Automated Trading Systems: The Easy Way to Trade in Cryptocurrency - Coindoo

Automated Trading Systems: The Easy Way to Trade in Cryptocurrency

Editorial Team Avatar
Jan 8, 2019
6 min reading time

Over the past few years, cryptocurrency has risen in popularity immensely. The continued growth of digital currencies such as Bitcoin means that crypto has secured its place as a new, exciting, and secure form of investment. Cryptocurrency is one of the fastest growing industries today, with millions being invested all around the world.

Bitcoin became the most well-known and mainstream cryptocurrencies after experiencing a huge increase in price over the past few years. It has even created a multitude of new millionaires for the millennial age. But Bitcoin isn’t the only cryptocurrency out there, there are actually many other digital currencies (often referred to as ‘altcoins’), although Bitcoin is probably the only one that has become a household name.

So, why exactly do people invest in the digital currency market, and what exactly is an automated trading system? We’re going to explore these questions in the next two sections and explain the advantages of using these automated systems.

Why do people invest in the digital currency market?

With such a large amount of investment opportunities being severely limited to everyday enthusiasts, and out of the reach of many people, cryptocurrencies can offer a brand new, and much more secure opportunity for investors who want to try crypto exchange markets, crypto casinos, crypto sports betting sites or something entirely new like the bitcoin prediction market Fairlay.

The growing mainstream acceptance of cryptocurrency has opened up the world of digital currency investment to people who never thought they’d be able to successfully invest their hard-earned money. With the many stories circulating about how early adopters have managed to make millions out of pocket change from simply clicking a few buttons online, it comes as no surprise that more and more people are hoping to follow in their footsteps.  

Now is the ideal time to invest in the digital currency market and seek out returns on both short and long-term investments. But what about those who find the process complicated and frightening? That’s where automated trading systems come in to play, which we’ll explain in the next section.

What is an automated trading system?

Automated trading systems (also known as mechanical trading systems, algorithmic trading, automated trading, and system trading) are, simply put, one of the easiest ways for newcomers and veterans alike to develop a diverse and strong portfolio of digital currency.

Using advanced data and security analysis an automated trading system is able to detect both familiar and unfamiliar trends across the whole of the cryptocurrency market. They can then cross-reference any information acquired with backed-up data about past trades and investments. Through this process, it’s possible for an automated trading system to establish volatility levels and determine the most secure trades.

An automated trading system allows traders to establish very specific rules and conditions for use in both trade exits and trade entries. Once these rules and conditions are programmed, exit or entry trades can be executed by computers, entirely automatically. These rules can be based on very simple conditions (such as information about moving average crossover) or they can be based around complicated strategies.

Using this these systems is easy and secure to complete even the most arduous tasks; even tasks which seasoned traditional traders would struggle to replicate. These systems typically require the use of special software and all specific rules created will usually have to be written in the proprietary language in use on each individual platform.

Automated trading systems have so far proven to be extremely popular across the board, with everyone from retail traders to wealthy institutional investors taking part in their usage.

What are the advantages?

So, now that you have a brief understanding of why people are interested in investing in the cryptocurrency market, and why many choose to utilize the advantages given to them by automated trading systems. Let’s take a look at the specific reasons why they’re so popular, and how they could help you in trading digital currencies.

Maintaining consistency

Having a programme do the majority of the work for you ensures that maximum consistency is kept throughout the whole of the trading. Utilizing automated trading systems correctly can massively improve consistency across the board.

Improving discipline

Sticking to your trades can be tough, even for veterans. Even in the most volatile of markets, you can be positive that automated trading systems maintain the strictest levels of discipline. A computer can’t fail when it’s been programmed with established trade rules and the ability to perform automatic executions.

Complete removal of emotions

Automated trading systems help to entirely eliminate emotions, one of the biggest hindrances to traders around the world. Your gut instinct might steer you well in some situations, but with finances, it’s best to stick to the cold and calculating programming of the machine. Not only will this get rid of any potential stress, but it’ll also get rid of your FOMO (fear of missing out).

The diversification of trading

If you were to ask any wise trader what the key to trading and investing is, they’ll tell you it’s diversifying. Automated trading systems can effortlessly tackle this for you in a variety of fluid and interesting ways. Multiple assets and various strategies can all be controlled by the system, so you can easily handle any number of cryptocurrencies.

Order entry speed

Another common piece of knowledge in trading is the fact that the market can change fast, at any second. Computers can respond to this kind of action much faster than even the most hardened trader. Automated trading systems are able to generate orders instantaneously, as soon as criteria are met. Another positive feature is the fact that they can even get out of trades quicker than a human.

That’s the end of this article, hopefully, you’ve learned a thing or two about automated trading systems and how they can help you in investing and trading in digital currencies. Remember to always do your due diligence and research when it comes to any kind of online buying and selling, even if you’re lucky enough to have a machine at hand to help you!

* The information in this article and the links provided are for general information purposes only and should not constitute any financial or investment advice. We advise you to do your own research or consult a professional before making financial decisions. Please acknowledge that we are not responsible for any loss caused by any information present on this website.
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