Why Automated Trading May Be the Right Choice for You
PROMOTED
The continuous development and updates to the cryptocurrency world of finance have caused it to increase its popularity further, for it has created many other altcoins that already exist in the crypto market, as well as increased crypto exchange and trading platforms.
The crypto world’s innovation has also made automated trading possible. There has been an increase in automated trading platforms in the market. Thus, before getting into the automated trading system, you would need to know what it is and how it works so that you would know whether this type of trading works best for you or not.
It is always stressed and emphasized how much your prior knowledge and research affects the success of your investment; thus, stay alert and avoid risks or making decisions you are not prepared for.
Therefore, before signing up for any automated trading platform, let this article give you an introduction to how automated trading platforms work and the benefits they can bring to your crypto journey. Before we delve into the topic, remember to always opt for trusted trading platforms and crypto websites to evade potential risks when investing. For more information and professional advice on cryptocurrencies and other assets such as stocks or Forex, visit the Bitcoin Evolution official page.
What Is an Automated Trading Platform?
Automated trading platforms aim to make trading be executed automatically based on set rules and parameters by the user. It is an algorithmic and mechanical system trading that once you have set your trade entry and exit to the program, it automatically executes trades that best respond to your set rules. As a result, automated platforms provide you with the best trade opportunities and possible high-profit gains while eliminating risks of emotional trades since all trades are data-based.
Advantages of Using Automated Trading Platforms
Rational Trade Decision
When you sign up with an automated trading platform, all your trades are be based on the data the platform system gets and your set rules; thus, all your trade positions will be rational without emotional factors like fear of missing out or the hype you feel when you get high profit since not all your gut feel can be 100% correct. Many investors would want to refer to data and trades based on it. Thus, if you are someone who easily gets affected by your emotions and tends to overtrade, going for automated trades might be the best for you.
Backtesting
Backtesting is possible and automatic with automated trading; although backtesting is also possible when making manual trades, it is not automatic.
Backtesting refers to the system of automated trading that applies your set trading standards to the crypto market data so all your set data can be executed based on the best possible trade there is in the market.
Thus, when setting up your trading rules, you need to be clear of every rule you set so that the computer can smoothly execute your trades. Backtesting allows you first to check whether your set rules will work on the market by testing it first on the historical market data. Thus, you can easily evaluate whether a trade position works before risking your money on a specific trade.
If you are still unsure of what backtesting is all about, feel free to check out the short tutorial for beginners provided by Binance Academy.
Trading Speed
It’s a fact that computers run faster than humans. They respond faster and better when there are sudden changes in the crypto market values you have. Thanks to advanced technology, computers can automatically evaluate market data and make trade decisions based on your preferences to make the most of crypto market fluctuations. Thus, once your set standards are met, the computer software can automatically execute trades that respond to your personal investment preferences.
In Summary
Every investment has its risks; thus, your effort to lessen and avoid these risks can help you gain profit. Also, automated trading works best and efficiently if you can find a user-friendly and trusted automated trading platform and then set your investment standards correctly and efficiently; thus, if you get this wrong and do not do sufficient backtesting before entering a trade position, you can still lose your investment. Remember that you have to facilitate your investment. You cannot rely fully on technology and expect high profit to come without any effort exerted on your part.