Automated trading is steadily becoming the norm in the crypto market as traders continue to devise new ways to maximize profits. In this guide, we will highlight the pros and cons of automated trading in the crypto market as well as the features of the VCT’s auto trading system.
What Is Automated Trading?
As defined by Investopedia, “Automated trading systems refer to mechanical trading systems, algorithmic trading, automated trading or system trading — allow traders to establish specific rules for both trade entries and exits that, once programmed, can be automatically executed via a computer.” This is an established system in the stock market and automated systems execute 75% of trades on the US stock market.
This is, however, a different ball game in the crypto market as traders increasingly realize the benefits of utilizing auto trading systems in a volatile market. Unlike traditional markets, the crypto market is known to run 24/7 and the opportunities to make profits come in a flash. Therefore, manual trading is becoming outdated since it is almost impossible for the human brain to stay ahead of the crypto market.
What Are The Pros And Cons Of Automated Trading?
As mentioned above, profit-making opportunities in the crypto market come thick and fast. Traders that are brave enough to take advantage of every opportunity will, unfortunately, spend his/her whole day analyzing charts and price trends. However, the human brain is not built to withstand such unpleasant conditions as it is very likely that fatigue will set in, which will, in turn, affect the decisions of such a trader.
The obvious solution lies In the implementation of algorithms that allow a trader to enter trading rules and analysis that will guide its actions while trading. In other words, the program will use the analytic rules you have set as a guideline for every decision it makes and this is done in seconds. Since the algorithm is utilizing specific guides, its decisions are not susceptible to emotions. In contrast, traders that are yet to master the ways of eliminating emotions when making decisions are at risks of making the wrong calls.
This is more useful when you are trying to track and capitalize on the price movements of more than one cryptocurrency. Technical analysis predominantly involves mathematics, therefore common sense dictates that computers will do a better and faster job when it comes to this sort of analysis.
Nonetheless, the actions or the inactions of the system depend on the rules and analysis, which guides the operations of the automated trading system. As such, entering inaccurate analytics into the algorithm or the change in market trends will cripple its effectiveness. Also, we have witnessed over the years that the instantaneous processing power an automated trading system exhibits can also serve as its downside. This is true when the analytic guide of the algorithm is either inaccurate or outdated. As a result, a trader could incur steep losses in minutes. Apparently, existing auto trading systems are yet to incorporate machine learning that will improve their adaptability to different market trends automatically.
However, traders can mitigate the effect of the various downsides of automated trading systems by using risk management practices like stop loss. It is possible that traders are unable to foresee events that will trigger loss-incurring domino effects in the crypto market, which becomes more pronounced when utilizing auto trading features. This is why it is imperative to follow and implement risk management rules and features.
VCT’s Auto Trading Features
We at VCT have come to realize that auto trading systems are one of those tools that give traders an edge in the crypto market. As such, we have set up our service plans to include auto trading features that will utilize trading bots. Apparently, this solution gives our esteemed customers the chance to take advantage of superior ability in making quality calls 24/7. By so doing, we have remarkably increased their chances of maximizing profits.
In order to counter the limitations of auto trading systems, we have set up ours to exclusively run on the analytic rules which our trading experts consistently update to reflect market trends. As expected, this removes the burden of algorithm tweaking from our customers as their trading bots only need to copy signals our trading experts post on the crypto exchange. Therefore, our members instantaneously capitalize on our every call without the hassles that come with manually trading crypto.
Obviously, the capability of our auto trading system or trading bots to bypass the risks that come with automating trades and its beneficial effect on the earnings of our customers makes it an innovative inclusion to our crypto trading services and solutions. This feature is available in all our service plans (Gold, Silver, Bronze, Margin Trading and Platinum Plus) and it conforms to our goal of giving our customers a stress-free trading experience.