How to use automated trading with cryptocurrencies

Auto Trading

Automated Trading in the various cryptocurrencies, whether it’s classic bitcoin or brand new types, is flourishing more than ever before. Many analysts have already predicted a crash or said death to the whole issue. However, it should be noted that the hype still continues and it keeps going up. Even smaller dips, as recently within the last few days on the trading market of cryptocurrencies, are not permanent phenomena to date. We would like to explain a little more about how you can minimise the risk of an investment and how automated trading works.

What is so-called auto trading?

Automated trading with investments such as shares or, in our case, digital currencies, involves the automatic triggering of orders to buy and sell. There are now a handful of different companies that have specialised in this field. As a rule, they are software developers who offer the so-called trading software.

The core of such software is usually an algorithm, also called a trading bot. It monitors the market and triggers the purchase or sale of the cryptocurrency when certain signals are detected. This allows you to profit from the fluctuations on the trading floor around the clock and maximise your own portfolio and profits. The reactivity and speed as well as the assessment based on a wide range of data succeed better than a human could.

What should one pay attention to?

Automated Trading

However, you should also pay attention to a few things. For example, a good trading software always offers the possibility to make your own settings. Here it is particularly about the subject of risk tolerance. Based on which circumstances, how aggressively to bid or sell, should in any case still be left to the discretion of the individual. Furthermore, one should pay attention to the seriousness of the provider. Here it is not always very easy, because a proper accreditation as for example for stock trading or official portals as for example by a stock exchange supervisory authority is not yet available. In part, therefore, one should also rely on common sense.

What risk one has to reckon with

It is true that automatic control of trading decisions will minimise significant security risks. However, one can also assume that such a system can never be perfect. Ultimately, even a machine cannot foresee the future and losses may occur. In our view, it is important that the portfolio is spread as widely as possible and that an investment does not lie in one measure alone. This is still one of the best strategies for sharing risk.

Crypto trading still a strong opportunity

Even today, there is no denying that investments in digital currencies still represent a strong opportunity. The entire market is still developing positively and even if there are short-term fluctuations, a positive development can always be expected in the longer term. So even today, you can still get in and profit significantly.