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Automated trading, also known as algorithmic trading, refers to the use of computer programs to automatically open and close trading positions based on pre-defined rules or conditions. In contrast, manual trading requires traders to make decisions about when to buy or sell assets based on their own market assessment. Both approaches have their upsides and downsides.
The Drawbacks of Manual Trading
Manual trading requires a significant amount of time and effort, as traders need to monitor the markets, analyze data, and make decisions based on their analysis. Aside from being time consuming, manual trading is susceptible to human vulnerabilities. Manual traders are susceptible to making emotional decisions, which can lead to errors and inconsistent results. In addition, they may not be able to react as quickly to market events as automated trading systems can. Moreover, manual traders may have inconsistent results due to their reliance on intuition, which can vary from trader to trader.
The Advantages of Manual Trading
Manual trading allows traders to use their own judgment to make decisions based on a wide range of factors, including news events, market trends, and technical analysis. At the same time, it allows them to use their experience to make trades that are not based solely on data and rules. Manual traders can use their emotional intelligence to take into account factors such as market sentiment, which can be difficult for automated trading systems to quantify. They can also adapt to changing market conditions and adjust their strategies accordingly, which can be difficult for automated trading systems to do.
The Drawbacks of Automated Trading
Automated trading systems can be complex and difficult to develop, which can be a barrier to entry for many traders. They also rely heavily on technology, which can be vulnerable to technical glitches, power outages, and other issues.
Bots are based on pre-defined rules and conditions, which can limit their flexibility and ability to adapt to changing market conditions. Automated trading systems also lack the human judgment that can be important in making trading decisions, especially in situations where market conditions are uncertain.
The Advantages of Automated Trading
Automated trading can execute trades at a much faster speed than manual trading, as the computer can instantly process vast amounts of data and make decisions based on pre-programmed triggers. Also, it eliminates the emotional bias and subjectivity that can sometimes affect manual traders. The computer makes decisions based solely on the predefined rules and data, which can help reduce errors and increase consistency.
Bots can be tested on historical data to see how they would have performed in the past, which can help traders identify potential flaws and improve their strategies. In addition, automated trading systems can monitor the markets 24/7, which can help traders take advantage of opportunities as soon as they arise.
Currently one of the best-regarded bots on the market is ArbiSmart, a fully automated, EU authorized crypto arbitrage trading system, launched in early 2019. Crypto arbitrage is an exceptionally low risk, bear-resistant trading strategy that profits from price disparities across exchanges and generates the same, consistent return, whichever direction the market is moving.
The ArbiSmart platform offers investment plans for a broad selection of time frames, as short as 1 month or 3 months and as long as 2, 3, or 5 years. Users just deposit funds in one of 30 different FIAT and cryptocurrencies, decide on the length of the plan and then the platform takes over, with profits being paid out daily. Depending on the user’s account level, they can earn up to 49% a year, on investment plan balances in all supported currencies, except for RBIS ArbiSmart’s native token on which they can make 147% a year.
Both automated trading and manual trading have their pros and cons and the choice between the two approaches depends on the trader’s individual preferences, trading style, and level of expertise.
However, if you want to keep earning a passive profit, while you get on with your day, your best option by far is to open an account with an automated trading platform.
*This article was paid for. The Cryptonomist did not write the article or test the platform.
Source: https://en.cryptonomist.ch/2023/04/21/guide-to-arbismart-automated-trading/