The cryptocurrency market has continued to grow significantly as companies look to compete for supremacy and more investors enter into the space looking for gains. And as the market continues to grow, more gaps in efficiency have been noted by industry participants.
However, these gaps also tend to act as a blessing in disguise. They provide an opportunity for new technologies to improve platforms and provide better customer service. As automation continues to enter every facet of the financial space, it is time to consider how it works with cryptocurrency exchanges and how their operation can be more seamless.
Automation has become a staple in pretty much every service. Exfor, a trading service that serves the Middle East and Latin American regions, even has integrations for any trader to connect their automated trading services directly to its interface. Exfor is an innovative trading platform that provides access to multiple markets – currencies, alternative assets, stocks, and even metals. The product, which was launched in 2022, also provides access to automated trading and bots for investors looking to ensure higher accuracy on their trades.
With technological advancements growing, it is worth looking into the massive trend of currency exchange automation and why traders are moving heavily into this field.
Automated trading – A much-needed break from the norm
In today’s crypto market, automated trading has become one of the more widely used trading strategies. With automated trading, computers can monitor and carry our trades on behalf of their clients – the traders. Once you select a strategy and stick with it, the market essentially watches for opportunities to enter and exit positions based on your guidelines and instructions.
Back in the day, traders had very little information when entering the financial market. However, with more technological developments, access to the market and all of its data has increased significantly. Sadly, access to the market has also led to a seeming overload of information; with traders new needing more guidance on how to sift through important and less important data.
Automation lets traders set up some of the rules of entry and exit. And once you can program the platforms, you will be able to rest and watch as your trades are executed. Automated trading platforms are allowing traders to move in the right direction and letting them learn over time.
It is worth noting that automation isn’t just present in the crypto market. Between 70% and 8% of trades conducted on stock exchanges in the United States are conducted using automated trading systems. Traders and investors can easily create automated trading systems that allow computers to execute and keep tabs on deals by incorporating accurate entry and exit.
With the growth of automation in the market and the volatility of the crypto space, it was only a matter of time before this trend moved into the latter. And already, many crypto traders are starting to embrace this move.
So, how does automation improve the efficiency of currency trading?
Preparing trading parameters
Automated trading has enabled platforms to include strategy builders – essentially, wizards that allow users to choose from some of the most widely used technical indicators to create the proper trading rules.
For instance, a user could decide to open a long position on trade as soon as the asset’s 50-day moving average crosses the 200-day moving average on the five-minute chart. The user can also enter metrics such as the type of order, the transaction timing, and much more. Or, they could decide to sue the platform’s custom values
Most advanced traders prefer to program their unique approaches and indicators. However, with strategy builders available on many automated trading platforms, you suddenly don’t need to worry about the excess work of collaborating with coders and setting parameters. Just choose the right trading rules, and the trading platform does the rest of the work on your behalf.
As soon as the rules are established, the computer will keep watch over the market and look for buy and sell opportunities using your trading rules as guidelines. Depending on the regulations, orders for protective stop losses, profit goals, and even trailing stops are generated once the trade is entered.
Considering that trades could still move against traders, using an automated trading platform ensures that you only end up making a minor loss – not a significant one. And in markets that are especially volatile – such as crypto – this can be very important.
Eliminating human emotions
Trading is just as much a mental exercise as it is professional. It is important for traders to master their emotions, especially after they open trades and those trades might not necessarily go their way.
It’s a tale as old as time – you open a trade and the first thing you see is that the trade starts to move in the opposite direction that you hope. After closing the trade at a small loss, you end up seeing that the trade aligns and starts to move in the right direction. You might enter the trade again and still make some money, but it definitely won’t be optimal profitability.
Automated trading platforms provide a much-needed break from this. Trading services aren’t humans, so they don’t have the same emotional attachment to trades. Their job is to execute, and they do so by following the rules you set. So, you could open a position on Exfor and essentially let a trading bot manage it for you. Instead of checking the Exfor order page every time, set the rules of engagement and let the trading bot do the work.
This setup makes it easier for traders to manage their portfolios. Simply provide the rules that the trading service is expected to follow, and leave it to work. Any emotional reactions to trades are properly managed, and you will be in a much better position to move ahead with full profitability.
