With the rise of leverage trading bots on crypto-exchanges, small-time traders can now realistically look at making a good living at trading in cryptocurrency.

Leverage trading allows a trader to reap the profits of a much higher stake than they initially paid out. For instance, if a trader posts a trade of £100 with x100 leverage, he or she is effectively trading with £10,000.

The downside is that the higher the leverage used then the tighter the liquidation price. And with the volatility of crypto, especially Bitcoin, this makes trading somewhat of a gamble at the moment.

Trading Bots

With this clear but unpredictable opportunity, more and more traders are turning to the use of bots. Many exchanges set up API access to their platform that allows a bot to buy and sell much quicker than a human user utilising browser-based websites. The challenge for traders is to set up the parameters within the bot in order to maximise returns.

As with all new money-making industries, many services have sprung up around the main resource. In this case, there are a number of companies that provide direction “indicators” both in the short term and the long term. Some bots allow for the inclusion of these indicators and so offer the possibility of truly automated trading.

The trader would input the parameters for buying and selling dictated by the indicator service, then press go and watch the profits mount up! When the preset profit target is met then the bot will close the trade and start the process again. The bot would have redundancies built in so if the price goes against the trade then another trade is opened to minimise any loss and completely offset the original layout.

But this is no easy set-up! The variables are many and the algorithms required to give traders any level of confidence are still being debated and refined. But if they can return an efficiency of 99% or higher then it could be a game-changer. Using compounded profits, the sky’s the limit and cryptocurrency could change from an interesting experiment in global finance to a wide-ranging millionaire maker.

Author: Appthisway.com