No matter if you are a novice cryptocurrency user or a seasoned trader, finding the perfect trading bot is the ultimate dream for anyone trying to buy and sell these digital assets.
But as widespread as that goal might be, it is just as difficult to achieve it. With a plethora of bot solutions to choose from, it can be difficult to find the perfect tool that fits all your requirements to a T.
With that being said, there are some crucial features that every good automated platform should have from the get go. Knowing about these qualities helps you shortlist your choices easily, and makes it easier to pick a service that’s a perfect fit for you.
If you are currently looking for a cryptocurrency bot to elevate your trading mechanisms, then keeping these 5 features in mind will help you go a long way.
Explanation of the Working Principles
Regardless of the type of bot, its developer history, and its pricing model, its provider should always offer you certain explanations about how the bot works and what kind of strategies does it use.
This is essential in telling the good apart from the bad, since any trading service that doesn’t explain exactly how does it generate its profit can be a downright scam. On the other hand, those bots that take their time to explain their strategies and their mode of operation demonstrate that they have something tangible working behind the scenes in terms of generating potential profits for you.
Keeping this in mind, make sure to only select tools that are forthcoming about their trading strategies and have transparency set as one of their shining features.
Another must have feature in a good bot is cloud connectivity. With our growing tendency to depend more upon our mobile devices than our stationery computers, it is imperative that the platform we use as modern traders can connect to all of our devices without any hassle.
Since cloud connectivity provides you with this accessibility without compromising on security, it is necessary that your chosen bot operates through a cloud based application.
The added accessibility that you get through this feature lets you monitor your bot from anywhere, and allows you to adjust any settings without having to worry about getting back to your desk at your home or office. Overall, it helps you arrange and streamline your bot’s operations in a super easy way.
Another crucial feature is backtesting, where your trading bot allows you to test your strategy based upon past market movements. This lets you see the effectiveness of your chosen strategy and the efficacy of the bot itself without spending your funds in the name of research.
As the name suggests, backtesting is based upon real world market statistics that have been recorded in the past. By emulating the execution of your current strategy against actual market movements, you can see exactly how your bot would have fared in the real world and what can you expect from it moving forward.
With the increasing popularity of automated trading, the backtesting feature is getting more and more commonplace especially among credible and advanced bot solutions. Keeping this in mind, make sure that you choose a platform that offer this feature, and try to stay away from those which don’t.
Demo Mode/Paper Trading
Similar to backtesting, demo mode or paper trading is yet another way to see your strategy in action without putting your real money on the line.
But there’s a major difference between these strategies.
As compared to backtesting where you put your strategy to the test against past statistics, demo mode or paper trading uses the current market conditions to generate your strategy’s results in real time.
This allows you to see how effective your strategy is in accordance to present market conditions. As a result, you are able to modify your strategies and related factors in real time, but without the disadvantage of losing money in the process.
This is why, this particular factor is essential if you need to test a few strategies without affecting your trading budget. Due to the popularity of this feature, most of the reputable bots allow you to play with fake money before you start putting your actual funds on the line.
Support and Community
Whenever you are about to start using a new trading bot, you need all the help you can get in order to operate it properly. That’s why, having something to fall back on in terms of customer service as well as community support is the sign of a great solution.
This especially holds true if you are a novice trader with minimal to no experience of trading assets on the open market. But it is just as important even if you are an experienced trader with plenty of expertise under your belt. And there is a very good reason for this.
Even if all bots are built upon the larger objective of buying and selling cryptocurrency automatically, each of them use a different interface. Some have different ways of approaching the same strategy, while others boast of new features that are exclusive to their application. All of this is enough to make even the most advanced traders feel confused about the usage of an automated tool that they have never utilized before.
Since trading is all about using your actual funds and getting the most profit out of your transactions, it is imperative that you do not leave anything to chance and clarify any hint of ambiguity that you see while using the bot. Having customer support or community forum helps you navigate your way through difficult situations, and ensures that you do not feel lost while using the new solution.
This support doesn’t always have to come through conventional phone lines. It can be delivered via email or even through live chat on the service’s website. You can also reach out to the community through its dedicated forum, Telegram or Discord accounts.
A great bot usually has one or more of these avenues in place, so you do not have to feel stranded in the face of difficulties. Keeping this in mind, make sure that your selected tool offers the required level of support or has an active community behind it.
Based on your knowledge and bankroll, there can be a lot of other settings that might seem more or less important to you. But judging by the most crucial requirements of cryptocurrency traders, these 5 features are essential in every trading bot.
If you make sure of their presence in your preferred solutions, then it can make crypto trading that much easier and simpler for you.