Seven Common Misconceptions About Crypto Trading Software
Good crypto trading software can pose several advantages. It eliminates emotions and executes your trade even when you are unavailable. In a way, it makes you more innovative, and creates the feeling of being a techy trader.
Considering the current level of adoption of bitcoin trading software, we have noticed that there a few misconceptions. These are capable of holding people back from embracing crypto trading automation.
Is any of the below holding you back?
1. The software cannot do complex trading
This is common among traders who are new to software trading. Automation was introduced into digital trading some years back. Software or bots do 75% of stocks traded on the American stock exchanges. First, the software automates trade entry and exit by using money management rules. This allows the software to monitor and complete trades. Besides, the software is free of the emotions of trading. Emotions of trade are unique to humans. When a bot handles trades, it only uses preset criteria to justify a trade. No gut feeling or hesitation as a man. A trade is placed once the set criteria are met. Bitcoin software trading rules are based on simple conditions. Strategies unique to the platform may also apply.
2. Trading software was developed to replace humans
There is still a long way until we reach a world of SkyNet. Bitcoin trading software is not meant to replace humans. Instead, it assists human traders to avoid errors that could lead to losses. Manual trades are riddled with emotions that influence how a trader views risk. Software, however, does not have this. Besides, a human is still needed to set the trading parameters for the digital asset trading software.
3. Not trading real money
The common belief is that fiat is the only true currency. The idea is that a state must have issued the currency for it to be “true”. That changed with the entry of BTC. In real sense, money is everything that has value and purchasing power. If an asset, physical or digital, has these characteristics, it can be considered as money. Bitcoin has all of these features. Therefore, it is considered money. One of the chief concerns with BTC is its virtual nature. Since digital assets lack a physical backup, new traders are wary of investing in them. Though the BTC is a virtual asset, it is money nonetheless.
According to The Economist, BTC has three qualities useful in a currency. First, it is hard to earn. Second, there is a limit to the supply of BTC. Finally, you can easily verify each BTC and each BTC-transaction. This is since all BTC transactions are public. They are traceable on the blockchain where they are permanently stored.
4. It is based on MLM
At first, many exchanges exploited the ignorance and eagerness of early traders. This, in turn, resulted in a general distrust for crypto trading. The trading software is free of this exploitation. On bitcoin trading platforms, you do not give money to an individual. It is simply personal entrepreneurship assisted by software. Its sole purpose is profit by using a set of parameters. The software trades on web platforms. This certifies the nature of digital assets. The algorithm trades on exchanges through supply and demand. This is very similar to the activity of a Stock Exchange. The difference is that you do not need to monitor.
5. It will crash from volatility
Trading software uses an efficient algorithm that scans the volatile market for the best trading opportunities. First, it compares the performance of BTC and other similar digital assets. Then, to increase its accuracy, the software reviews huge amounts of historical data. Then it compares these data to present market trends. This technical analysis lets it find trading signals and trade BTC profitably.
6. The software will go the way of Linux
Linux was created to change how software was run. It was an open-source software developed by Linus Torvalds in 1991. It failed to become the dominant operating system it was meant to be. Instead, it became useful only for tech giants and a group of loyalists to run their systems more efficiently. Critics allude this to a total failure of its mission. Bitcoin trading software is a social and financial revolution. The forecast that it could succumb to a similar fate is outlandish.
7. It is unsafe
Hacks have plagued crypto trading since 2010. At one point in time, the exchange giant Binance, lost over $40 million worth of bitcoin to hacks. The crumble of Mt. Gox in 2014, after losing $460 million, is the most shocking of all to date. Those hacks resulted in bad publicity for bitcoin trading. Although the security of crypto trading has improved over the years, the threat is always looming. Just like the sword of Damocles. This is the reason why many new traders are wary of trading crypto on exchanges. They are built in such a way that you do not have to turn over control until the exact moment before a trade.
Misconceptions are mostly based on hearsay. However, mindsets and opinions change with experience. The only way you will come to understand the importance of automation in the crypto world is is by trying one. There is quite a lot of bitcoin trading software out there, one of many is Bitcoin Loophole.
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