Automated trading platforms can dominate the crypto trading landscape with proper troubleshooting


By Sebastien Ganjalihead of international strategy at Kryll.io

Cryptocurrency trading on centralized and decentralized exchanges hit new highs in the 2021 bull run, with centralized exchanges recording $14 trillion in trading volume, a steep 689% increase from 2020 , and decentralized exchanges recording $1 trillion in trading volume, up a whopping 858% from 2020. And yet, no matter how many people do it, trading isn’t easy.

Amateurs often lack the understanding to record profits, finding themselves instead incurring losses – and experienced traders, despite having several strategies up their sleeves, sometimes lack sufficient liquidity to generate optimal returns. To fill these gaps, developers are now innovating auto trading platforms that bring the crypto trading community together to ensure a seamless trading experience.

Automated trading has been around for a while now in the realm of traditional financial markets. For example, in 2019, automated algorithms processed almost 70% of all transactions on EBS. This allows beginners to engage in active trading while gaining valuable experience. Additionally, because the algorithms execute trades independently, traders have more time to focus on other aspects of their business and life with the added benefit of removing their emotions from the trading equation.

Considering that nearly 90 million people traded cryptocurrencies in March 2022 despite the ongoing bear crisis, the demand for automated crypto trading is quite evident. However, the existing set of solutions is problematic in its own way. Thus, it is necessary to make sure to fully understand the problem before promising solutions.

Is automated trading perfect? – Not really

Backtesting is common in automated systems. It allows traders to test trading strategies before implementing them on live markets. But most existing algorithmic crypto trading platforms charge a fee for this essential service, or limit the number of free backtests. Moreover, failures such as faulty backtesting or over-optimization create gaps between theory and practice: traders achieve exceptional results on paper, but with little resemblance to those in real markets.

Overreliance on automated trading also leads to saturation. This happens when most users use the same policies, mainly because existing protocols offer a limited set of policies with limited customization. And the greater the similarity of strategies, the lower the chances of executing profitable trades. Thus, a lack of creativity and innovative trading strategies is ultimately detrimental to crypto trading in general.

For auto trading systems to maximize trading profits, users need a good knowledge of the cryptocurrency market. But this puts amateurs at a disadvantage, especially when they lack special training beforehand. To avoid discrimination, it is therefore necessary to allow new traders to learn from old ones in mutually beneficial ways. This, in the long run, will increase revenue for both parties.

Crypto Trading Needs Effective Automation

Solutions for efficient crypto trading automation are emerging, steadily rather than slowly. Leveraging Web3 and blockchain technology, innovators are now striving to make algorithmic crypto trading more user-friendly and profitable. This is necessary for wide adoption in this field, as it lowers the barriers to entry into crypto trading for potential enthusiasts.

Drag and drop editors that require no coding skills can help hobbyists gain hands-on experience trying things out for themselves. I think automation with a no-code tool is the best way for traders to enter the space.

Backtesting is necessary not only for traders, but also for the crypto industry in general. This is at least the first step to weeding out ineffective or malicious trading strategies that unnecessarily burden the markets. If traders are able to hone their strategies to perfection, this will pave the way for competitive and sustainable trading markets in crypto. And to this end, traders can take advantage of historical data to adequately test their strategies before entering the real markets for profits.

Innovation trumps saturation and strengthens community orientation

Instead of being prescriptive, emerging algorithmic crypto trading platforms foster innovative trading strategies and practices in a competitive ecosystem. This counteracts the possibility of saturation, delaying its onset, if at all. The most important aspect of these new-age ecosystems, however, is bringing amateur and experienced traders together and forming a globally distributed community.

Kryll, for its part, has developed a bespoke marketplace to help merchants collaborate and exchange ideas among peers, enabling new innovation and revenue streams. Here in this market, experienced traders can monetize their knowledge, sell or rent their trading strategies to amateurs. Traders no longer need to be glued to their computer screens or watch trading algorithms, which pretty much defeats the purpose.

Finally, the dual process of learning through experience and interaction is very important in the current bear market scenario. If crypto trading is to overcome the current low stage, it must make entry and execution easier for potential traders. Therefore, there is a need to provide effective services at low cost. Together, these factors can help the crypto trading industry grow to serve a community of one billion people by the end of 2022. And once that happens, crypto trading volume will exceed in effect its previous records of 2021.

About the Author:

Since the initial launch of its ICO in 2018, Kryll.io has seen over $4 billion traded using automated strategies available on its platform. Users have nearly 300 verified strategies to copy trades from, and the platform recently surpassed 100,000 registered users. Kryll offers a professional market and community of experienced traders who are ready to offer their views on individual investments and market conditions as a whole. According to recent internal research, 74% of Kryll.io’s trading strategies either generated profits or outperformed simple hodling, even in the recent crypto bear market.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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