Cryptocurrency Accumulation with Bots

Defined as the act of gradually gathering something, accumulation plays a big part in crypto asset management. Instead of purchasing a variety of properties right from the start of your investment journey, accumulation lets you effectively grow your cryptocurrency portfolio by attaining different assets overtime.

A larger collection of assets leads to a bigger portfolio, while an impressive portfolio paves the way for increased wealth. Due to this beneficial equation, accumulation remains prominent in various investment strategies. This also holds true for cryptocurrency investment.

It’s because the crypto market has many different assets to offer. But they also come with highly fluctuating values. As a cryptocurrency investor, it becomes critical for you to grow your crypto portfolio on a consistent basis. In addition to increasing your collection of cryptocurrencies, it also helps you manage risk and avoid losses.

In crypto investment, you can also look into automated trading bots to help you achieve the goal of accumulation. This allows you to fulfill your objectives with ease, and also brings more efficiency to the table.

To help you get the most out of this practice, here’s a lowdown on cryptocurrency accumulation with bots.

🤖 Why Do Crypto Accumulation With Bots?

With the help of trading bots, you can automatically acquire a diverse portfolio of cryptocurrencies but on a gradual basis. This saves you from using a massive amount of funds from the very start of becoming a crypto investor. Instead, you can use minimal funds to start with investing in the cryptocurrency sector and acquire different assets in a gradual manner.

When you follow this approach, automated trading bots can save you from a plethora of manual efforts. In return, they provide you with the peace of mind that your portfolio is being expanded even when you are unable to check on it every single hour. Since different cryptocurrency assets can fluctuate at any given time, this approach helps you ensure that you are benefiting from these market movements effectively.

Keeping this in mind, many new and seasoned investors focus on cryptocurrency accumulation with bots on a consistent basis. Many of these individuals stay satisfied with the approach due to how it enables them to have an expansive portfolio without stretching themselves thin.

🟢 How to Start With Crypto Accumulation With Trading Bots?

Before you start accumulating different cryptocurrency assets, you need to keep certain points in mind. Following these best practices makes sure that you can attain your goal while staying away from increased risks and possible issues.

Assess Your Funding

In order to start with any sort of trading bots or associated strategy, you have to assess the funds that you have at hand. This approach is simple, but it provides you with the assurance that you are not investing any money that you cannot afford to lose.

This foundational step requires you to adhere to the following points.

  • Never use money that is meant for covering essential expenses such as rent, mortgage, or utility payments.
  • Only utilize funds that you can afford to lose and which don’t come from critical savings such as your college fund.
  • Don’t take a loan to fund your cryptocurrency investments, whether any bots are involved or not in the first place.
  • Set an initial limit of funds that you can invest in the cryptocurrency accumulation strategy.

Consider All Expenses

Similar to conventional investment instruments such as stocks or bonds, cryptocurrencies also come with additional expenses when it comes to active trading. When you are assessing your funds, you need to consider this associated spend that makes up for overall trading costs.

These costs include but are not limited to the following aspects.

  • Exchange trading fee
  • Transaction fee
  • Conversion fee
  • Withdrawal fee (for profits or remaining balance)
  • Trading bot fee

Some instances such as exchange trading fee and conversion fee apply on a per transaction basis. Whereas, other factors such as trading bot fees can be charged monthly or annually. In order to manage your crypto accumulation efforts without interruptions, it is important to look at all of these factors.

Choose a Strategy

Your main approach is of course accumulative trading. But it is just the foundation of your overall perspective on digital asset investment. How you achieve that goal depends upon the strategy that you use for cryptocurrency investment.

In terms of general crypto investment through trading bots, you can follow a number of trading practices. But when it comes to executing a cryptocurrency accumulation approach with trading bots, you are usually referred to two choice strategies.

  • Grid trading
  • Dollar-cost averaging (DCA) investing

To give you an idea of what these practices entail, here’s a quick yet helpful introduction to both of them.

Grid Trading

Grid trading refers to an approach where you place your orders above and below a prespecified price. This provides you a grid of orders throughout your trading session.

Due to this working model, grid trading uses a set amount of funds to perform different transactions over a set period of time. When you set up the strategy with a reliable trading bot, you can get a grid of orders and different cryptocurrencies overtime.

DCA Investing

DCA investing suggests you break apart your initial investment amount in smaller transactions that are performed overtime. In this sense, DCA is basically your gateway towards cryptocurrency accumulation with bots.

By using the DCA investing approach, you are able to minimize your risk by not investing all your funds in one cryptocurrency and not spending all your funds at the time of entering the market. In turn, you can benefit from diverse assets as well as varying market conditions.

Pick a Trading Bot

It is highly important that you are able to automate your strategy using a reliable cryptocurrency bot. This provides you with a highly capable way of automating your trading activities. In turn, this makes it easier for you to achieve your goal of effective crypto accumulation.

There are several trading bots in the market that can deliver good performance with either Grid trading or DCA investing. But you need to be careful and use a bot that has the highest possible reviews in either aspect.

In terms of Grid trading, the renowned trading bot called Bitsgap stands front and center. This bot not only allows you to make the most out of the Grid strategy but also lets you benefit from a friendly user interface (UI) in a dependable manner.

When it comes to DCA investing, the popular trading bot known as Cryptohopper shines through its competitors. This platform makes it easy for you to invest small amounts of money overtime through different exchanges and saves you the pain of dumping a huge investment into a market that you are yet to learn about.

Choose a Base and Quote Currency

Whenever you are trading using an automated bot, especially with the goal of cryptocurrency accumulation, you will have to specify which currency you want to gather overtime. You can then repeat this approach with different currencies by performing simple tweaks over an extensive duration of trading.

In this regard, you need to choose a base currency and a quote currency. These factors are listed on exchanges in terms of trading pairs. The currency that is first mentioned in a trading pair is the base currency. Whereas, the second currency that appears in a trading pair is the quote currency.

For instance, a trading pair that lists BTC/USDT and gets displayed as 43,000 on the market shows BTC’s value in USDT. This means that 1 BTC costs 43,699 USDT.

Bots accumulate profit in quote currency, so you need to pick a cryptocurrency you want to accumulate as a quote currency.

By remembering this simple yet effective point, you can use several trading pairs to change your crypto buying and selling approach. This helps you diversify your portfolio overtime by the use of Grid trading or DCA investing.

Set Up Your Trading Bot

After you have chosen a trading pair and specified the required cryptocurrency in question, you can move forward with setting up your bot on your exchange. This requires the step of permitting application programming interface (API) keys.

These keys let the bot access your exchange account funds for trading but without the ability to withdraw them. This keeps you safe from sharing your account password as well as the risk of unauthorized withdrawals.

As mentioned above, Bitsgap and Cryptohopper deliver distinct performance factors for Grid trading and DCA investing, respectively. But they are also excellent examples of user-friendly bots that are easy to set up.

If you are using either of these bots, you can configure them in simple steps for cryptocurrency accumulation trading. You may need to go through a learning curve. But it is fairly simple and only requires a few hours for basic trading knowledge.

📢 Conclusion

By following these activities, you can make sure to start on cryptocurrency accumulation with bots without any problems. However, you need to make sure that you are monitoring and maintaining your bots on a regular basis.

Instead of remaining on your desk 24/7, this practice simply requires you to check in on your bot’s performance every other day or week. In turn, this approach provides you with the required balance of automated trading and monitored activities. This way, you can continuously adjust your trading approach for maximum benefits.

Whatever you do, make it a point to invest responsibly and choose a reliable bot software. If you need any help or guidance in regard to learning cryptocurrency accumulation with bots, take your time in clarifying the concepts first. Use features such as backtesting to your advantage, and only invest funds that you can lose without walking into a financial dead-end.

These choice points ensure that you are able to grow your cryptocurrency portfolio in an ideal manner. As long as you follow best practices and know when to stop your trading, you can continue on this path with minimal issues to boot.