How crypto bot increases win rate?
If you are a trader, you know that cryptocurrency trading is one of the most profitable ways to earn money today. The cryptocurrency market can be more adequate for traders than markets like Forex due to high volatility. However, many Forex traders lose money when trading in the cryptocurrency market, and their win rates are low.
You must know that the win rate is a very important benchmark in the trading, and if this number is low, the trader is better not to trade because his money is lost. At the same time, there is a very simple solution to this problem! Using a trading bot will significantly increase your win rate. Do you know how?
What is the Win Rate?
Win rate refers to the ratio of the number of profitable trades to the losing trades. This standard is one of the most important means that show whether the trader's strategy is correct or not. Win rates are different for each person in each market and are affected by many human and non-human factors. For example, if a trader trades in an unbalanced mental state, he will have unsuccessful trades, and the win rate will be significantly reduced.
Knowing how the win rate is calculated, you will gain a deeper understanding of success and adjust it more easily. The win rate is obtained from the following formula:
Win rate = 100 / (1 + X)
X in this equation refers to the risk to reward concept, obtained by dividing stop-loss and take-profit.
Stop-Loss and Take-Profit Relation
When it comes to risk management, determining the stop-loss level for your trade becomes one of the first steps to take before opening a position in the market. The stop-loss, also known by the sign (S/L) is a type of order used to close a trade at a certain price point.
The main purpose of this action is to limit the losses of a trading operation, especially when the trader's forecast is wrong. In this way, they only risk a small percentage of their capital, which is already pre-planned.
The take-profit market order or market order to take profits is a market order that allows the trader to make a profitable purchase or sale on a target profit price, activating a market order.
If you divide the stop-loss and the take-profit, you get a number that can show the amount of profit to loss in each trade. This number is different for each trader, and obviously, many factors affect this number. Some traders trade a small number but try to be more likely to make a profit. Some other traders take risky trades, which reduces this rate. However, there is a way to increase profitability for beginners as well. This solution is to use a trading bot.
What is Trading Bot?
A trading bot is software that can trade instead of humans. It may seem impossible to many people, but a trading bot works even better than traders in some aspects.
This bot first performs technical analysis of the cryptocurrency and measures the trading conditions. The programmer, using predefined code, has given the bot the ability to perform calculations in a variety of situations and estimate the potential of a cryptocurrency to make a profit in trading.
It is not the only advantage of a trading bot. This software can connect to your exchange account without any risk and perform all your tasks automatically. You may not yet understand how a Trading bot can increase in win rate.
What is BitMEX automated trading bot?
How does Trading Bot Increase the Win Rate?
A trading bot is a machine, and the machine does not feel. Emotions are one of the destructive factors in trading that can disrupt the trader's conditions and cause him to lose his capital. These feelings are sometimes positive and lead to the opening of dangerous positions with high risk.
A trading bot can significantly eliminate the errors caused by emotional trades and give you a clearer picture of the profitability or failure of your strategy. However, this is not the only way a trading bot can increase the win rate.
Speed is one of the most important factors in the success of trade in the cryptocurrency market. A trading bot analyzes many times faster than humans and opens and closes positions in a fraction of a second. Undoubtedly, eliminating the factor can eliminate many trades and show how skilled the trader is in trading.
How much should the win rate be?
It is an interesting and important question! As we have said, the choice of take-profit and stop-loss can directly affect the win rate. Sometimes even a percent higher or lower than these limits can significantly affect the trading result. For this reason, you cannot precisely control this number.
Since a trading bot can be used to evaluate market conditions quickly, it is possible to adjust stop-loss and take-profit. As a result, you can also choose a specific win rate for yourself and start your trade accordingly.
It is not easy for inexperienced traders as making the wrong choices can cause them to lose their money. You can get a premium version of trading by easily controlling these numbers without the need for calculations to determine how much the best win rate can be for you according to your abilities and strategies.
A trading bot is one of the most useful tools to reduce trading errors and increase the win rate. At first glance, this tool may look like a machine that man has to drive. However, if you know how to use this bot and are familiar with artificial intelligence, you know that this bot works wonders.