Previously a foreign concept, bot trading has in recent times gained popularity amongst forex traders. For persons keen on making money while they sleep, automated trading may suit you best. This style of trading entails breaking down your strategy into entry and exit points, using real-time market data and technical indicators.
A program then monitors live market data emanating from crypto-exchanges and executes trades as per your pre-defined parameters. Currently, the auto-trading industry is awash with developers claiming to provide the best bots, but none gets close to Gunbot.
Let’s explore the pros of employing bot in your trading plan.
1. Crypto-trading bots eradicate emotion
Emotions play a significant role in trading decisions. How often do you lower your stop-loss because you were confident the asset would recover? How many times did you hold on to a position past your predetermined profit target only to end up losing?
A robot trading system requires that you outline your stop losses, buy signals and profit targets in advance. Trading bots execute trades as per your rules and eliminate emotions from the picture.
Automated crypto-trading prevents you from getting cocky while on a winning streak or overcompensating trades when the market moves against you. In the long-run, this consistency goes a long way toward improving your bottom-line.
2. It’s possible to test your trading strategy profitability using historical data
Just about all automated trading systems and trading bots come with a built-in back-tester – a tool that simulates a strategy’s performance against historical data to establish its risk and profitability.
Upon running the back-rest, the program’s statistical output aids in determining your strategy’s effectiveness.
Among the essential metrics to consider include:
- Win/loss ratio
- Trade volume
During back-testing, we suggest that you minimize risk as much as you can before engaging in live trading. Failure to reduce risk will result in unexpected losses despite back-testing results establishing your trading strategy to be effective.
3. Trading bots run 24/7
The obvious perk of automated crypto trading is the ability to execute trades 24/7/364. Crypto-exchanges never shut down which raises your odds of making profits. Additionally, it’s also possible to configure and trade across several trading pairs.
4. Improved order execution and trading speed
Crypto bots allow you for timing your entry and exit points more efficiently compared to when trading by hand. Bots also eliminate the need for you to stay logged in across several exchanges, thus allowing for order placement faster and raise the odds of making gains.
5. Real-time notifications and detailed reports
Keeping track of all transactions by hand may prove too much. However, Gunbot avails a handy dashboard that summarizes gains/losses for all your trades.
When configured appropriately and back-tested, crypto-trading bots may prove worthwhile for retail traders. Understand the working of your strategy in a bearish, bullish and sideways market before taking the plunge. Back-testing your trading strategy is among the most effective ways to test your approach.