Trading cryptocurrency can be incredibly time-consuming. Before you start, you must learn the basics of trading and analysis. Then, you have to pay attention to the market and be on alert to trade at a moment’s notice when the market changes. Many people turn to automated crypto trading as an alternative to this manual management. Take a closer look at automated trading and the best way to go about doing it.
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Basics of Automated Crypto Trading
Automated crypto trading typically involves using algorithms or bots to complete trades. Most automated trading platforms have you use an API trading bot or an algorithm. You set up your trading strategy and then let it execute it on your behalf. When auto-trading cryptocurrency, you can also use smart contracts.
The biggest appeal of automated trading is its ability to save time. You don’t have to watch the market 24/7 as you know your bot or algorithm will execute the trades that you would. Some people opt for automated trading so they can profit from cryptocurrency market fluctuations even when at work or asleep. Other people use it because of trading bots’ ability to instantly execute a trade. This can be seconds or even minutes faster than if you had to execute the trades yourself; that speed helps prevent missed opportunities.
Which Currencies Can Be Used for Automated Trading?
Theoretically, you can use any currency like Bitcoin, Ethereum, USDT, etc. for automated crypto trading. You would just need to find a platform that supports the cryptocurrency in question and bots or algorithmic trading. However, most automated trading focuses on the biggest cryptocurrencies due to their higher liquidities.
Automated Trading Platforms
There are several automated crypto trading methods available, some more manual than others.
Algorithmic trading or using bots requires you to come up with a trading strategy. To use this type of automated trading, you essentially code a bot to automatically execute trades that meet your strategy.
Another popular option is copy trading. With this method, you follow the movements of a more experienced cryptocurrency trader. Every time they make a trade, your account automatically makes a corresponding one.
Yet another option is to use crypto signals for automated Bitcoin trading. Crypto signals are similar to a combination of the other two types of trading. Experts or those with more experience create the signals and offer trading suggestions. Many platforms let you set up trading signals to automatically execute on your behalf.
With most of these strategies, an automated trading platform will give you the final say. You will not be consulted before a trade is executed, but you can exit the trade, make other trades, or change how much you want to invest.
The most popular automated trading platforms are;
- Huobi Grid Trading,
Algorithmic Trading Risks
While automated crypto trading seems great, there are a few risks that you need to be aware of before using it.
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You Still Need to Watch the Market
No automated trading strategy is perfect. Even those honed by experts require additional input and adjustments. This means that you can’t just set up the strategy and leave it to run for months or even just weeks or days. You need to check on it regularly – preferably every day, if not more often. This lets you make adjustments to your strategy as the market changes.
The market is always changing, and the cryptocurrency market is no exception. This means that a strategy that worked before may not work now. In other words, you can’t program your trading bot with a single strategy and apply it to all situations: You are unlikely to make profits this way.
It Tends to Be High-Frequency
High-frequency trading is not always bad, but it comes with some additional risks. These are important to know because most automated trading ends up being high frequency.
One of the big risks of high-frequency trading is that you will accumulate a lot of trading fees. There is also a consensus that high-frequency algorithmic trading increases the market risks that are already present.
You Need Some Background Knowledge to Set It Up
One of the biggest risks with automated crypto trading is that you will not be knowledgeable enough to set it up. Remember that to create your own trading bot, you will need to have a strategy as well as coding knowledge. If you aren’t familiar enough with trading to create a strategy or don’t have coding knowledge, then this puts you at a significant disadvantage.
Why You Should Avoid Copy Trading Platforms, Softwares and Bots
Because of the above risks, it is typically best to avoid copy trading platforms and bots. There are a few main considerations here.
The most important is that you do not know the background of the trader you are copying or the person who programmed the bot, assuming it was not you. There is no guarantee they have sufficient market knowledge. Even if they have been successful in the past, that could have been luck.
What Haru Invest Can Do for You – Let Experts Handle Your Crypto
If you want the convenience of automated crypto trading but want to make a safer choice, then consider Haru Invest. This is an automated cryptocurrency investment account that uses an expert-created and maintained algorithm. You don’t have to worry about monitoring the algorithm or your account, as the experts at Haru constantly do so for you.
While you could find similar crypto investments, they tend to come with incredibly high fees as well as high barriers to entry. Anyone can open a Haru Invest account with a minimum of just $10. By contrast, most other accounts require tens or even hundreds of thousands to invest.
You can also get a feel for Haru Invest’s excellent track record via its most recent performance figures. For example, in the biweekly period from May 1st to May 15th, the Earn Like the Best (BTC) account had a biweekly return of 0.8409%. The returns were 0.6064% and 0.6231% for Surf with the Volatility (USDT) and Beyond Staking (ETH), respectively. To put these in perspective, annualized, they are 20.46%, 14.75%, and 15.16%, respectively.
Even better, you keep more of the profits as Haru doesn’t charge a management fee and only charges a performance fee on returns of over 15% APR. Even then, the performance fees are lower than the industry average at just 15%.
Using an automated investment management platform like Haru simplifies the automated crypto trading process and can even improve your metrics and investment performance.