Executing Trade With Crypto Trading Bots

Capital Markets CIO Outlook | Monday, February 04, 2019

The limited commercial use of cryptocurrency made its heavy investment in cryptographic money forms. Every single bitcoins a heavy investment. The debate is still going on that is cryptocurrency the future money? This market is the fertile soil for different algorithmic trading tools.

The Best Tool For Algorithmic Trading

There are currently dozens of cryptocurrency trading bots range from free software that anyone can use to expensive subscription-based bots for professional crypto traders. But they vary in quality, usability, and profitability. Traders can use crypto trading bots to implement a variety of market strategies including arbitrage, market making, trend trading, and mean reversion. The benefits of using crypto trading bots can result in numerous advantages for trader including

• 24/7 global market as the trading bot can react to any market development s when a trader is away from the trading platform

• Mitigating human error by transferring the responsibility to an automated software system.

• Trading bots can respond accordingly to sudden shifts in the market.

• Offering an opportunity for the trader to perform backtesting, which allows the trader to effectively stimulate trading strategies based on historical data.

• Trading bots can introduce diversity in trading.

• Preserving a trader's discipline because with automated trading strategy is executed with maximum precision.

Check Out Capital Markets CIO Outlook’s  Top Trading Solution Providers - Pragma Securities, Swade,  Trade Ideas,...

Limitations of Using Crypto Trading Bots

Despite the benefits, there are the added risks of

• Market anomalies could result in incorrect trade being made, for instance not making a trade or making duplicate trade. Monitoring the trading bots can ensure identification and rectification of any problem.

• The implementation of a solid strategy determines the effectiveness of crypto trading bots.

• A trading bot with poor functionality and database will result in subpar trading results.

• Some bots can easily turn out to be scams, plenty of research is needed before purchasing one.

• Flash crashes/rapid decline in the price of the digital asset can occur when traders allow their bot to execute all trading operations.

If used properly crypto trading bots can be an extremely useful tool for the traders. They are effective as a trading strategy that has been laid out.

Securities