An automated process involves a mathematical formula that is applied automatically. In the context of cryptocurrency trading, automation can pertain to the use of software programmed with algorithms that assist in automated cryptocurrency trading. The process of developing automated trading strategies on an automated trading platform such as an exchange is called technical analysis. Technical analysis is based on the principles of supply and demand, which are explained in certain proportions to provide an indication of market trends. Continuously switching between different indicators can lead to the automatic execution of specific trading strategies by the use of code in the form of computer programs, similar to a computer program running with a set up algorithm.
Automation in the cryptocurrency trading realm has opened up new ways to profit, thanks to the availability of crypto bots. With the possibility to execute trades automatically and with minimal input, this type of bot has proven to be very popular amongst cryptocurrency traders. Automation is a significant issue when it pertains to cryptocurrency trading, and the discussion surrounding its benefits and drawbacks is still ongoing. The cryptocurrency community is split over what automated trading means, whether it should be done or not, how it can be done legally and safely, along with the possible risks and dangers involved.
The scope of this article will discuss automated trading, specifically in terms of day-trading cryptocurrencies.
What is Automation-Based Day Trading?
Trading cryptocurrencies has become a profitable venture for many people. Cryptocurrencies are digital or virtual currencies. The technology behind cryptocurrencies was created by an unknown person or persons under the name Satoshi Nakamoto in 2008, and it is commonly used as part of online transactions through electronic wallets. It consists of complex encryption algorithms and mathematical principles that regulate the generation of units of currency, transaction processing, and mining operations across a distributed network.
Cryptocurrency trading is a growing sector that offers profitable opportunities for investors. It is a booming industry whose value continually increases, but in order to increase this value, investors need to understand what market conditions are likely to arise in the future and take advantage of them. Unfortunately, investors who rely solely on their experience and instinct can only trade when they are in the right emotional state with the ultimate goal of making money – not only making it slowly.
Automation-based day trading is the name given to cryptocurrency trading that does not require any human intervention. However, this automated action is performed via a computer program. In essence, the trader’s strategy is fully automated with no need for human input or intuition. Ideally, the robot trades the way you want it to and makes your profits. Cryptocurrency exchange software has been designed to automatically trade for you. This is because it can detect trends, entries, exits, and profit generation.
In terms of cryptocurrency exchange software, CCTech is one of the best options because it is extremely adaptable and has an intuitive user interface. Compared to other crypto exchange script platforms, this one has more features. For developers, it is open-source and allows them to create their own cryptocurrency trading script.
Why is Automated Day Trading of Cryptocurrency Preferable?
According to a report by the CFTC, most cryptocurrency trading is carried out via bots and programs. In terms of the most popular cryptocurrencies, in 2021, millions of transactions happened on average every day. The majority of these exchanges involve bots that can trade automatically after certain criteria have been met, such as market conditions or certain time periods. Suppose Bitcoin rises by 5% at 12:00 pm and the market closes at 21:00 pm. The bot will automatically begin trading once the bar drops down again.
Automated day trading has a number of advantages. The trader benefits from trading experience that is usually gained through trial and error. The software automatically makes a profit without taking any risk. With this, the investor only needs to focus on making sure the price rises at times of high volatility. Cryptocurrency exchange script trading software requires no attention and is operated by computers.
Optima is a cryptocurrency exchange script that allows users to easily start and manage their own cryptocurrency trading businesses. This software makes it possible for anyone to compete in the digital currency market, regardless of their experience level. Because Optima’s code is completely open-source, you are free to modify it as you see fit and use it with any application of your choosing. Additionally, Optima supports both public and private API endpoints, so you can easily link it to a variety of applications.
What Factors Affect Profitability with Crypto Automated Day Trading?
Due to the limited human interaction and interaction of the factors involved in automated cryptocurrency trading, one can expect to face issues such as price increases, losses, and volatility. If a trader wants to trade with automated day trading software, he should be able to predict the outcome of his trades and use this knowledge to plan ahead. Additionally, if there is no human input or intuition involved, it is even more important that traders open a trading account with good security measures so that their assets are not stolen by hackers. Being careful when setting up an automated cryptocurrency trading platform makes traders safer and allows them to take advantage of the potential for profitability.
The profitability of automated day trading depends on the particular currency, exchange, and trading conditions. Some currencies are more volatile, and some coins are more stable than others.
Cryptocurrency trading bots have become popular due to their ability to trade 24/7 and execute trades in the absence of human interference. They can be programmed to meet certain conditions, such as market trends or specific time periods. There are many benefits arising from automation-based cryptocurrency trading, but it is important to note that these benefits come with a price. This is because the trading software requires little or no human intervention and a complete assumption of risk.