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The Advantages of Automate Trade in Cryptocurrency Markets

Ruby Layram Finance Editor Author expertise
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The cryptocurrency markets operate 24/7 with no bell to signal the start and end of trading. The endless rise and fall of digital assets, as they plot new lines on charts, retrace to old levels, and break through resistance, is meat and drink to expert traders. But increasingly, their ranks are formed not only of solo traders grinding it out on centralized exchanges and DEXes but also of bots executing automated trade strategies.

It’s easy to discern some of the primary advantages of using a bot to automate trade crypto assets, not least their ability to operate around the clock without fatiguing. But the benefits of automated trading go deeper than that. Bots are the greatest thing you can do to increase your trading profitability.

More Trades, More Profits

The most compelling reason to automate your crypto trading is the improvement it will make in your PnL. Bots can execute more trades, more frequently, and with greater accuracy. They can enter and exit positions based on price targets and trading signals rather than emotion. In eliminating human psychology from the equation, a bot can implement trades based on TA alone. As a result, a bot can outperform even the best traders over time.

The advantages of bot-based trading aren’t just limited to overcoming inherent human weaknesses. Automated trading systems also support strategies that are time or trading frequency-dependent. This type of trading is suited to bots, which can be programmed to perform the same task repeatedly, accruing profits every time an asset moves between two target price levels. When properly optimized, a bot will handle these trades with precision and unrivaled profitability.

Asset Management in One Place

The longer you spend in the crypto market, the more exchanges you will come to use. In time, you’ll likely have several centralized exchange accounts for accessing specific cryptos and markets and may also undertake some of your trading on-chain through DEXs and AMMs. The result of all this exchange-hopping is that your portfolio can become fragmented, with assets stored in different web wallets and platform accounts.

This is an area where automated trading bots can provide greater efficiency. The best-automated trading platforms allow you to connect to multiple exchanges via API. After creating an API key with the exchange, say Binance or KuCoin, you enter this information into your automated platform. In doing so, you grant its bots permission to trade on the exchange using your funds and, critically, using your instructions.

More Money Made Through Automate Trade

Ultimately, the greatest case for exploring automated trade tools such as bots is their ability to beat the market. After all, isn’t that the point of crypto trading: to make money? More powerful and user-friendly than ever, modern trading bots can execute tasks more efficiently than humans. Automate a DCA bot, and it will buy and sell a particular asset on your behalf over and over, buying when it falls in price and selling when it increases. Or implement a copy trading that will automatically replicate the trades shared by professionals whose trading signals you follow.

For convenience, profitability, and versatility, automated trade tools make sense. Whether you’re a relative newcomer, looking to copy professional traders, or an experienced trader determined not to miss another breakout, there’s an automated trading bot for that.

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Ruby Layram Finance Editor

Ruby Layram Finance Editor

Ruby is a Finance Editor who has 5 years of experience in the finance and cryptocurrency space. Ruby attended the University of Winchester where she received a BSc in Psychology. During her studies, Ruby developed an interest in financial psychology and began writing content around the topic on a freelance basis.  Whilst she was studying for her degree, Ruby spent time learning about personal finance, investing and trading. She has written content for The Motley Fool UK, Bankless Times and Cryptonary where she also worked as an editor. Her interest in cryptocurrency came about after writing a piece for The Motley Fool about the rise of CBDCs. Since then, Ruby has actively invested in the crypto market with a focus on long-term investing.  Ruby is also an experienced trader with good analytical skills. She has used a used a variety of platforms and tools to trade and has first-hand experience with many of the platforms that are featured on the Trading Platforms website.