It is no secret that bots have taken over crypto trading, and those who use them are making extraordinary profits. The best part is that crypto bots are increasingly becoming accessible to more and more people, and at an affordable price. If you are looking to jump on the bot trading bandwagon, here are 5 tips to getting started with automated trading.
1. Come up with a clearly defined trading strategy
Trading bots don’t come up with strategies by themselves, they simply execute them. As such, before you start using one, make sure that you have a solid and tested trading strategy that the bot can implement. If you don’t have a strategy, get a trading bot with an in-built trading strategy that has been tested and shown to work. Some trading strategies that trading bots implement include swing trading and scalping. Do some research and find a bot with a strategy that works best with your risk appetite.
2. Research on the costs
There are so many companies selling trading bots today. Most of them are scams and are only hoping to cash in on selling the bots. That’s why they sell them at a premium. To be on the safe side, go for a bot that is fairly priced, since they give you the leeway to test them out, without losing money. A perfect example of a fairly priced bot is gunbot. Gunbot starts at as low as $0.065 BTC. That price is not only manageable, but is also a low-risk for someone getting started out in automated trading.
3. Take time to study risk management
The success of trading, automated or not, is premised entirely on risk management. Good risk management always leads to success in the long-run. As such, if you don’t understand risk management in trading, ensure that you take some risk management lessons. You can do this online via YouTube or ask a friend to help you out. Once you have internalized risk management, then you can customize your trading bot in line with it. Or you can explain the same to a programmer and have them customize it for you.
4. Always keep an eye on the bot’s activities
While automated trading means that you are free to spend your time doing all the things you love, don’t forget to keep an eye on the bot every once in a while. That’s because bugs can cause the bot to malfunction, and lead to massive losses. By keeping an eye on the bot, you can catch such bugs early, and pause the bot before it makes the wrong trades and ruin your account. The good thing is that keeping an eye on a bot’s activity is not that time consuming, and you can always do it on the go.
5. Research on the best exchanges for automated trading
Automated trading only works well if you use the right exchange, in terms of trading fees. If the trading fees are high, it might negatively affect your trading profits. As such, you need to research on exchanges with the lowest trading fees before you integrate a trading bot. The lower the fees, the better for your trading.