Cryptocurrency trading has been challenging before. It takes a lot of effort and resources as it requires you to spend a lot of time researching and looking at the cryptocurrencies you are trading. Fortunately, everything changed when automated cryptography became possible.
If you have heard of it and plan to use it to your advantage, here is a short guide to help you through this process:
Automated Cryptocurrency Trading
The automated crypto trading process is simple. First, create an account with a Cryptocurrency trading with AI platform. You then select the bot, algorithm or program to do the trading for you. Next, you will need to configure the parameters of the bot you have chosen to mimic how you would trade and decide what to do with your account. However, the challenge lies in which automated crypto trading platform you will trade on and which bot you will get.
Please note that each platform has its unique characteristics. Some can be great for traders who are clueless about presetting a trading bot by providing them with valuable and handy presets. Some can be great for having multiple trading bots and experimenting with parameter settings. And others may have great crypto rates, which is great for those who are willing to risk what they have for big rewards.
So before you invest in a platform, make sure you do your due diligence. First, find reviews online about which platform is right for you. For example, if you are a beginner, focus on platforms that offer many flexible presets. On the other hand, if you want to learn about bots, there are platforms for that. The strengths of these platforms lie in providing users with digestible visual information that helps them understand trading and set up their automated bots.
Fund an exchange account
Please note that you need an exchange account before you can trade. Typically, automated trading platforms are associated with exchange companies. This partnership results in you having an exchange account with this partnership before you can trade on your trading platform of choice.
For those who are not familiar, a cryptocurrency exchange company is usually an online marketplace. One difference is that this market allows you to buy cryptocurrencies using fiat money that you can use to trade later (eg USD, EUR). Some exchange companies also allow you to convert or exchange your cryptocurrency for another cryptocurrency. If you have traded before, these companies are brokerages.
Note that if you don’t already have a crypto wallet (the place where you can store your cryptocurrencies, as opposed to block chains which are decentralized), you can set up a wallet hosted on the exchange of your choice. Another thing to note is that there are three types of crypto wallets: hosted, non-custodial, and hardware. Some organizations may categorize these types differently (ie software, hardware, and paper). However, for the sake of simplicity, just focus on hosted wallets from an exchange.
Fortunately, it is easy to create an account with these exchange companies. All they require is your name and email address. Once you sign up with them, you’ll need to activate or confirm your account by following the instructions they’ll email you.
Registration on the platform
Signing up is a breeze if you have a preferred trading account for the automated trading platform of your choice. Usually all you need to do is sign up with your email address and create a password. Then you will need to connect your cryptocurrency purse. Once you are done, you can continue with choosing and configuring your bot or algorithm.
The most significant difference between manual and automated trading is the immense power of the bots. Unlike humans, bots can scan hundreds of charts and identify all the favorable signals on a daily basis, which can be impossible for ordinary people to do. And that is why bots are incredibly advantageous in trading, particularly when trading cryptocurrencies, where you need speed and accuracy to make a profit.
Please note that on some platforms, you may need to choose the bot before connecting your wallet. However, remember that the bot you can use depends on the platform you have registered on. Therefore, along with platform research, you should also look for information about the bots or algorithms that you can use on those platforms.
Once you select your bot, it’s time to configure it. Again, if you’re brand new, it’s highly recommended that you use presets. While most presets will probably keep you from losing money quickly, these presets will only give you smaller returns. Instead, consider trading presets for now until you understand how each of your parameters works.
Also, do not forget that trading bots are not free. Some may require a subscription, while others operate on a profit-sharing business model. In fact, there are free and open source bots and algorithms. However, remember that not all platforms allow its use. Not to mention, they often require an advanced understanding of algorithms, programming, and trading, which can be a huge hurdle for beginners.
Once you get through that, all that’s left is to let the bot trade on its own and come back to see if it worked. As a disclaimer, this is a very quick and easy guide. However, automated crypto trading has many nuances and intricacies that you need to understand before amassing tons of crypto in your wallet.
Reef, Nathan. “Cryptocurrency Exchange”. Investopedia, July 13, 2022. https://www.investopedia.com/tech/190-cryptocurrency-exchanges-so-how-choose/.
Rosenberg, Eric. “Cryptocurrency Wallet”. The balance, July 1, 2022. https://www.thebalance.com/what-is-a-cryptocurrency-wallet-5216017.
Tradingbotguru. “What are trading bots and do they really work?” Medium, January 24, 2019. https://medium.com/@tradingbotguru/what-are-trading-bots-and-do-they-really-work-9334b47314c3.
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