October 15, 2024 Welcome back to our blog, where we try to equip crypto traders with the information they need to master the crypto markets with our wide range of advanced crypto bots.
While we always enjoy sharing insights and guidance about the crypto markets and automated trading, there are some topics we’re more excited to discuss, and this subject is one of them.
In this blog post, we are excited to share the newest addition to our portfolio of trading tools: our demo account. We will explain what it is, who it’s suitable for, how to use it, and more. We’ll cover everything you need to know about this fantastic new tool and how it can uplift your trading experience.
Before we move forward, we want to remind our readers that the information in this blog post is intended solely for educational purposes and should not be considered a call to action or financial advice. Traders must consider their financial status, trading goals, and risk tolerance before employing any crypto trading strategy. Cryptocurrency trading involves inherited risks; consulting with a qualified financial advisor before making decisions is highly recommended.
Before we discuss the features of our new demo account, let’s provide some background.
In the automated crypto trading world, which relies heavily on technical analysis, traders try to identify repetitive chart patterns and indicators and the best way to capitalize on them. We start this process by examining the data in different ways, hoping to find reliable indicators that can notify us in advance when a new chart pattern is about to occur.
But how do we know if our analysis is correct, meaning if it has the potential to be fruitful in live trading? How can we, as traders, minimize the risk of error to a bare minimum before betting on it?
As discussed recently, backtesting is a great place to start answering those questions. With that, while being an excellent supportive tool, a shortcoming of back-testing is that you use the same data twice – both for designing your trading strategies and testing their performances. Doing so does provide us with some meaningful insights, but those insights might not necessarily be significant from a statistical standpoint.
To genuinely check the constancy of your trading strategies before putting your money on them, whether using your strategy or a potential signal channel you’re considering, it’s recommended to use two different sets of data to get more reliable results. One dataset is for developing potential strategies, and the other is for checking if they work as expected. It is always better to observe the results first-hand, for better or worse, while they are happening.
This is precisely what our new demo account allows traders to do. You can test your trading strategies with actual live market data without any risks from real trading. Our latest demo account is a comprehensive one-stop-shop trading tool that can help traders improve their trading skills, test their signal channels firsthand, optimize their trading strategies, and, as we’ll see later, much more.
At first glance, it’s hard to differentiate our new demo account from our pre-existing accounts for live trading. This is because the primary purpose of our demo account is to give users a trading experience as close as possible to real-life trading.
The main difference between your two accounts is the initial funds, which are set for $100,000 in each of our demo accounts. From our experience, this is the most comfortable amount for calculating ROIs and other metrics.
Technically speaking, the one true distinction between the two accounts is that one is connected to your funds, and the other isn’t. This lets users set up a demo account in just a few seconds. Besides that, everything else is essentially the same. Your demo receives the same market data as your live account simultaneously, and all trades are executed similarly.
Our marketplace, where the demo account operates, is designed to function like a live account, giving traders the exact features and trading experiences. This means that all of our trading tools and advanced features, like the ability to copy a bot with a few clicks or to configure dynamic trailing stops, are identical in every single way.
Besides the similarity between our demo and live accounts, another great feature we offer our users is the seamless integration between the two accounts. This makes uploading bots and trading strategies from your demo account to your live account extremely easy, as well as switching in and out between the two accounts.
This unique ability to give you a realistic, risk-free simulation of live trading has many benefits that traders would be wise to take advantage of:
While taking a strategy or signal channel live without testing it first is always possible, there are no real benefits. Our demo account, on the other hand, presents traders with the same knowledge without risking any of their hard-earned cash.
Through our demo account, traders can make more educated decisions about which signal channels are worth subscribing to, which strategies are adequately successful, and, perhaps more importantly, which trading schemes to avoid.
Cornix users can “trade” exactly like they would in actual trading but without any associated risks. They can go live only when they feel fully prepared.
While our new demo account is a powerful and helpful tool, you must follow some basic guidelines to get the most out of it.
As you can see, our new demo account is a handy tool for crypto traders to upgrade their trading skills and overall results.
With our product line and trading tools constantly evolving, this latest addition is an excellent time to share our recommended workflow for designing, testing, and optimizing trading strategies before going live.
Without further ado, here is our recommended workflow for building and testing your trading strategies from scratch and where and how our new demo account fits into it:
1. The first thing traders must decide is which cryptos they wish to trade. Our advice is to do so through some of the tools we’ve previously covered, like fundamental analysis, on-chain analysis, and tokenomics analysis, or maybe focus on significant and established projects. Whatever method works for you is fine.
2. The next step is to decide which strategies are most suited for your chosen cryptos. For example, suppose your favorable crypto is presenting a positive momentum. In that case, a DCA Bot might be a good choice, while Grid Bots might be a better fit for cryptos that momentarily trend sideways. In the case of signal trading, traders should inspect P&L reports, customer reviews, and the underlying strategy of a signal channel and the assets it focuses on.
3. After finishing steps one and two, traders should have a collection of potential candidates through signal channels and other trading strategies they wish to pursue. This is where backtesting comes into play. In backtesting, we filter our strategy and channels, separating the good from the bad. Then, we try out different settings and pick the optimal ones.
4. Our last step before taking any trading strategy or signal channel live is to run it through our demo account and evaluate its performance one last time. In general, we want to verify if the results we got in the back-testing are reliable. If so, they are likely to repeat themselves at this stage. To refer back to what we discussed at the beginning of the post, we check if the conclusion from our in-sample data is also relevant for out-of-sample data. After achieving satisfactory results, with or without a final touch-up in settings, traders can rest assured in terms of the quality of their trading strategies and signal channels and take it live with greater peace of mind and better prospects of success.
5. After completing all the preparations, this is the time to unleash the power of automated trading in the crypto markets. At this point, you should have a few strategies ready to go live. As a starting point, we recommend testing the water with a maximum of a handful of trading strategies. This will allow you to easily monitor and manage your position and understand all the ins and outs of automated crypto trading.
By following this methodology and its logic, crypto traders from all levels can improve their skills and bottom line. While a common saying in trading is that past results do not guarantee future outcomes, this workflow is currently the best way for crypto traders to minimize the risk of error to the bare minimum.
Our newly released demo account is just the latest in the efforts and commitments of the entire Cornix team to give our users the best possible toolkit for trading cryptos successfully.
With our demo account’s help, crypto traders can make more educated financial decisions. The advantages and risks are nonexistent, as can be seen from testing out a signal channel before fully committing to it, observing your trading strategies before taking them live, and examining how they perform under various market conditions.
Coupled with our portfolio of advanced crypto bots, step-by-step guides, and other complementary tools and educational resources, there is no better time to enjoy a two-week, no-strings-attached free trial and see all the advantages of trading cryptos with Cornix.
