We are happy to announce that we’ve added autopilot trading to our feature set. It allows traders to buy and sell cryptos automatically, according to the schedule they set up, regardless of price, volatility, or economic conditions.
How does the Autopilot purchase of cryptos work and what are the benefits?
Many investors have realized that trying to time the markets is an aberration. Instead of putting all of their money into an asset at the same time (and thus at the same price), many investors are using dollar-cost averaging (DCA).
Dollar-cost averaging allows investors to defer the timing of their investments by spreading out their entry points, rather than investing a lump sum at one time. This strategy of investing fixed amounts at regular intervals (e.g., $50 every week), is used by investors who want to reduce the impact of volatility on their investments and thus reduce their risk.
skalex’s recurring buy/sell feature gives exchange users the ability to apply the DCA investment strategy to cryptocurrencies by creating recurring purchases and sales of cryptocurrencies.
When markets fluctuate, users can buy cryptocurrencies at a lower cost in a falling market, will not time their purchases to avoid a peak in a rising market, and will remain invested in a more flat market – ensuring that in the long run, the lows and highs will even out and result in an “average” price that reduces vulnerability to the volatile swings of the crypto market – and avoids the strong temptation to time the market.
The autopilot purchase of crypto feature has already been successfully implemented in one of our exchanges, the Trijo Exchange.
For their exchange users it’s a smart and easy way to invest in cryptos. They can schedule a recurring buy/sell in a few steps and buy/sell crypto automatically on an hourly, daily, weekly, or monthly basis.
Once they set up the autopilot, then everything is fully automated. The exchange platform will keep buying Bitcoin regularly at the scheduled intervals. The users have, of course, the option to cancel the recurring buy/sell at any time.
Are there Risks of Using the Autopilot Feature?
The drawbacks of autopilot include a constantly rising market in one of the currencies offered. A lump sum purchase at the beginning of the rising period would yield a higher return than a monthly purchase, as you are buying at higher and higher prices, which increases your average cost due to a rising price over time.
However, crypto markets are known to be volatile, and the disciplined approach over the long term – buying at lower and higher prices – would be more beneficial as it removes the emotional component of crypto volatility and market timing, resulting in imbalances when selling at a low price and buying at a high price.