading bots work and how efficient they are.

Who accepts Crypto? What can I buy with Cryptocurrency?

Today more and more businesses and organizations are adopting Crypto as a valid payment method. Crypto accounts can be linked directly to VISA or other debit cards.

Why are cryptocurrencies so popular?

Cryptocurrencies appeal to many people for a variety of reasons. Here are some of the most popular:

Supporters see cryptocurrencies such as Bitcoin as the currency of the future and are racing to buy them now before they become more valuable as their respective value shall significantly increase.

Some supporters like the fact that cryptocurrency removes central banks from managing the money supply. Over time, these banks tend to reduce the value of money via inflation and fees.

Other supporters like the technology behind cryptocurrencies, the blockchain, because it’s a decentralized processing and recording system and can be more secure than traditional payment systems.

Some speculators like cryptocurrencies because they’re going up in value and have no interest in the currencies’ long-term acceptance as a way to “make” money.

How do I store Crypto?

Once users purchase Crypto, they should store Bitcoins in a “digital wallet”. In terms of security, it is just no different to a bank where they store your password, personal details and your private key to your Bitcoin wallet. The digital wallet is like a virtual bank account, which allows the user to send or receive Bitcoins or any other crypto currency. The difference between most Bitcoin and other cryptocurrencies wallets and bank accounts is that the owner is fully responsible for the security of those funds.

What are Trading bots?

Trading bots are widely available programs that connect to a user’s cryptocurrency exchange and make trades on their behalf. The idea is simple: to help users make money in the markets, while avoiding the need to allocate significant personal time and effort. The underlying assumption is that computers are much better at trading than humans could ever be because trading is all about mathematics and complex calculations.

Cryptocurrency trading bots are programs that automatically buy and sell various cryptocurrencies. They can work around the clock, making sure the trader is always in control of the trade executions and can generate a profit. Trading bots are also able to execute trades more quickly and efficiently than done by a trader manually.

Due to the massive increase in the popularity of cryptocurrencies, you see a rapid rise in the number of cryptocurrency trading bots that are accessible on the market.

Bots have been recognized for many years in various traditional financial markets. However, trading bots have not been traditionally available to the average investor as they were at some point very costly. Bots are in use as mainstream applications, and the trading bots technology & algorithms becomes more available and more affordable to the average investors — directly or via new services that are affordable and accessible.

What is the difference between a trading bot vs a human?

Longevity. Bots can operate 24/7, humans need to sleep (and rest). Speed. Robots operate significantly faster than humans thinking time plus reaction time. Emotionless. Robots aren’t driven by greed or fear. They’ll always do what’s statistically more likely to win. Capacity. Robots can process vast amounts of data per second. Humans quite simply can’t process that much data in that timeframe.

Why using a trading bot?

It’s not uncommon to wake up to either huge losses or massive gains. As a result of this high volatility, traders are warming up to the use of cryptocurrency trading bots to help them keep an eye on their trades at all times. Perhaps you already know a thing or two about crypto trading bots. Maybe you have even heard the success stories of traders who use bots, and they rake massive passive income from the crypto markets.

Trading bots are generally made to automate tasks that consume too much time or are too complicated for humans to execute manually. The difficulty levels of these tasks can range from automating a trading strategy on one trading pair to routing trades between multiple assets for a diverse portfolio.

How Can You Use Trading Bots?

There are limitless possibilities when using trading bots. There are bots for data collection, portfolio management, rebalancing, smart order rerouting, among other tasks. Whatever you may be looking for, there’s a bot out there that does it.

if you are new to the crypto world, or if you don’t have much time to manage your invest I recommend using a bot such as Algowave — it’s a simple and friendly option, they also have a support team that you can talk to daily — and the best thing is that it’s free, they only get paid if you earn on your investment, unlike other bot company that asks you for a registration fee.

If you have experienced trading crypto I recommend using cronix or crypto hopper. Those bots allow you to choose your strategy and operate complex trading tasks.

What to look out for when picking a trading bot

Before you buy/trial/invest in any bot, ask yourself: Is their success aligned with your success? If you lose money are they willing to cut their fees? If you make money will they succeed too? If they just hand you a platform and send you on your merry way to figure things out by yourself it’s never a good sign unless you know exactly what you’re doing. In my opinion, everything ultimately comes down to people.

7 Tips For Successful Cryptocurrency Bot Trading

You will spend before you earn

Like many other things, you need to invest in a good trading bot before you start seeing results. The more careful you are when choosing a trading bot, the higher your chances of success. Factors you need to consider here include; the reputation of the team that created the bot, the type of strategies the bot supports, customer support efficiency, ease of use, and cost.

2. Try your bot in a demo account first

To ensure that you are investing in a cryptocurrency trading bot that is right for you, try it in a demo first. Trying a demo gives you ample time to learn how its system works and decide whether it’s suitable for your trading strategy.

3. Ensure your bot is compatible with your preferred exchange

Make sure you confirm that it is compatible with your favorite exchange platforms before you get to work. It would be a bummer to purchase one only to realize it’s not suitable for your trading platform. Generally, you will find that most crypto trading bots are compatible with most exchanges.

4. Take time to create a strategy

While the trading bot will do most of the work that goes into growing your crypto portfolio, it should not entirely replace you. If you are new here, your trading strategy is the set of rules that govern your overall approach to crypto trading. It defines the conditions under which you are most likely to gain profits and outlines how you can engage them. A good trading strategy should consist of the following parameters:

Risk- how much risk are you willing to handle on the trade.

Price- at what price is the trade going to be executed.

Quantity- what amount of capital are you investing in the trade.

Entry trade- based on your strategy the entry trade will perform a buy or sell action at a predetermined price.

Exit trade- at what position do you want to exit the trade?

5. Avoid giving your bot withdrawal access

The awesome thing about bots is that they have the capacity to execute all the instructions from your trading strategy (when to buy, sell, and hold, etc.). Try not to give it too much freedom. For instance, giving your bot withdrawal access is a bad idea. You risk losing your money.

6. Be on the lookout for the latest crypto news

Since crypto trading bots are automated, they are limited in terms of how they react to emerging news such as hacked trading platforms or the ban of cryptocurrencies by individual governments. News can affect the price of a cryptocurrency positively or negatively. Remember to stay up-to-date with the latest crypto-related news so that you are in a better position to make wise investment decisions.

7. Watch out for scams!

Whether you are trying to figure out a strategy or purchasing a new bot, always keep your wits about you. There are many fraudsters out there waiting to take advantage of every opportunity to swindle you. It pays to be vigilant. If something seems too good to be true, stay well away!