Top Day Trading Mistakes to Avoid When Using A Crypto Trading Bot

Tue Aug 22 2023

daytrading as an algotrader

Algorithmic cryptocurrency trading has become increasingly popular among traders. The use of cryptocurrency trading bots and algorithmic trading platforms is actively changing the way traders approach the market. In this article, we will explore the key strategies and best practices for algorithmic cryptocurrency trading, and provide valuable insights for traders looking to maximize their profits.

Buying Too Many Coins

One common mistake that new algorithmic traders tend to make is trading too many cryptocurrencies at once. While it may be tempting to invest in numerous digital currencies, this can result in less profit. It is important to be patient and rational in your investments, focusing on a select few cryptocurrencies that show promising potential. If your strategy is buying too many assets, your buying signal may be too permissive and needs adjusting. On algo crypto trading platforms like Aesir, you can set a hard limit on the maximum number of assets in your portfolio, thus reducing the risk of spreading yourself too thin.

Lack of Available Funds

Another common mistake that algorithmic traders sometimes fall into is the lack of available balance to trade with on your account. In order for your strategy to perform the optimal way, your crypto trading bots need to be able to always fulfill an order, when there is a positive signal. Not being able to fulfil an order due to unavailable funds could lead to lower performance. It’s better to place smaller traders consistently as opposed to more significant orders that are only filled half the time.

Not Choosing the Right Exchange

Selecting the right cryptocurrency exchange is essential for successful algorithmic trading. It is advisable to choose a reputable exchange that has been around for a while and accepts a variety of cryptocurrencies. Avoid trading on newer exchanges that have not been thoroughly tested, as they may have withdrawal restrictions or be unavailable at critical times. Aesir currently supports Binance, Coinbase and Kraken and we’re adding new exchanges constantly.

Not Managing Liquidity

Liquidity is a critical factor in algorithmic cryptocurrency trading. Illiquid exchanges can prevent you from selling your cryptocurrency at a reasonable price, while exchanges with low trading volumes can limit your trading opportunities. To mitigate these risks, you might want to ensure that the assets you’re looking to trade have sufficient trading volume and liquidity on the exchange, otherwise your crypto trading bot will be unable to sell at the optimum time. Again, choosing a reputable exchange contributes to this.

Not Doing Your Own Research

Research is key to successful algorithmic cryptocurrency trading. With the vast number of altcoins available, it is crucial to thoroughly research the currencies you plan to trade. Focus on cryptocurrencies with high trading volumes and market capitalizations, starting with Bitcoin and gradually expanding to other altcoins as you gain experience.

Not Implementing Risk Management

Implementing risk management strategies is vital to protect your investments. Having a clear plan for risk management can help minimize losses and improve overall profitability. As a day trader, setting a stop loss and a take profit is essential to your crypto trading bot’s success.

Not Testing Your Crypto Trading Bots

Algorithmic crypto trading platforms such as Aesir allow traders to test their trading bots before taking them live onto the market. This is absolutely crucial as it will provide you with a benchmark performance and help you avoid any losses. You should never run an un-tested crypto trading bot onto the live market before either Backtesting, Paper-trading it or both.


Algorithmic cryptocurrency trading offers tremendous opportunities for traders to profit from the volatile cryptocurrency market. By avoiding common mistakes, traders can increase their chances of success. To access some of the best tools in crypto trading, sign up for a free trial of Aesir algorithmic cryptocurrency trading platform today.


©DEM Group 2022