Investors benefit from algorithmic cryptocurrency trading programs under many different circumstances, but particularly when trading Bitcoin against other “altcoins”.
Bot trading greatly reduces user error, while providing much more rapid processing of information – which automates trading for those with limited skills in this space. The potential in the crypto markets to successfully trade using trading bots is great due in part to their immature nature.
Cryptocurrency Trading Bots
Cryptocurrency trading bots have been around for decades, and are being used in stock markets more and more. Crypto-currency markets are less than a decade old and only just now are speculators entering the trade space. Given the inexperience of trading combined with unfamiliarity with cryptocurrency in general – trading platforms can be a profitable option for minimizing risk and maximizing potential.
Bot trading can be profitable beyond a short period of time because it involves a sort of insightful arbitrage. Traders can use off-the-shelf solutions, though relying on pre-made software programs can prove dangerous. Trading bots are not “fire-and-forget” missiles – they must be monitored and tweaked by developers constantly.
Another reason crypto traders benefit is because markets are not yet dominated by high-frequency computers – as is traditional trading. Large investment banks spend millions of dollars on supercomputers to have a competitive edge over other traders. This is not yet the case in crypto markets, but it is only a matter of time.
Cryptocurrency Trading Platform
Most cryptocurrency trading platforms offer a variety of advantages, not least of which is diligent trades on your behalf, 24/7, and the ability to remove all of the emotion from trading. Successful trading requires knowledgeable platform developers and trading algorithms which employ winning strategies. These elements are attractive to those who do not have the skills (or the nerve) required to trade individually.
Whether or not you decide to automate your trading by joining a platform, or to buy and hold – acquiring Bitcoin could be a very wise move. The basic rules apply: don’t buy or invest more than you can afford to lose and don’t go into any investment without at least a basic understanding of the asset.