Algorithmic, or Automated, trading is something that has been quite the norm for investment firms and companies in many other financial markets for quite some time but hasn’t really been available for retail traders in a big way. Most large scale investment groups make their money from automated trading, estimates are that in traditional financial markets roughly 90% of futures trades and 80% of cash trades are automated with no human interaction. It’s easy to see from this how a retail investor getting into trading will be at quite the disadvantage. While automated trading is almost entirely controlled by the elite firms and groups in the financial world, Autonio’s goal is to bring automated trading in crypto to the retail traders to help level the playing field and give more options to anyone, no matter how much starting capital they have.
What is Algorithmic Trading?
To keep it short and put it simply, Algorithmic trading is the process of automating the execution of orders based on a predefined set of rules that account for variables such as order size, timing, price, refresh, etc. Once all the variables are put into the system, you simply let the trading bot or terminal take over.
Why is it needed?
In general, most traders are not very good at trading manually, with only a small percentage of them able to generate a profit, and historically, do not have access to the tools that large firms or traders use. With this being the case, it’s important to the crypto space and to traders in general in this new arena to be able to give themselves all of the advantages of automated trading in order to increase their chances of success in generating profitable trades.
While there is no perfect strategy and nothing is guaranteed, it’s important to give yourself as many advantages as possible.
What are the advantages over manual trading?
Algorithmic trading has been backtested. What this means is that thousands of data points from trades have been tested on historical data in order to see if these algorithms work, and if they do work, on what type of market they work. This data can then be implemented into the new system in order to give it a framework to work with on current trades.
Algorithmic trading takes emotions out of the equation. Humans are emotional and in trading, what this means is that we let those emotions get the best of us: getting out too early, getting in at the wrong time, FOMO, FUD, etc. By automating the trading process, emotions are not a component that needs to be accounted for, no more hesitating or second guessing a trade.
Algorithmic trading can help you learn how to manually trade and can build discipline. By watching the automated trading, one can watch, learn, and try to understand how it’s working so that they might be more disciplined and less emotionally involved when trading manually.
From this, you can see that algorithmic trading has a huge potential upside for crypto and for improving retail traders performance in the market. Reducing emotion, automating the finer details of trading, and utilizing data from backtesting research will all go to improving potential performance.
Autonio is here to help provide all of this to investors and traders of all levels. The team is hard at work backtesting all different sorts of algorithms on historical crypto trade data as well as using different algorithms to trade in the current market in order to make Maker 2.0 and the future of NIOX Maker the best product it can be. The future of trading in crypto is automated, and Autonio is here to start it.