Whenever simply setting up and integrating a new innovation like cryptocurrency automated bot, the task of selecting the right trading pair will be very important in your quest.
Why?
Well, the pairs and coins you choose have a significant effect on your trading strategies. They directly influence your long-term portfolio. And they also have a direct impact on your short-term investment.
But that’s not all. Since any bot solution is focused on your selected cryptocurrencies, it only will only serve you as well if your choice of pairs is great. Even when one would choose the highest performing solution within the marketplace, it might not generate profits if the fault lies within your pair.
TOP TRADING BOTS
This concept of trading pairs is quite vital, it is extremely important that you select them with proper care and due diligence. Doing so helps people like you to create a profitable long-term investment strategy. Remember that it will help you to squeeze more profits from your specific trading bot.
❤️ Choose Coins That You Trust and Would Like to Hold
When bots get to work, they start acquiring and divesting cryptocurrency according to your instructions. As a result, you automatically hold the digital currencies that you select when you begin to initiate and choose your trading pairs.
Since the bots conduct frequent actions of active acquisition and divesting of transactions, this also means one may end up holding a sufficient number of the currencies that are included in the pair. This is especially true if various market fluctuations cause a stoppage in trading abruptly, or if your bots are simply not turning any profit.
That’s why remember to keep an eye on this concept and that you are selecting cryptocurrencies that are favorable and would have no issues to hold over the long haul.
Remember, the outcome of even a failed experiment is holding a noticeable value in selected pair currencies. Be as vigilant as possible during the set up phase. Traders such as yourself will not want to have coins that continue to go down in value and become worthless. No one wants to hold bitconnect these days, right?
📊 Don’t Pick the Coins With Low Volume
Optimize and pick coins with a substantial trading volume. This will let you keep your plans in order. They will also allow you to have flexibility. No one wants to trade in a dead market.
Traders such as yourself may check the volume of trading pairs or cryptocurrencies through popular exchanges, especially those you will turn to connect your crypto bot.
Choosing large volume pairs will let you make certain that your purchase and sale transactions will continue for a long time. Further, it will also ensure that you are gaining the most value in each and every single rapid market movement.
Contrarily, a low volume on your pair indicates slow movement, less opportunities, and the very real possibility of your trading being stopped all of a sudden.
Keeping this in mind, ensure to do your research on the volume before selecting coins to stick with.
🧪 Use Backtesting When It Is Possible
Choosing to backtest your pair helps you see how they would have fared against past market conditions. This is a very good way of seeing the trading volume, long term viability, and profitability in the long run.
While backtesting is very popular, it is not offered by every automated trading solution. Always look and realize that you are selecting a tool that will assist you and help you derive significant value from this feature against popular entities such as Binance, Coinbase and in other markets.
But you also need to be aware of some other factors in this regard as well. Remember, the backtesting results are not always accurate, even if they are provided by the most reliable automated bot solutions.
That is why one must ensure to leave some margin in terms of calculating the results that are provided to traders like yourself in the backtesting feature. For instance, expecting less profit and lower volume in the current market conditions will augment you and assist in helping you manage expectations. Always act in a way that will help you to minimize and prevent unwanted losses.
🙋 Ask the Community
Another way for selecting trending trading pairs is to inquire and create discussions with other traders. This makes it easier to absorb knowledge about the right pairs that have some possibility of profits.
Thanks to the many and various online communities of cryptocurrency traders and enthusiasts, you will not have to look far for advice. Traders find themselves to be very active on relevant channels on Reddit, Bitcointalk, Telegram or Discord. It is at these locations that you will be able to get relevant advice from people who hold an experienced and neutral outlook on related aspects.
For most relevant results, know your trading bot and find the community that relates to that tool. Find and optimize for the best results with the right people and the right coins.
Effectively determine which pair actually works the best with the bot that you have selected to run your trading adventure for you. For best results, make sure that you are taking advice from multiple people and forums before zeroing down on a cryptocurrency pair to trade with.
⚙️ Test Out Different Approaches
Most of the times, altcoins are available to trade against the most popular cryptocurrencies such as Bitcoin (BTC) and Ethereum (ETH). Tether (USDT) is another cryptocurrency in the form of a fiat-backed stablecoin that is used among famous exchanges for trading.
This is quite beneficial when selecting your pairs. Sometimes, the same cryptocurrency can provide different results when it is paired with different base currency. It changes a lot of factors such as volume and the chances of profitability.
Keeping this in mind, make sure to check for all available pairs against your selected cryptocurrency. If possible, set up multiple trading solutions with different base currencies.
By distributing the funds you intended for trading among these factors, one can get real-time results on the pairs that will perform the best.
📢 Conclusion
Simply put, always seek out and use all of the available resources to check for the most feasible and viable bots that will do the job quite well. Create, plan, and make the best informed decisions regarding which trading pairs are right and which ones to steer clear from.
Feel free to view my results with automated trading solutions. Always know that there are a wide variety of profitable pairs mentioned there already. That information can help you get an idea of how different cryptocurrency pairs work in real markets on a day to day basis.