It is important to focus your attention on making your investment strategy as efficient and profitable as possible. There are many ways to improve your investment efforts from deepening your knowledge of financial markets to introducing new analytical techniques into your trading routines. However, many miss out on the use of trading bots for crypto and other forms of automation.
We are going to talk about infusing your investment plan with advanced automation instruments that will drastically increase your earning potential.
Are crypto trading bots profitable?
One of the biggest questions that many beginner retail traders have is about the efficiency of contemporary automation. It is not a secret that many Wall Street brokers managing trust funds and investment accounts of huge banks have been using various forms of computer trading since the 1970s.
Algorithmic trading and ATS (Automated Trading Systems) have been a huge part of modern investment and asset trading. Now, when it finally reached the masses, everyone can use a wide range of different automation tools including arbitrage bots, social trading, automated DCA buying, and more.
Ignoring this staple of retail trading is similar to missing out on an opportunity that should have been seized long ago. A contemporary trader who works with highly volatile assets that tend to increase and decrease in value systematically has to use bots.
Modern crypto trading bots are scripts that are executed in the cloud by a vendor offering you automation services. They can dramatically increase the speed of decision-making, reaction, and processing of orders.
Here are several aspects that make bots incredibly efficient:
- Robots do not need to rest or sleep.The cryptocurrency market never stops. Every single hour brings new opportunities. People often miss them because they need to sleep and spend time on various chores. Bots focus solely on monitoring the market and acting when the conditions are perfect.
- Bots make any day trading strategy better.While they are unnecessary when you are opening market positions once a week, bots can be extremely efficient when it comes to scalping or other forms of day trading where the speed with which a trader reacts to a change in the market defines profit.
- A machine lacks emotionality.If you have a consistently performing strategy, doubting it during periods of uncertainty is not a good idea. However, people tend to overthink their decisions and often miss out on valuable trades.
A bot is a good way to make an already working strategy even better. If you are aiming at maximizing profits and increasing the rate of successful trades, you should consider using various forms of automation.
Do trading bots work for crypto?
Cryptocurrencies are speculative assets. While many enthusiasts believe that Bitcoin will become a good substitute for international fiat currencies like the US dollar or Euro, the deflationary nature and the limited amount of BTC will reduce its power as an exchange medium for goods and services. Even if it will become a viable alternative, we do not see many good use cases as of right now.
On the other hand, the same qualities that make BTC suboptimal as a currency make it impressively great as a value storage. It is a perfect example of an asset that does not have any feasible value but generates enough trust and hype to be attractive to speculators and retail traders.
Such assets tend to be quite volatile and have dramatic swings in value. We have seen many awe-inspiring bull runs and depressive dips over the last decade. However, it also means that smart financiers were able to make millions.
Some retail traders are not focused on betting big on the next dramatic swing. Instead, they try to take advantage of the price volatility and focus on day trading strategies. It is a viable approach that can be quite profitable if you have a good technical analysis system that generates reliable signals. Since any good strategy produces both true and false signals, it is important to find one that simply has a good ratio of correct signals to incorrect ones.
When you have such a system, crypto trading bots become handy. They maximize your profits by acting on every single signal and protecting every market position with a predetermined stop-loss order. It means that bots extract the maximum potential value from your technical analysis system.
Which trading bot is the best?
It is impossible to determine which automation provider in the market offers the best service. However, some companies stand out more than others. For example, WunderTrading is a good example of an automation platform that offers a rich selection of various bot products including some novel solutions like GRID and triangular arbitrage bots.
On the other hand, you may choose other vendors that have similar product lineups. Do not forget that you need to test these bots before committing to paying annually. Maximizing profits also means minimizing expenditures. In our case, paying for an automation service is an expense. You should try to pay less and save on bulk purchases.
Select companies like WunderTrading offers their clients a free plan allowing you to run up to five bots simultaneously without the need to upgrade to a paid plan. It is a great way to learn more about how to use a bot for cryptocurrency trading. Without a trial period, you will be paying for something that may not work in the long run and leave a gap in your finances.
Also, try to choose platforms that have a good interface that does not overwhelm you with unnecessary information. If you can control your bots easily, you will be able to maximize your profits. When you employ instruments that you do not fully comprehend, they leave you vulnerable to unexpected risks and inhibit your ability to build reliable trading systems that are capable of generating profits consistently.
The main takeaway
Modern retail traders have to embrace automation if they want to stay relevant. A market is a big place where participants compete against each other. Those who use advanced methods and novel approaches usually win while the rest barely hold onto their portfolios. It is important to use as many advantages as possible.
Your investment efforts will be greatly rewarded if you start using platforms like WunderTrading and TradingView to increase your efficiency and better understand how to invest smartly. These tools won’t make money on their own, but they will drastically increase the earning potential of any trading system that you are currently using.
