Profits are what every trader is after. Regardless of what type of trader you are speaking to, whether they are a day trader, swing trader, or perhaps even a longer time frame trader, when it comes down to it, maximizing their profits is the goal.
While there are many ways and methods to accomplish this, perhaps the most convenient (and accurate) is automatic (or auto) trading. Auto trading is the act of having a program or system automatically place buys and or sells for you.
This way was not feasible for the masses years ago due to the technical knowledge it took to code and build the tool itself. However, over more recent years, the process has been streamlined to the point where even those with no technical knowledge can now leverage this method.
This article will cover auto trading tactics that you can use to maximize your profits when trading cryptocurrencies.
After the initial learning curve, one of the massive benefits auto trading provides is that it saves you time. Everyone is familiar with the saying “time is money”, which also applies to this scenario.
Trading evokes many emotions, and out of excitement, especially for newer traders, it may cause them to rush into trading without having a solid foundation. Using a platform such as an auto trading bot, those same users can begin trading while they continue working on their developmental foundation, such as diving deeper into learning about new trading strategies and tools.
As the name implies, copy trading is copying another user’s trade setup. This can also occur through multiple methods like signals or copying other automated bots.
A signal is an alert that an individual or program sends out to make users aware of a trade opportunity that can potentially make the end user profit. While Cornix does not provide signals ourselves, we have constructed our software and bots to connect to other third-party platforms that are known for providing signals.
These include social media messaging platforms such as Telegram and Discord. Cornix also supports copying other bots, such as the Dollar Cost Average (DCA) bot.
This tool alone could be the perfect way for one to maximize their profits through auto trading tactics as not only is DCA a very well know strategy due to its consistency to amass profits, but it is also famous for being one of the most risk-averse investment strategies.
When it comes to trading crypto automatically, copying a DCA bot to trade with can bring peace of mind in any market condition, as the bot’s purpose is to buy low, and as soon as that trade lot enters into profit, it will exit to realize it. The goal with this bot is to make small profits consistently, which will add up to a lump sum over a period.
Arbitrage is the process of buying one cryptocurrency from an exchange and selling it instantly on another exchange at a higher price. There are hundreds, if not thousands, of exchanges in the cryptocurrency world, and all of them have coins listed at different prices.
Some of those prices are very close, however, in a few instances, there are substantial price variations that, if taken quickly enough, can result in “simple” profits. Unfortunately, these opportunities to take advantage of the price differences don’t last very long because thousands of other traders are out there waiting to do the same thing.
The key is to be able to scan the thousands of different exchanges while simultaneously considering the price for each of the tens of thousands of cryptocurrencies to find the best trade setup.
Of course, as you may have imagined when reading that, it is impossible to do manually or, at the very least, efficiently. This is where an arbitrage auto-trading bot comes in. It will weigh the price of the cryptocurrencies and then scan those exchanges to find which trade makes the most sense (profits) and execute.
While risks are always involved in any financial investment, arbitrage trading, similar to DCA, has been known to be another safe form of trading. This is an extremely effective way to maximize your profits using auto trading programs.
Moving average trading is an indicator that aggregates and analyzes data points across a specific period and then displays them on a chart as a line. While it has been simplified through an automation process, the underlying algorithm it uses to compile this data is anything but simple.
When a cryptocurrency is trading above this line, it is usually in an uptrend or showing bullish signs. When it is trading below this line, which usually signals a downtrend or bearish period, you can use an auto trading bot to trade along with this trusted indicator to help capitalize on your profit-making potential.
Ideally, you set the bot conditions to purchase the cryptocurrency once price action pushes (and finds support) above this line. You would also set the bot to exit the position once the asset has fallen back below this line. Of course, the time frame you are trading on would significantly impact how you would want to trade, or at least set the parameters to this strategy, but It can, and is, used across multiple durations.
Another straightforward auto-trading strategy to maximize your profits is trend trading. Every chart tells a story about the trend or direction a cryptocurrency is trading in. These trends are depicted in two color combinations of candles, which most commonly are green and red. The asset is trending up when the chart moves upwards and has more green candles than red.
In this trend, it’s common to find that traders will not only buy the dips or retracements but also try to accumulate as much as possible during these times. They will look to exit those positions once a “top” has been met. A top is when an asset has exhausted its buying pressure and begins to lose momentum.
This is yet another instance where combining this type of trading with an automated bot is key since these actions can occur in seconds.
But the uptrend is not the only condition where a trader can profit, they can also profit during downtrends. In this scenario, one would wait for a significant price retracement and then buy once there was a confirmed bottom, intending to sell on the next movement upwards.
This approach, in a sense, is trend trading but on a much more defined time scale. Again, profits can be made regardless of whether the overall asset is in a bull or bear market. Most scalp traders (manual) have to commit a specific amount of time to watch the charts, read (or stay on top of) the market news, and stay ready to pounce on the slightest sign of a market shift.
While some traders make entire careers out of this, it tends to be a career. However, combining scalp trading with the power of automated trading can truly take your game and portfolio to another level.
With the lightning speeds of auto trading bot technology, the scalping end user can take advantage of and profit from even the smallest price movements. This edge is rarely feasible using the traditional methods as for the time it takes to enter your desired purchase amount, coin quantity size, and possible stop losses, the asset could have already rebounded to higher levels.
Mentioned earlier were one indicator, the moving average, but many more are also straightforward and can be used on a standalone basis. For example, the relative strength index (RSI), volume indicator, and Moving average convergence divergence (MACD) exist.
The RSI shows an asset’s strength (and weakness) based on a range of the previous closing prices – or the end of a 24-hour duration in the crypto world. The RSI uses a point scale system that starts at 1 and goes to 100. While each trader has a different outlook on the numbers and their meaning, it is a common consensus in the industry that anything below 30 is oversold, and anything above 70 is overbought.
The RSI strategy can easily be implemented into an auto trading bot across all time frames and used as a stand-alone indicator. Just keep in mind that just because a coin reaches the low level of 30 doesn’t mean that it can’t go lower; and on the other side of the spectrum, it can certainly go far above 70 before retracing back down.
When it comes to the volume indicator, another very straightforward method, the mindset behind this is that when volume Is low, so is the interest in the said asset, which usually means it could be trading at low ranges as well.
When the volume is high, the crypto price also tends to be on an uptrend. But like all other indicators, this is not always the case, as even during market sell-offs (still a trading opportunity to profit) the volume can also be high.
One possibility is using the volume and RSI indicators with your auto-trading bot. If each one by itself does not provide the trader enough confidence to make a certain play, together, they surely will.
Although the Moving average convergence divergence (MACD) is a lagging indicator (the data it provides happens after the move itself has), you can still drill down to shorter time frames, perhaps the hourly, 30-minute, 5-minute (or even smaller) to pre-determine what the next move may be.
This can be a very profitable indicator, especially if you can identify a larger shift in the market sentiment and capitalize on it.
As you have read, there are truly many ways that you can use auto trading tactics to maximize your profits. Those possibilities reach far outside of this article as well.
With so much information, the main thing to remember is that when it comes to auto trading, the tools are immense, and the possibilities are almost limitless.
The key here is action. Whether diving into social media videos or tutorials on the topic, signing up for Cornix and reading through guides, or possibly even tracking the performance of such bots just to get more comfortable with the platform and tools – taking action is vital.
There’s no better time to start than the present moment, and regardless of the overall state of the markets (or economy), being proactive is what trading and investing all come down to.
When the next bull run begins, only those who are prepared will be able to grasp and benefit from the market fully – Will that be you?