When it comes to finding the right trading bot there are a lot of different factors to consider. The market has more options than ever and depending on your familiarity and technical prowess, you could find that some bots are beyond your level of understanding. To avoid these concerns and wasted time, effort, and money, you should consider some key aspects when making your decision.
Why You Should Consider Using a Trading Bot
If you are unfamiliar with a trading bot, it’s simply an automated system that can be preprogrammed to execute trades based on various factors. The main advantage of using a trading bot is that you free up your time. You also remove any emotion from your trading and ensure that you don’t miss any opportunities.
Picking the Right Trading Bot
When it comes to finding the right trading bot, its all about understanding your trading strategy. Are you the type of trader that conducts trades daily, weekly, or maybe just one a month? These factors and others play a vital role in your choice. Here are the top factors you should look into when choosing a trading bot.
The first thing to consider is the cost of the trading bot. The price of trading bots varies significantly. There are some that are pay per use and others that charge subscriptions. You also have some platforms that offer a demo or free trial period. There are even lifetime subscriptions available to those seeking long term options.
Never get a trading bot that costs more than you can currently afford. Yes, its true if used correctly you can secure more returns on your trades using a bot. However, sustainability is the name of the game when discussing trading bots. Your trading career will run into some problems if you have to fork out a subscription that is more than the profits you made trading. As such, it’s recommended you start with free trial and demo accounts until you are confident in your bot skills.
Cloud or Software
Its also vital to think about the technical requirements of your bot. There are some bots that run on your local hardware. These bots can require certain criteria including particular versions of operating systems, processors, and more. Cloud-based bots don’t require any of these things since they are hosted off-site.
You should also see if your bot has a mobile app. Bots with mobile apps provide you with more flexibility on the go. They are also much easier to work with than desktop versions because the apps are built to be simplistic, however, they offer fewer features. Depending on your setup and how often you want to monitor your bot, you could find cloud-based bots easier to work with in terms of setup.
Its important to understand that setting up your bot can require technical skills depending on the platform you select. The best options for new users are pre-configured bots. These bots are already setup so that you simply tweak their setting a little bit to customize their trading.
The most advanced bots require some form of programming. While these bots require some skills to set up, they also offer the most flexibility in terms of options and services. If you’re new to the bot game, start off with a preconfigured bot but once you have mastered that skill, it’s time to upgrade to a fully programmable bot. Best of all, you can even sell your bot settings on the market on some platforms.
It’s also a smart idea to consider what trading platforms your bot can work with. There are bots designed specifically for a single exchange like Coinbase, while others can service a wide variety of exchanges. If you’re considering trading a lot of altcoins, you need to verify that your bot supports the coin and exchange you desire. Notably, some bots charge for the ability to trade more coins and across more exchanges.
There are some trading features that have managed to become very popular across most trading bots. Features such as the trailing stop loss enable your bot to slowly adjust your stop loss to lock in the day’s profits. There are also bots that support shorting features and more.
The best bots will enable you to program using advanced charting and portfolio analytics. There are bots that can be set up to trade based on stoch, RSI, Bollinger Bands, MACD, and more. The more indicators your bot supports and the more ways you have to monitor and trade your assets.
The best bots support the use of signals. Signals are trading strategies provided by professionals, trading groups, and developers. Some bots provide access to signals for free while others require you to pay for these services. Quality signals will include what crypto to purchase, when, to buy in, and when to sell to secure your profits.
Backtesting is a great way to verify your strategy is profitable. It enables you to see how your bot would have faired in past market conditions. The best backtesting features allow you to select a specific time period in the market to utilize. Let it run and see the results. Then tweak your bot to make it better.
Social trading is one of the hottest features in the market at this time. Social trading bots allow you to select a trader to mimic. You pay a subscription to this trader for their trading signals that automatically execute on your bot. Social trading is a great way to secure profits while you learn how to fine-tune your bot.
Picking the Right Trading Bot to Fit Your Style
There are a lot of cool trading bots available today. Use this list to help you to determine the best deal for your particular trading strategy. The main thing to remember is that a trading bot doesn’t mean you’re guaranteed to profit. However, it will help you to become a more technical trader and remove emotion from your actions, which, in the long run, will help you to better manage your assets.