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Bitcoin is the most popular cryptocurrency by community support, asset value, and trading volume. This has made many investors interested in its trading. However, like other cryptocurrencies, its volatility can be a challenging issue to overcome, especially as a beginner trader. Many even consider Bitcoin the first Decentralized Autonomous Organization (DAO) because it\u2019s an entity without governance by a central authority.<\/strong><\/p>\n However, it doesn\u2019t stand as a DAO in today\u2019s standards and definition. But it\u2019s still not regulated by a central authority, and therefore prices can rise and fall uncontrollably.\u00a0 Fortunately, technology has made it easier for traders and investors to automatically trade without constantly monitoring prices.\u00a0<\/span><\/p>\n Contents<\/p>\n Automated trading is the use of algorithms to trade. That is, buy and sell bitcoin or other cryptocurrencies. You can use different strategies to execute trades based on your portfolio\u2019s proportion value, asset price, or technical indicators. Automated trading is excellent when you have limited trading time or don\u2019t want to hold and speculate bitcoin.<\/span><\/p>\n You\u2019ll need automated trading software or trading bots to execute trades on your behalf. To automate trading on a platform, you need to open an account and choose the strategy you prefer to use. Once selected, the program will buy and sell your bitcoin based on the software parameters.<\/span><\/p>\n Many automated trading software work as application programming interfaces (APIs). A <\/span>Bitcoin API<\/span> trading bot will act as the intermediary by trading for you on the exchange platforms. New advancements in automated trading operate on the blockchain instead of an API or website. They use smart contracts, which is a set of code that automatically executes predetermined functions.\u00a0<\/span><\/p>\n The following trading bots are mainly based on the common buy and sell strategies common in crypto markets as well as traditional markets.\u00a0<\/span><\/p>\n <\/p>\n \u00a0<\/span><\/p>\n <\/p>\n Automated trading can work for novice, expert, low and high-volume traders. It\u2019s also a good option in <\/span>OTC bitcoin trading<\/span>. Here are the benefits you can get when you automate bitcoin trading:<\/span><\/p>\n Timing:<\/b> Because trading bots execute trades bases on preset rules, they buy or sell your coins faster than you would manually. They\u2019re also quicker at analyzing trends and making the most favorable trading decision based on your chosen strategy.<\/span><\/p>\n Lack of Emotion:<\/b> A trading bot effectively removes emotional trading from the equation. With bitcoin being quite volatile, fear of missing out can affect your trading decisions, and you end up losing. A bot only trades according to the market analysis and not a \u2018feeling.\u2019<\/span><\/p>\n Consistency<\/b>: A bot can operate non-stop without needing a rest, making them more consistent than the most experienced trader. All you need with automated trading is to set the trading parameters and specific indicators, and the bot executes your trades any time of day.<\/span><\/p>\n Repetitive tasks:<\/b> If you\u2019re a market indicator trader, a bot does all the work for you.<\/span><\/p>\n Time-saving<\/b>: Instead of being held up marking market analysis, a trading bot saves you immense amounts of time because it watches the market and executes trades on your behalf. If you don\u2019t have time or the capacity to monitor the bitcoin market constantly, a trading bot is the best option.\u00a0<\/span><\/p>\n On the flip side, automated trading also has some drawbacks, including the following:<\/span><\/p>\n Lowered security:<\/b> bitcoin trading bots are ordinarily secure. However, you need to hold your bitcoins in an exchange platform that has a likelihood of experiencing a cyberattack, although most exchange platforms have proper security measures in place. A hardware wallet is a more secure place for holding your bitcoins.<\/span><\/p>\n\n
What is Automated Trading<\/strong><\/span><\/h4>\n
Types of Bitcoin Trading Bots<\/strong><\/span><\/h4>\n
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Benefits of Automated Bitcoin Trading<\/strong><\/span><\/h4>\n
Disadvantages of Automated Bitcoin Trading<\/strong><\/span><\/h4>\n