Posted 2 years ago | by Ben Armstrong
Trading Tools that Every Crypto Trader Should Use
A crypto trader’s investments are just as good as the tools used in the decision process. These are some tools every trader should use.
To learn more about these tools and why they will help your trading, make sure to watch Bitboy’s latest video!
Trading Tools are Necessary
The crypto world is a place full of potential waiting to be exploited by traders. However, as there are no central authorities or safety nets, researching beforehand is everything when it comes to making sound financial decisions.
This research process requires analysis, planning, and execution, which is only possible by using different tools. Each tool offers different advantages depending on each trader’s particular goals but something is clear: to survive and make the best out of crypto, new investors will need to be prepared for everything.
As new trading tools are being created by the day, it might be hard for new investors to identify what they need to use, but there are some basic categories everyone should have covered when starting.
Tracking Crypto and Facilitating Decision-Making
The first and most basic tool in an investor's toolbox should be a good Crypto Price Tracking platform. While there are several options out there, the most popular are CoinMarketCap (CMC) and CoinGecko.
These two are used by new and seasoned trainers alike, as they offer a lot of useful information to start researching their next move. However, Coingecko has some features that make it a better option for traders who are just dipping their toes on crypto.
While CMC has almost twice the visits in the last 6 months than Coingecko due to being more popular, Coingecko has features like its “trust score” that can provide inexperienced investors with useful info, as it is a way to evaluate how much an investor can trust an exchange or the availability of a trading pair.
By using different algorithms to parse data such as web traffic stats, order books, trading volume, trade frequency, liquidity, and others, CoinGecko can determine how likely a trading pair is to have high, fair, or low liquidity.
This is super useful for investors looking to trade a specific pair without knowing if there is enough liquidity to do so. A lack of liquidity for a specific pair means that these investors would have to go through other pairs, which could entail potential losses in extra fees and change rates.
Another use of the trust score is when it comes to ranking Spot Exchanges. As a trader, investors will find themselves interested in investing in specific projects that are not listed in the most popular exchanges. The trust score will allow them to have a better idea of how trustworthy the exchange is when it comes to liquidity, security, and popularity.
Coingecko also offers some information that differs from that of CMC when looking at the information for a specific token, like Trading volume to market capitalization ratio, a voting option to evaluate investor sentiment toward the coin, tradingview candlesticks, Onchain indicators, information on social network activity, and GitHub integration.
Making Complicated Data Simple
Charting tools are a great option to graphically organize information that is being analyzed when making a decision. When it comes to charting, TradingView is one of the most popular platforms out there.Making Complicated Data Simple
It allows investors to visualize market data by creating customizable charts that let the easily organize and filter information, as well as including social features that allow them to take advantage of charts from other investors as well as staying theirs.
The platform also has the sharing the knowledge as one of its cores, as it is a place where people can discuss everything related to investing. Even after 8 years since its launch, the platform continues being one of the best and most popular options available to traders around the world.
TradeView offers a free version that is perfect for beginners to jump into the world of crypto, with more powerful packages being available as they advance in their journey and require more power.
Focusing on Decision Making by Automating Trading
Most starting crypto investors are not doing it full-time and as so, they won’t have a lot of time to spend waiting for the perfect moment to trade. This is why automating trading is such a powerful tool for them.
Platforms like 3 commas offer good trading bots that allow for a high degree of customization when it comes to defining the investing parameters.
While setting up a trading bot might seem intimidating at first, it is pretty easy to do so with 3commas. It has bots with different strategies, which allow beginners to quickly start using it as well as seasoned veterans to have a high degree of control over it.
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