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Automated Trading: A Complete Guide for Dummies!

Automated trading helps in increasing the efficiency of your trades by helping you to execute CFD trading strategies faster. CFD stands for Contracts for Difference. It is a derivatives asset class that allows traders to speculate on financial markets (such as cryptocurrencies, forex, commodities, and others) without having to own the underlying asset. 

In this article, I’ll walk you through the different aspects of automated trading you always wanted to know. After going through this article, you will know what automated or algorithmic trading are, how they work, their benefits, how to use them to your benefit, and many more. 

What does Automated Trading Mean? What are Automated Trading Services?

Automated trading refers to mechanical trading systems. They are also called algorithmic trading. Automated trading enables traders to establish specific rules for entering and exiting trades. Once the programming trades are done, they can be executed automatically through a computer. Reports say that 70-80% of the shares traded on the leading stock exchanges in the United States takes place from automated trading systems. 

Precise entry, exit, and money management rules can be incorporated by the traders/investors into the algorithmic trading systems so that the computers can execute and monitor the trades.

The best thing about automated trading is that the trade executions take place without emotions because of the fact that the trades are placed automatically when certain predetermined criteria are met. Suppose, the rules of entering and exiting a trade is based on a simple condition (like a moving average crossover) or a more complicated strategy. While using automated trading services, you have to choose strategies on the basis of which the trades will take place. When such a condition is met, the software will either buy or sell. 

There are different types of automated trading services using software that are associated with different brokers. The specific rules in the software are written in different proprietary languages of the platform. While the TradeStation platform uses the EasyLanguage programming language, the NinjaTrader platform uses NinjaScript. 

Does Automated Trading Work? Is Automated Trading Profitable? 

Yes, automated trading works. However, it works best when a trader is conversant with different trading strategies. At the end of the day it is the trader who has to make the decision about the strategies used and juggle between various variables  in algorithmic trading. Until and unless you are an experienced trader, you’ll not be able to have a vision for trading. 

Whether it is the market fundamentals or other trading factors, you have to be on top of the affairs all the time and tweak settings continuously to achieve your goals. 

Algorithmic trading is not a fire-and-forget kind of deal. If you expect that automated crypto trading is setting parameters and forgetting about it, your idea is completely misplaced. You should always be on top of your trading strategies all the time to get the best results. 

Yes, automated robot trading is profitable but you have to be on the helm of the affairs all the time. Setting the strategies and forgetting about them is not a good idea because the market conditions change all the time in a highly volatile cryptocurrency market. The strategy you have set at one point in time may not work when the market conditions have changed. 

That’s why you’ll need different strategies at different points in time. For which you have to be vigilant all the time and make changes in the parameters of the software from time to time to make robust profit.

How Automated Trading Works?

Step #1: When you are going for automated trading, you’ve to select a platform first. 

Step #2: Once the platform is chosen, in the next step you have to choose parameters of trading strategies. Now, use your experience of cryptocurrency or forex trading for creating a set of rules and conditions. 

Step #3: Apply your customized algorithm for applying the criteria of placing trades on your behalf. The factors usually involved in deciding upon trading strategies are usually based on 3 factors:

  1. Time of trade.
  2. The price at which a trade is opened or closed.
  3. The quantity of trade.

Example of strategy: 

“Buy 10 SOL coins when the 50-day moving average moves above the 200-day average.”

Step #4: When you’ve set a strategy for automated cryptocurrency trading, the concerned software will keep monitoring the financial market prices constantly. When predetermined parameters are satisfied, trades are executed automatically.

Always remember that automated trading is just a tool that you should utilize for trading faster and in a more efficient manner so that you can take full advantage of specific, technical market events.

What are the Pros and Cons of Automated Trading?

Pros

  • The major benefit of automated trading is that it minimizes or eliminates emotions that affect trading decisions.
  • It allows backtesting, enabling you to evaluate and fine-tune an idea/strategy of trading. 
  • As algorithmic trading software involves establishment of specified rules of trading, trading discipline is maintained even in volatile markets. 
  • Order entry speed is extremely fast because a trade is executed as soon as the predetermined parameters are met. 
  • Multifarious strategies can be used at the same time to trade multiple accounts for maximizing profit. 

Cons

  • Mechanical failures may take place.
  • Poor performance can happen, especially if not monitored regularly.

What is an Automated Trading Bot?

Automated trading bots for cryptocurrencies, forex, and others are computer software. They create and submit buy/sell orders on exchanges on the basis of trading strategy that are predefined by the trader using the software. If you, as a trader, choose a program for selling Ethereum (ETH) when a certain price is reached, the automated trading bot will execute it fast and in an emotionless manner when this criteria is fulfilled. 

Cryptocurrency trading bots are trading software that executes buy and sell orders on the basis of available data or trend and not on the basis of emotional impulse. One of the major advantages of trading bots is that it can work 24/7, which is impossible for a human being. It, therefore, helps you earn passive income even when you are sleeping. 

What are the Best Automated Trading Software?

The best automated trading bots for cryptocurrencies, forex, and stocks are:

  1. Napbots.com
  2. MetaTrader 4
  3. MetaTrader 5
  4. Interactive Brokers
  5. Coinrule
  6. Trality
  7. Botsfolio
  8. Wunderbit
  9. Zen Trading Strategies
  10. SoFi Automated Investing

Buy Bitcoin, Cryptocurrencies, Stocks, and Gold Now

If you are ready to invest in stocks and cryptos or buy Bitcoins through online brokerage accounts of centralized or decentralized cryptocurrency exchanges, you can do so in a legit way by investing through stock investing and cryptocurrency apps. You have to open an account with such an exchange or online broker (including trading apps and invest apps such as TD Ameritrade). Then verify your details (including basic personal information) and fund your stock or cryptocurrency trading account. 

The best thing about the Bitcoin and crypto market is that the transactions are done without the involvement of banking entities. This is one of the reasons why more and more investors (including corporates, venture capitals, and institutional investors) are heavily investing in cryptos. 

You can start depositing funds to your stock or crypto exchange account to buy company shares or cryptocurrencies. This can be done by simply connecting your online banking account (savings accounts, checking accounts, or other account types). Besides transferring fiat currency money online through bank transfer, you can make payments with other payment methods including credit cards, debit cards, and others. 

If you need further assistance, you may consider taking help from the vibrant and helpful trading communities. You can trade cryptos with credit cards (business credit cards, personal ones, or citi custom cash cards), debit cards, or other payment options through reliable crypto trading web platforms. 

You can also check the savings calculator to know how much you should save on a weekly, monthly, or yearly basis. Check the financial news to know more about the prospects of various assets so that you can build long term wealth.

In case you are bullish on the future prospects of gold, stock and ETF trading, crypto market, Bitcoin BTC, Ethereum ETH, Bitcoin Cash BCH, Litecoin LTC, Ethereum Classic ETC, Bitcoin SV, Wrap Bitcoin, and other altcoins, you can start investing in stocks, gold, Bitcoin, and other altcoins with USD. Once bought, transfer them to:

  • hot wallets (including mobile app wallets and software crypto wallets) or 
  • cold wallets (including most secure hardware wallets) 

Hold them for a longer time period to let the Bitcoin BTC price increase. Keep your cryptocurrencies safe with:

  • Ledger Nano S
  • Trezor One
  • Other Ledger and Trezor models

Crypto market investing will provide you a higher return in the long run. The ROI from crypto investment is much more than investing in:

  • Stocks
  • Mutual funds
  • Index funds
  • Real estates
  • Yield savings accounts
  • Real estate investment trusts
  • Fiat currency trading (forex trading)
  • CD rates
  • Trade Options
  • Money saving in savings accounts
  • money market returns
  • Exchange traded funds
  • IRA accounts (including Bitcoin IRA), and others. 

In fact, many retirement funds or IRA accounts such as Roth IRAs are allowing digital currency investors to purchase XRP, Bitcoin, Chainlink, and other digital assets. These retirement funds are increasing investor choice by allowing them to invest a small percentage of their money in cryptocurrencies. This is, in turn, increasing the prospects of these funds to provide their investors to get higher returns. If you are thinking about building wealth, you should include cryptos in your portfolio like other crypto investors. 

Therefore, it can be concluded that holding Bitcoin Ethereum and other cryptos can help you to build real wealth and multiply your net worth. You can learn investing basics to buy crypto currency and other digital assets to make more gains. Start going through Wall Street Journal and other investing magazines on cryptos to learn more about investing in crypto market and make better financial decisions. Learn about valuation calculation to true bitcoin value and assess the overpriced or underpriced situations instantly. 

As a beginners guide, you may also check out the trading basics provided by various cryptocurrency exchanges such as Coinbase, Binance, Kraken, and other crypto APIs. There are many brokers suitable for beginners as well. So, read reviews of customers before joining a crypto exchange. There are many brokers for beginners in the USA through which you can trade and invest extra cash and investible fund in fractional shares and stocks funds. 

You should definitely learn about:

  • Trading for beginners (Step By Step guide)
  • Types of stocks including penny stocks, value stocks, growth stocks, blue-chip stocks, etc.
  • Gold standard
  • Futures contract
  • Gold miner, gold mining company, and gold mining stocks
  • Bad debt and bad credit
  • Home equity
  • Employment tax records and receipts
  • Periods of limitations
  • How credit score is determined?
  • World gold council
  • How is the price of gold and other precious metals determined?
  • How to rent out your car to make money
  • Significance of owning gold
  • Stock plans
  • Fixed income assets
  • Stocks and Funds
  • Spot price and futures price of gold
  • Write an eBook to start making money 
  • Use spare time and personal internet connection to earn extra cash through part-time graphic design
  • Asset allocation
  • Investment gold
  • Different ways of buying and selling golds
  • How to make money from Google adsense?
  • Gold stocks
  • Utilizing market news for profit
  • Significance of Dow Jones in the stock market
  • How to increase your disposable income through balance transfers credit cards?
  • Different trade ideas
  • Warren Buffet’s investing styles
  • Passive investors
  • Different investment goals
  • Teaching as a private tutor in your free time
  • Cash Management
  • Investing for beginners
  • How to choose brokerage firms and stock exchanges?
  • Gold markets
  • Trading strategies for beginners to time your entry and exit
  • Using price actions to one’s advantages
  • Teach english to earn lot of money online and start saving
  • Browsing websites can also help you earn little extra cash
  • Margin Requirement
  • Margin Call
  • Margin Account
  • Day Trading Margin
  • Trend Trading
  • Market Maker
  • Options trades
  • Fundamental Analysis
  • Short Sell
  • Market Research
  • Success Rates Of Day Trades
  • Trading Vs Investing
  • Swing Trading
  • Time Frames Of Trading
  • Successful Ways Of Buying Stocks And Cryptos Throughout The Day
  • Risk Management
  • Financial Industry Regulatory Authority
  • Trade On Margin,
  • Foreign Exchange Trade
  • Pattern Day Traders
  • Day trading rules
  • Active trading
  • Secrets of a successful day trader
  • Stock price actions
  • How to pay off debt quickly
  • Planning for retirement 
  • IRA guide and fruitful ways of increasing returns of individual retirement accounts
  • Stock price determinants
  • Charles Schwab’s modern approach to investing and retirement
  • Day Trading Tools, trading software, and different financial tools. 

Defi tokens and NFTs (Non Fungible Tokens) are the next generations of crypto coins. These decentralized coins have started to become very popular among active traders who trade cryptocurrency. You can buy sell them through crypto trading platforms too. 

Whether you buy Ethereum ETH or buy Dogecoin, you should also invest in: 

  • Chainlink LINK
  • Litecoin LTC
  • Binance Coin
  • Cardano ADA
  • Polkadot DOT
  • Dogecoin DOGE, and 
  • Trade Litecoin LTC for better diversification of coins

To diversify your portfolio, you may also buy stocks through stock brokers for beginners and pro.

Get better guidance on improving your personal finance, retirement planning, management of cash flows or capital gains, and investment ideas from financial advisors, investment managers, and wealth managers, especially the ones who are not averse to cryptocurrencies such as Bitcoin and others. 

While day trading, you should always try to invest only that much money which you can afford to lose. When you do margin trading, be very careful. Financial protection must be there in your mind always while you make cryptocurrency trades. That’s why having a secure financial plan is so important. 

Invest money in stocks, gold, and other cryptocurrencies through centralized or decentralized exchanges and reliable online brokers. 

Choose NapBots to Increase ROI

Trading Robots (such as NapBots.com) automatically scans the market in real-time and trades for you. They run 24/7, which means that you can keep earning your passive income even when you are sleeping. This gives you an edge over other investors as it enables the bot to book profits on your behalf when other investors are sleeping.

Smart crypto investors always remain prepared to get the best of a big market move. They don’t wake up suddenly. To remain alert round the clock, they use cryptocurrency trading bots so that they don’t miss any big market movement.

NapBots.com is a Trading Bot, cloud-based platform, on which you can connect to major exchanges such as Binance, Bitmex, Bitfinex, OKEX, Kraken, Bitstamp, and Bitpanda. 

The best thing about the Napbots trading software is that you don’t have to monitor charts and candles to predict your next move. Any novice trader with zero skills can also start trading like a pro and earn money with this unique trading tool. Let Napbots take full control over your trades in just a few clicks. Now, sit back and enjoy earning money. 

You may also check “Napbots Review - Simple Way To Increase Your Crypto Returns” before taking the plunge.

What’s so special about NapBots?

NapBots crypto trading software is special because it comes with:

  1. A unique trading algorithm that processes market data for you 
  2. A unique crypto trading bot library so that you can create your own mix of trading strategies
  3. Autopilot mode that enables you to automate trading 24x7
  4. An easy-to-use interface so that you can copy the proven strategies of NapBots to make successful trades and make money

How to Get Started with NapBots?

NapBots is easy to start with. It involves just 3 steps:

Step #1: Connect to one of the available trust exchanges.

Step #2: Select from the unique list of performing Bots of NapBots

Step #3: Choose a plan that suits your investment style

Once you have completed these three steps, NapBots is ready to trade cryptos and earn money for you. Happy Trading!

Why Choose NapBots?

  • NapBots offers complete trading automation solutions through the use of its own tested trading strategies; offering quantitative trading strategies previously reserved for hedge funds to the public. 
  • The setup and installation process are easy. So, the non-experts can also use it. The simple and special approach of NapBots helps it provide you with excellent ROI. 
  • The team of professionals behind NapBots has extensive experience in the financial market. They have put their years of experience in place so that you can easily automate the management of your funds with no technical skills. This service can run 24/7 and work as your passive source of revenue even when you sleep.