Crypto automation might sound like something from a sci-fi novel. Even though crypto automation processes are not innovative, many traders do not use their potential. Some traders do not trust automated trading bots or AI in general. Others, in turn, missed the moment when bitcoin automated trading emerged and became an equal actant of economic processes. And some traders lack the understanding of what benefits projects as zignaly.com bring.
A trader cannot be late with understanding the principles of automated crypto trading. In the end, only two ways can bring automated crypto trading to your business. And those two ways are:
1. Entirely Automated Crypto Trading Mechanisms
The concept
The ideal robot would decide all FX processes from first to last. Such choice implies:
- Market analysis by a robot alone;
- Using robot’s predictions of market alterations;
- Setting most favorable transaction parameters automatically;
- Having a crypto trading algorithm created by AI;
- Perchance, making the bot operate valuable documents (for instance, futures, equities, and so on);
- Having the bot decide when to purchase or sell crypto or exchange coins.
That saves eons of time for a trader. If you suppose that it sounds like a dream that is suspicious to have certitude about, you might be an empath. Indeed, giving axiomatic credence to a robot is not what a connoisseur would do. Moreover, believing that auto buy and sell crypto will bring you life-changing amounts of cash is a way to lose your last stashes. The thing is, fully automated bots are adequate for stable periods. Yet, with rapid changes in supplies and demands, stability is not a prerogative of the crypto market.
Fors here
If you go for ubiquitous crypto automation, you will get a row of wins:
- Not having to sit all day and stare in tables and analytics;
- Trying various FX strategies;
- Delegating tasks by having order’s opening and closing processes automated;
- Not having to operate anything manually.
The last advantage can save your life-changing deal when there are external drawbacks that you cannot control. For instance, imagine that you are in a crucial moment. Suddenly, you get cut off because your Internet acts. If your robot functions with a full crypto automation set, it will salvage your deal.
Against now
Yet, never underestimate drawbacks. Totes automated cryptosystems might not be accurate when it comes to crises. For instance, the robot might miss breaking news about drastic upswings of the currency. Or it can neglect an emergency that leads to negative results. Then the bot empties your stash for objects that have a value close to zero.
Of course, the most precise and accurate bots cost tons of money. A one-time purchase is a rarity in this case. And even if a developer offers it, it might cost a fortune. Most likely, a subscription to such a program will take your money every month. And budget programs might make your trading a disaster.
2. Partly Automated Crypto Trading Systems
The concept
The principles of functioning do not differ drastically. A half-automated trading app provides predictions and stuff. Yet, resultative actions like purchasing and selling remain a trader’s task. The managing trader solely notifies the subscribers about alterations on the market. The businessperson who gets the mail still decides their actions alone.
Wins of this choice
- A trader does not have to spend all day staring at databases and analysis reports. Still, there will be independent analysis, bit its time gets cut by a third or even a half;
- No one cancels trying novel strategies; a trader will have options, but they still decide the path of trading alone;
- Occasional manual operations have the potential to be more lucrative than automated ones;
- Reputable developers do not make their clients pay for apps before clients make a profit;
- Minimizing the risks;
- A more comprehensive ecosystem. A trader becomes an actant of all processes, as they do not entrust their resources to an AI mindlessly.
Drawbacks
The drawbacks are minimal if a businessperson goes for partial automation or trading processes. Of course, the first negative is that a trader still must spend their time analyzing. They have to be aware of all changes, shifts of courses, and expert predictions. Another negative is that not all bots allow green traders to use them for free until they attain a profit.
Is the Game Worth the Candle
On the one hand, automated trading has a lot of advantages. On the other hand, it’s definitely not a panacea, especially for beginners. From the point of view of identifying insights in large data sets and the reaction rate, algorithms that use big data analysis, neural networks and machine learning are beyond competition. However, many automated trading systems have disadvantages other than those listed above, such as:
- conduct analysis only in hindsight;
- make “survivor error” (draw conclusions only on the basis of positive results);
- overtrain and adjust trading strategies on the basis of erroneously detected patterns;
- do not take into account the broader market context and rely only on trading data.
One should also keep in mind that a ready-made bot is, in a sense, a pig in a poke – the effectiveness of the system is difficult to predict, much less guarantee. Let us not forget that in the world of cryptocurrencies, the giants of high-frequency exchange trading, including Jump Trading and Tower Research, came, and trading platforms based on artificial intelligence are constantly being improved. And it’s the top players in the market that will skim the cream off it.
Bottom Line
As of today, robotized trading solutions are at least capable of freeing people from routine tasks, offering them trading strategies, and insuring against capital losses due to market fluctuations. It absolutely makes sense to try robot-advisors. However, it is premature to completely surrender exchange operations to software.
