Do you want to join the thousands of other crypto traders making money trading cryptocurrency in the crypto market but don’t have the time to sit at your computer all day long? If so, automated crypto trading platforms may be a great option for you!
Unlike traditional stock markets and paper trading, where trading stops at the end of each day, cryptocurrency markets never stop. As a result, it is virtually impossible for professional traders who want to follow the market conditions to do so 24 hours a day, seven days a week, 365 nights a year.
In this blog post, we will discuss what automated crypto trading platforms are, how to use them, and more!
What Is Automated Crypto Trading
Automated crypto trading platforms are software that uses different trading strategies to trade cryptocurrency for you. They automate the process of buying or selling cryptocurrency based on predefined rules. These rules can be set by the trader or automatically generated by the platform. The most popular types of automated crypto trading platforms include:
1. Algorithmic Trading Platforms – these are platforms, or crypto trading bots, that use algorithms to determine when to buy and sell cryptocurrency.
2. Expert Advisors (Expertise) – these platforms use an expert’s knowledge to help investors decide whether to buy or sell cryptocurrency.
3. Hybrid Trading Platforms – hybrid platforms combine algorithmic and expertise strategies.
4. Market-Making Platforms – these platforms act as middlemen between buyers and sellers in order to keep prices stable.
5. Portfolio Management Platforms – portfolio management platforms allow advanced users to manage their own portfolios of cryptocurrencies.
6. Robo-Advisors – these platforms provide investment advice to users without requiring any personal information.
7. Social Trading Platforms – social trading platforms enable users to interact with other cryptocurrency traders through chat rooms, forums, etc.
8. Technical Analysis Platforms – technical analysis platforms provide charts and graphs to help users analyze past trends and predict future price movements.
9. Trending Bots – trending bots track the performance of various cryptocurrencies and alert users if they start moving up or down.
How Do I Use Automated Crypto Trading Platforms
Automated crypto trading platforms require users to create an online account with a crypto trading bot and to select an automated strategy to use. To set up your online automated crypto trading platform, follow the steps below:
Step One: Choose A Bot
The first step in setting up your automated trading platform is to choose a crypto trading bot or algorithm. There are many to choose from, but not all of them are created equal. Be sure to do your research before selecting an option.
Step Two: Create an Account
Once you have chosen a crypto trading bot, the next step is to create an account with the bot. This will require providing some personal information, such as your name and email address.
Step Three: Select A Trading Strategy
The next step is to select a trading strategy. There are many different strategies to choose from, so be sure to find one that fits your needs.
Step Four: Fund Your Bot
Once you have chosen a crypto trading bot and a trading strategy, the next step is to fund your account with the bot. This can be done by transferring cryptocurrency to the bot’s account or by depositing fiat currency into the bot’s bank account.
Step Five: Configure Your Bot
After creating an account with your bot, you must configure it. This involves configuring the bot to connect to the exchange where you plan to place trades. You may also need to configure the bot to connect to other APIs like coinmarketcap.com.
Step Six: Add Assets
After configuring your crypto trading bot, you must add assets to it. Assets are digital tokens that represent real-world items. For example, Bitcoin represents money while Ethereum represents computer processing power. Once you have added assets to your bot, you can begin placing orders on crypto exchanges.
Examples of Crypto Trading Platforms
Some of the most popular crypto trading platforms include Robinhood, Coinbase (Coinbase Pro), Binance, Kraken, and Endotech.
1. Robinhood – Robinhood allows users to buy and sell stocks, options, ETFs, cryptocurrencies, and more at no cost. The company does charge a small trading fee, but offers zero transaction fees and lets users invest directly from their phones.
2. Coinbase – Coinbase and Coinbase Pro, are US-based cryptocurrency brokers that were founded back in 2012. It provides its customers with a secure wallet to store their coins, a suite of tools to trade and monitor their investments, and a payment system to accept credit cards.
3. Binance – Binance is another major player in the crypto space. Founded in 2017, this exchange has quickly become one of the largest altcoin crypto exchanges today. They offer a wide range of trading pairs including BTC/USDT, ETH/BTC, EOS/BNB, LTC/BTC, etc. There are no fees for crypto deposits and if you do not use Binance Coin to pay your trading fees, each trade will carry a standard trading fee of 0.1%.
4. Kraken – Kraken is yet another large cryptocurrency exchange headquartered in San Francisco, California. With over $1 billion USD traded daily, they’re one of the leading bitcoin crypto exchanges today. The trading fee ranges from 0% to 0.26% of the total cost (value) of your order and depends on a few other factors. Kraken supports numerous cryptocurrencies including BTC, BCH, ETH, XRP, LTC, DASH, ZEC, XLM, REP, ADA, TRX, ICN, CLOAK, VET, SYS, STEEM, GAME, GNO, PIVX, REQ, BLK, NANO, IOTA, QTUM, XVG, WAVES, LINK, AION, MANA, BAT, OMG, HSR, EDC, HT, and much more!
5. Endotech – Endotech offers algorithmic crypto investing for everyone! Their platform enables investors to automate their investment process using smart contracts. Users simply deposit funds into their accounts, set parameters for their algorithms, and let the automated trading bots work for them.
What are Automated Trading Strategies
Automated crypto trading strategies are used to automatically execute trades based on certain conditions. These conditions could be price movements, market conditions or trends, technical indicators, news events, or anything else you want to measure.
There are two main types of automated trading strategies:
1. Algorithmic – these strategies use software programs to analyze data and make decisions about when to enter and exit positions.
2. Technical – these strategies use charts and graphs to determine entry points and exits.
The automated trading strategies market is growing rapidly. In fact, there were over $1.5 billion USD invested in these strategies last year alone. Some of the most popular strategies include:
• Algorithmic Forex – These strategies use advanced mathematical formulas to predict price movements in the foreign exchange (forex) crypto market conditions.
• Technical Analysis – These strategies analyze charts and graphs to identify patterns that indicate future price movement.
• Market Making – These strategies aim to profit off of small differences between bid and ask prices by buying low and selling high.
• Fundamental Analysis – This strategy analyzes publicly available information such as earnings reports, financial statements, and analyst recommendations to find undervalued companies.
• News Events – These strategies look for trending news stories that may affect an entire industry or company.
In conclusion, automated crypto trading platforms offer a number of benefits, including 24/hour trading, risk allocation, automated execution, and reduced error. However, there are also a number of risks associated with automated crypto trading, including the possibility of fraud and hacking. It is important to do your research before selecting an automated crypto trading platform to use. To learn more, check out, Do Cryptocurrency Trading Bots Really Work or How to Create a Crypto Trading Bot.