Thu, 28 Sep 2023

Contemporary retail traders are completely different from their colleagues that worked several decades ago. Rudimentary versions of modern automated trading software started appearing only at the tail end of the 1980s and were very expensive. Fast-forward to 2023 and millions of people have access to cheap forms of automation.

Even a free crypto trading bot can be used to improve the efficiency and consistency of any trading strategy devised by a smart investor studying the nuances of technical analysis. If you have a good system that allows you to predict the direction of the market more often than not, you can use bots to increase your earnings while bettering risk management.

How automation helps modern traders

There are two key reasons to use bots in trading:

  • Consistent performance. Bots do not hesitate, doubt, or make decisions that do not fall in line with the strategy. This consistency is essential for many financial markets and creates a solid foundation for reliable money-making in the long term.
  • Fast reaction. Removing any time waste from the equation grants traders another great perk - faster reaction to market changes. Human traders need to do everything manually while automation ensures that you are among the first who make the move.
  • By focusing on using these two advantages appropriately, you can dramatically increase your earning potential. On the other hand, a contemporary automation platform such as WunderTrading provides much-needed flexibility by giving users access to customization tools and offering advanced features for power users.

Using bots is essential when you are dealing with rapidly changing, highly volatile markets focused on derivatives like futures and options. Time is of the essence when you want to outperform experienced speculators.

How to make your strategy profitable

By using free automated trading software, you can focus on improving areas of your trading system that do not require physical prowess or advanced technology at hand. While it can be quite hard to improve your reaction and decision-making speed, a lot can be done to increase the efficiency and reliability of your trading system in general.

Every single contemporary strategy revolves around using an algorithm based on technical analysis which is focused on finding patterns in the market. Without spending too much time trying to outperform the market, you should instead learn better strategies and methodologies to make your automated system more consistent.

Several important aspects make a modern strategy powered by automation tools profitable:

  • A reliable provider of automation services;
  • A strong trading strategy based on advanced indicators;
  • A good portfolio management style allows for diversification.

Let's talk about each aspect in a little bit more detail. Why should you use a reliable provider for your automated crypto trading routines?

Which is the best-automated trading robot?

Software-as-a-service is the most popular model for many tech startups for a reason. The software can be easily served millions of clients with relatively low expenses related to scaling up the business. While it means that good companies reach a wider audience quickly, it also helps bad apples to dilute the offer and reduce the average level of quality.

Selecting a platform that delivers a good product that can be used by a diverse selection of users is not an easy task. There are several things that you should be acutely aware of:

  • The UX/UI design. Using a digital tool that you struggle to fully comprehend is not efficient. It is a chore that quickly turns into a burden instead of simplifying your life and investment efforts. Choose companies that have a really good dashboard and detailed tutorials.
  • Versatility. While having a good script-writing toolkit and a good backend architecture to support a reliable automation product, you still need something more to increase consistency. Preset solutions like GRID and DCA bots, social trading, and other forms of diversifying a portfolio should be present alongside the main service.
  • Integrations with other platforms. Providers like WunderTrading work directly with advanced and hugely popular platforms such as TradingView, a feature-rich online charting instrument with myriads of indicators, and a variety of centralized crypto exchanges and brokerage service providers. It is something that you should demand from an automation vendor.

Choosing the right strategy

It is crucial to continuously improve your knowledge about the world of finances and learn new techniques in technical analysis, but the main focus of any investment endeavor is to achieve a certain level of profitability. Even novice traders can search for good systems that users post for free on the TradingView platform.

By choosing strategies that were selected by the community and back-testing interesting systems against the price history, you can find a working system even without understanding how the market works or studying fundamental analysis.

Try selecting already existing scripts, technical indicators, and strategies. Focus on filtering out poorly performing systems by looking at feedback generated by users and testing them on your charts.

Diversification and money management matter

Even the best crypto trading bot won't save your portfolio from a collapse if you do not use basic risk-mitigation techniques. It is important to focus on creating a robust portfolio with only a certain portion of it dedicated to a single automated strategy.

Bots can help you diversify without venturing into other areas of finance. For example, contemporary cryptocurrency trading software may be used to work with different types of strategies, assets, and approaches. You may utilize conservative methods like DCA buying and engage in risker strategies like swing trading or scalping.

Finding the balance

When dealing with highly volatile assets like Bitcoin or Ethereum, it is important to find a good equilibrium and create a portfolio that utilizes different types of risk mitigation techniques. A bitcoin robot can be used to employ a large selection of widely different investment instruments.

You should consider using services from companies like WunderTrading to incorporate advanced trading methods into your overall investment strategy and create a balanced automated trading system that focuses on addressing all three aforementioned aspects: the efficiency of bots, the profitability of a chosen strategy, and the necessity of diversification.

Finances should be contemplated too. Do not spend money on instruments that you do not fully comprehend or cannot use efficiently. The learning curve for automated trading systems is not steep yet must be dealt with before you start using your hard-earned capital on bots. Consider using free bot services. For example, WunderTrading has a basic plan that comes at no cost and allows users to run up to five bots simultaneously.

Also, focus on learning how to use TradingView and test as many strategies as possible for as long as possible before incorporating them into your system.

In conclusion

Thinking of modern automation for trading as a miracle that can solve all your financial problems is not a good idea. It is a powerful tool that must be used purposefully. A trading bot for crypto must be utilized as such and improve certain aspects of your investment activities. It cannot and should not substitute a true strategy.

If you can use these advanced tools correctly, you will be able to create a reliable strategy that generates results consistently.

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