Crypto traders make many mistakes. The eagerness to make profits results in errors. A mistake may cause you to lose all your investment. Having a checklist is important. It will help you avoid mistakes when using a crypto trading bot.
1. Read terms and conditions
A platform has its terms and conditions, you should read them to have a smooth trading experience. In addition, you should follow instructions or suggestions the platform may provide in order to achieve a smooth bitcoin trading experience. This is regardless of whether you are using a crypto trading bot or not.
2. Protect your password
The passwords in a crypto wallet and a trading platform must be kept secure. Your access to your bitcoins, trading account, and profit depends on it. It must be easy to remember, but not too easy. Your birthday, house address, birthplace, etc., are a “big no no”. A secure password has random letters and numbers. It must also have an external backup. This is in case you lose or forget it. If written on paper, you must have sole access to it. Keep in mind that, if you lose your back up, everything could be lost. Since the crypto trading platform does not save a copy, no one can help you recover it.
3. Secure your device
Updating the device from where you access a wallet or perform bitcoin trading (with or without a crypto trading bot) is necessary. Otherwise, you run the risk of exposing your software and the information you have stored. It is important to have an antivirus, as you will probably download files and visit websites that could be contaminated with malware. The best practice is to use a single device to perform your digital trading activities, bitcoin wallet, and trading platform access.
4. Remove your bitcoin when not actively trading
Exchanges are not 100% secure. There is always the possibility of an attack. If they are not insured, you will lose everything. This includes your trading capital and profit. For this reason, whenever you are not actively trading, it is preferable to not keep your bitcoins on an exchange for a long time. Crypto is also susceptible to colluding attacks. This is when one or more parties own 51% of trading power. They could cheat the network into accepting unlawful transactions or other nefarious actions. The best place for your bitcoin is in your wallet, preferably a “cold wallet”.
5. Study market trends
Relying on software is not enough. Combining software, such as a crypto trading bot, with your experience is sure to give you an edge in a volatile market. While there are efficient crypto trading bots out there, experienced traders know that finding a strong trend and trading in the trend’s direction leads to profitability.
6. Split your investment
The crypto market is very volatile. Some cryptos are more volatile than others are. When involved in crypto trading, it is best to diversify the investment. This will protect you from the risk of a single asset. It will also allow you to profit from the spread.
7. Keep a journal
This is a good practice in the crypto trading. Keeping track of trading signals and opportunities can end up bailing you out in the future. The internet is filled with information, which you can access. A good example is the information published in the whitepapers of digital assets, normally in connection with their ICOs.
You can verify an asset’s viability and document your conclusions. Besides, you can only keep track of so many things, so keeping a journal on crypto trading can prove to be worth it.
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