April 21, 2021

Algorithmic Trading in Crypto

The crypto market has engendered progressively greater interest from people all around the globe. Of course, the obvious reason is high returns. To “get in the game”, you don't need a large amount of money. In addition, you can increase your capital in just a couple of weeks.

This market, which many experts have already dubbed the "Wild West", is perfect for the use of various tools for algorithmic trading. Let us dwell a bit on this.

A few words about algo trading itself

Algorithmic trading in crypto slowly but surely continues to climb in the list of popular methods. So as to back up this reaffirmation with supporting evidence, here's a few statistics from ZeroHedge. Almost 90% of trades on major exchanges in the world are made using high-frequency trading tools. This is the main type of algorithmic trading, when special programs themselves look for opportunities to earn money, sell and buy positions in a matter of seconds. So to put it another way, the main characters are robots, and they usually do business with each other.

We warn that,  if you want to touch the world of algo trading, then get ready for the fact that it will be difficult to accurately predict the outcome. What is more, algorithmic trading goes hand in hand with great risks. There are no clear rules and recommendations, there are only opinions and real examples.

Algo trading systems are used by both professionals and novice players who want to increase their capital. If you are a beginner, but you want to try this type of trading, you have two options: use ready-made programs or create your own with the help of a trading bot.

All robots and programs for algo trading are divided into those that ask for the user's permission, and those that don't need it. It is obvious to everyone that every user wants to deal with smart algorithms that know when to buy or sell, and do it at the right moment.

Software for algo trading — buy or create yourself?

At first glance, an existing solution will save you time - the most valuable thing you have. Although if you look into it, then creating your own program will allow you to adjust it to your specific needs. So decide for yourself.

Automatic software can cost a lot of money. In addition, it may be full of loopholes that allow the user to avoid the scope of the law or any restriction without directly violating the law: if you don't know all the nuances, you can lose a large amount of money. The cost of ready-made software can significantly reduce the profit from the trade itself.

Among the existing solutions, there is, for example, Algotrader 4.0. But building your own algorithmic software requires a lot of time and effort. Plus the probability that it will not be reliable remains.

Bottom Line

Algorithmic trading is a constant pursuit of perfection. Markets are not dormant, their evolution continues! As a trader, you risk losing your advantage if you stop implementing new trading strategies. Discover more popular methods here.

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