a good idea to start crypto trading?

Updated August 09. 2022 at 10:32 am

Many beginner traders give up the practice after a few weeks or even months. In the end, very few of them manage to get through the difficult beginnings that trading imposes. The causes of these dropouts can be summarized as excessively strong emotions, the long learning curve required and the time-consuming aspect of the activity. This is all the more true when you want to trade cryptocurrencies. A real generator of opportunities, the market still has some surprises in store that can trap beginners and totally discourage them. To overcome these difficulties, trading robots represent a good solution. Let’s see together why.

5 tips for trading cryptocurrencies better

Securing your debut with a trading robot

A beginner’s biggest fear is losing money. Of course, this fear never completely disappears. This is why even some experienced traders fall into the trap. Even if we tend to control this fear, the emotions annexes it generates can become a real burden for traders.

This is all the more true for novices who have not yet become aware of all the impacts that these emotions generate on their performance.

They manifest in different ways. For example, after a series of losing trades, the fear to lose again gives way to a stress devastating. The latter will push to invest more money to try to make up for the losses…but it actually worsens the situation.

Another example, after a series of winning trades, euphoria appears. It involves the trader in an excess of confidence which makes him take positions at all costs, deviating little by little from his initial strategy. The result is the same as in a stressful situation and the capital begins to melt.

Emotions of trading - trading robot
The different emotions felt by a trader

The dealing with these emotions can be difficult to set up especially the novices. On the one hand, you have to be aware of this and on the other hand impose a certain discipline on yourself.

This discipline goes through the implementation of a strategy that will have proven its worth beforehand and a money management that includes the risk of loss.

In this sense, trading robots offer a security. Built on computer programs that are called algorithms, they are by definition devoid of emotions. Thus, unlike a human being governed by his thoughts, a trading robot cannot experience fear, stress or even overconfidence. He will not be swayed by a series of winning or losing trades.

Their only objective is to apply to the letter what they have been programmed to do: analyze the market in search of opportunities, take a position and ensure the money management strategy that has been asked of them. In other words, they impose themselves the discipline necessary for effective trading.

Bots take the place of the novice and therefore emotionally fallible trader. They ensure the capital management so that no emotion comes to disturb the trading and the taking of positions.

Trading robot: investing in crypto without training

Trading is an activity that has its own jargon, its own codes. All beginners must appropriate them to carry out correct analyzes and find the right opportunities to invest.

Crypto trading is even more complex. He is even more technical. We talk about vesting, staking, Proof of Work or even yield farming. So many concepts that a beginner will have to understand and learn to use.

For this, he will have to engage in a training quite long since the crypto market is an atypical sphere that has its own specificities.

In addition to training, creating and master strategies, testing them to confirm or invalidate them is part of the trader’s apprenticeship. Even the most experienced must at one time or another find new strategies then test them in real life or on demo accounts before adopting them. The market is constantly changing and a strategy that worked yesterday has no guarantee of being effective tomorrow.

Thus, investing without training is an operation that has a good chance of being unsuccessful. Positioning yourself in crypto-currencies in the short or long term requires compliance with certain rules to maximize the chances of winning.

Trading robots are programmed to apply trading strategies. They are already predefined and only have to be applied to a trading account.

To note

The performance of the strategies applied by a trading robot depends on their programming. Some trading robots will be very basic and only offer simplistic and/or ineffective strategies. Others, on the other hand, will offer several backtested strategies applicable to different investment visions according to your expectations.

Automatically, these programs look for graphic configurations, patterns, which allow them to take a stand. They are also responsible for respect the rules of money management and limit the risks by placing a stop loss themselves. The bots also calculate the take-in levels.

To sum up, trading robots take care of the portfolio management like a pro. Now, novice traders no longer have to go through the learning box.

Be careful, however, there are many scams around trading robots. It is important to find out before adopting a program.

Balancing free time and crypto trading

As mentioned in the introduction, trading is an activity that requires invest time.

Learning and mastering one’s emotions are among the aspects time-consuming. Unfortunately they are not the only ones.

Once the notions of crypto trading have been acquired, the work of a trader really begins. Indeed, most of this activity is monitor and analyze charts. It is essential to look for the right opportunities, follow the positions, take your gains, analyze the crypto cycles.

It’s a watch job that takes time. This is all the more true when using smaller and smaller units of time. However, time is an increasingly scarce commodity these days.

In many cases, crypto trading is thus perceived as an activity incompatible with a full-time job. Indeed, the timetable must contain a minimum of 35 hours at work, hobbiestime with family and friends. Trading painfully enters a schedule.

This is one of the reasons for which trading robots were created. Indeed, they reconcile busy schedules with active investment.

They work alone without the need for a human presence to keep an eye on. The trader no longer needs to spend his time in front of the screens analyzing all the markets and assets that interest him. Trading robots are thus an effective means of make money while having free time to work, enjoy your surroundings or go about your leisure.

In other words, it’s a great way to grow your capital without constraint.

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