Trading in Ethereum and using a robot is quite thrilling. Unlike the manual traders that have to remain glued to the screen of their computers, traders that use robots can enjoy doing their daily routine without worrying about their investments. The only challenge with this kind of trading is that most of the robots that are being marketed to the masses are scams.
The other problem is that most investors don’t know how to use Ethereum Code Software. Below are some tips that can help you use a trading robot like a pro.
1. Stick with a Single Asset
This is where most investors get it wrong. They imagine that a robot can be used on different assets. While there are some robots that are designed to execute trades in all cryptocurrencies, there are others that can only function with a certain asset as specified by the code developer.
For instance, if a robot only trades in Ethereum, it might still trade in other cryptocurrencies but not deliver the results you want. This is because code developers consider the behavior of a cryptocurrency before building a robot for it.
2. Test with Demo Account
Before you use any trading software on a real account, it’s recommended that you first put it to the test for a few weeks if not months with a demo account. Testing will give you an opportunity to prove whether the robot really does what’s it’s designed to do.
By testing you will be able to know what to expect once you switch to a real account. There are many Ethereum investors that have blown their accounts just because they didn’t bother to test the software. If the losses exceed the wins, you should avoid using such a robot until proven otherwise.
3. Use a VPS
An Ethereum robot can’t trade efficiently unless it has been hosted on a VPS (Virtual Private Server). Without such a server, the robot will stop trading when you turn off your computer or there is a power outage. When the robot is hosted on an internet based server, trades will be executed automatically regardless of whether you are around or away.
4. Money Management is Key
This one goes without saying. You can not make profit unless you manage your Ethereum trades. This is because you can easily blow your account by using a big lot size. Even if it’s the software that does all the trading, you have to ensure that it uses a specific lot size that is appropriate to the size of your investment.
Remember, the market will always fluctuate regardless of your entry point. If you use the correct lot size, you will be able to wait until the trade moves in the direction that you had earlier anticipated.
5. Don’t Mix Automated Trading with Manual Trading
Combining automated trading with manual trading is like mixing oil with water. If you mix the two methods of trading, you will not be able to gauge the performance of each option. Once you have decided to use a robot, you should just sit back and let it do the magic without your interference.
All you have to do is set the take profit, stop loss and lot size parameters and let it analyze the market conditions on its own.