If you have been keen on the investment business, you probably know about automated trading systems. For the sake of everyone else who might not be financial investment-savvy, this process is also known as system trading, automated trading, mechanical trading systems or algorithmic trading.
What are they about?
These are systems where investors set some rules to define their entry and exit when trading within their investment portfolios. Once these rules are set, a computer executes their trades automatically. Interesting, huh? Here’s an even more interesting fact, more than 70% of shares that people buy or sell in the stock market in the US alone are executed through automated trading systems.
So, since the cryptocurrency investment market is pretty much similar in principle to the traditional investment market, is it possible to use automated trading systems?
Of course, it is possible.
Cryptocurrency might be the new kid on the block, but considering that this is supposed to be a viable alternative to traditional fiat currency, the crypto market must operate in many ways in a manner similar to the normal financial market. There are many benefits of owning cryptocurrency and the fact that you can trade like a normal stock market further makes this an interesting spectacle. Let’s explore trading in crypto using automated software and see what it’s all about.
The Concept of Automated Trading
Investors can make use of crypto software to enhance their trading experience. To do this, you will basically be using similar rules and techniques used in traditional money management not just to trade, but also to monitor what goes on in the market. In as much as you might be interested in specific cryptocurrency pairs, there is no harm in monitoring the others too. After all, this is a market where the value of tradeable options keeps fluctuating randomly, so by monitoring the rest of the trading pairs, you might identify a viable investment opportunity.
For the most part, investors struggle to trade in person due to a lot of inconveniences. Perhaps you are held up at work, and miss out on an opportunity that might have earned you significant returns. You might also find yourself in a situation where you do not have access to the internet or electricity for some reason. Such issues are common, but they should not prevent you from benefitting from the crypto market. With a reliable automated crypto trading system, you should not have much to worry about.
Besides, one of the biggest challenges that investors have is getting emotive with their trades. As a result, you can end up holding onto a crypto pair longer than you should have. You might also avoid investing in a given currency because you might not be interested in it, while it is a viable investment opportunity. Automated crypto trading takes away the risk of emotion in trading. Your trades are executed automatically as long as they meet specific conditions.
What To Look for In Automated Cryptocurrency Trading
With many people opening up to the prospect of investing in cryptocurrency, there are a few pointers that should guide you on choosing the appropriate automated cryptocurrency trader in the market. There is quite a number already, so armed with information, you can check out a few, compare them and choose one that suits your needs and your investment style.
- Market Access
One of the important features you need to look for is access to different exchanges. You need a trading program that gives you access to a variety of exchanges. When investing in cryptocurrency, or any other investment for that matter, you should not limit your options. The variety gives you a better shot at getting better deals. Other than exchanges, an ideal program should also give you access to live market stats, so that at any given point in time, you know how the market is performing.
- Currency Support
For investment purposes, you need access to as many cryptocurrencies as possible. There are several investment opportunities, not just with the major cryptocurrencies. You should also be able to trade in other currencies like Dash, Litecoin and Ripple other than Ethereum and Bitcoin.
Other than access to many currency options, the trading software you use should guarantee you live market data from all or any of the exchanges you prefer.
- Technical Indicators
One of the other features you need in automated trading is the ability to trade cryptocurrencies according to specific investment rules, like statistical arbitrage or using technical indicators. This is no different from what you would expect in the normal financial markets.
- Account Management
Automated crypto trading programs should also have a feature that allows you to manage your accounts. By account management, this means you can download currency pairs, exchanges and accounts into the program. With this feature, you have intuitive control over your trading accounts.
Apart from that, the program should also allow you the ability to trade different currency pairs on several exchanges. Without limitations on exchanges where you can trade, you should be able to benefit from different rates across the board.
There are many people who are not conversant with the trading programs but would still wish to trade in cryptocurrency. For this reason, a good platform should have a simulation account. A simulation account allows you to practice trading before you can invest in the live market with your currency. This makes it easier for you to learn and perfect some of the strategies necessary for investment trading in cryptocurrency.
At CoinCheckup, we believe that there is so much room for growth for investors who are keen on expanding their portfolio with crypto assets. However, like any other investment, this calls for discipline on the part of the investor. You must conduct due diligence before you invest in any asset online. Automated trading platforms will make your work easier, but you have to put in the work, to find the right one. You also need to figure out the ideal parameters or conditions within which you can set the trading software to deliver impressive results.
