Tips for Cryptocurrency Bot Trading
No, really. Bots are a thing in crypto. Here are some tips for cryptocurrency bot trading, if you're curious about how this works.
Most people who want to begin investing in cryptocurrency tend to do it the "old fashioned way." They may invest in Bitcoin mining hardware, buy up Bitcoin and HODL it, or they might choose to invest in Bitcoin production without even owning it—if they're skittish about it.
There are many beginner's crypto trading strategies that could make you a wealthy investor. Some of them involve creating bots that will do the trading for you, and if you think about it, this could make a lot of sense.
If you're interested in using bots for cryptocurrency trading, you need to know what you're doing. Here are the best tips for cryptocurrency bot trading we could find.
Before we can offer tips for cryptocurrency bot trading, let's talk about what bot trading actually is. Bot trading, pure and simple, is letting a computer program do the cryptocurrency trades for you. In this manner, it's no different than using a robo-investing app on the stock market.
Bots work by connecting to exchanges like Coinbase and then carrying out the orders by the parameters you set. Using a bot to automate part or most of your trades is totally legal, and can actually save you a lot of time.
BTC Robot and Cryptohopper are two major bot names that have started to gain traction. They both require you to buy a subscription to them in order to succeed. Now that you understand what they do, here's how you should go about finding the right one for you and make it work.
First things first, understand that there are a LOT of scams here.
The biggest tips for cryptocurrency bot trading will tell you that the bot you choose makes all the difference. Just like there are tons of Bitcoin wallet scams, there are tons of cryptocurrency bots that are totally useless and at times, downright scams.
Really, grill the company that you want to work with. Read up on them, ask people in crypto forums what they think. Never trust a bot that has a bad reputation. No matter what trading platform you use, crypto bot you want, or digital currencies you want to invest in, it's best to look before you leap.
If you're not interested in paying for a service, you might want to just DIY it. You might actually have better outcomes with this, simply because you don't have to worry about a third party screwing you out of money.
This YouTube tutorial shows you how to program your own trading bot, and offers tips for cryptocurrency bot trading platform making for more advanced individuals.
Setting up your bot means you'll need to be extra careful.
Let's offer up some cybersecurity tips for cryptocurrency bot trading, okay? Here are the biggest ones to remember:
- You will need to create API keys and secrets in your cryptocurrency exchange in order to set up your account. These keys and secrets act like passwords, and you should never share them with anyone. If someone gets a hold of your API, they can trade on behalf of you. Not good!
- Additionally, you should never give your bot permission to withdraw funds. Should your API keys get into the wrong hands, this would allow scammers to withdraw funds from your bank account. By not allowing them to withdraw, you limit hackers to just making bad trades.
- Two-factor authentication is crucial. No two-factor authentication means that it's easier than ever for scammers to hack into your stuff. Don't make it easy for them.
Most cryptocurrency bots use past trends to trade on future investments.
One of the best tips for cryptocurrency bot trading is to understand how they make those trades. Most bots work by simply doing backtesting. Backtesting takes historic data and extrapolates "lessons" that help it maximize profits in the future.
You should definitely allow your bot to do backtesting if you want better gains. Most coins are relatively cyclical in nature, which makes backtesting useful. However, there's something to be said about investing in crypto: you can't always expect the future to be like the past...
You also should understand that crypto trading bots aren't infallible.
We love to think that the bots we make are infallibe, but they really aren't. There will be market fluctuations that will cause your bot to trade and incur losses.
This is normal, and truth be told, losses will happen regardless of what you invest in. No bot will be able to predict gains and losses 100 percent well. If you notice mismatched trades once in a while, don't panic. Ride it out!
You also might end up having to manually make trades—or at the very least, should consider it.
The funny thing about using a bot is that you don't always have the bot doing the trades for you. If you're not 100 percent sure you're ready to let the bot trade, or if you choose certain bots to do your trading, you may have to be the one who pulls the trigger.
Truthfully, you shouldn't let the bot do all the work for you. One of the best tips for cryptocurrency bot trading is that you should think of the bot as a helper rather than a "do it all-er."
Don't be afraid to use your own strategy.
Investing is very unusual in its nature. When everyone does the same thing, it tends to cause serious chaos that plays out in a panic and crash. The same can be said about traders who tend to follow the herd. If every single trader who does bot trading is using the same platform with the same strategy, it's not going to end well.
Use your own strategy, and don't be afraid to buck the trends. Sometimes, it's the smartest thing you can do. Sure, this may sound like one of the more bogus tips for cryptocurrency bot trading, but trust us, you'll thank us when it works in your favor.
Doing something as simple as including signals, learning technical analysis, and switching up strategies from time to time can help you maximize profits and avoid pure chaos on the trading floor.
Finally, use common sense.
All the tips for cryptocurrency bot trading can't really replace common sense. If the things your bot is doing aren't making sense, choose a bot that uses a trading strategy that makes sense to you. If the bot you made doesn't work, consider getting a premium bot instead.
At the end of the day, trading crypto is a personal investment journey. Neither bots nor experts will be able to tell you what's the right move for you. That's something only you can do.