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Key Features to Look for in a Crypto Trading Platform
Trading is an activity that involves diverse possible scenarios amid market changes and asset price fluctuations. The crypto market is a challenging environment that implies countless chances of making profits at the cost of significant risks. In the face of this reality, traders should wonder what key features to look for in a crypto trading platform. This article pinpoints these features and serves as a guide to understanding how they work.
Understanding Crypto Trading Platforms
Crypto trading platforms emerge as optimized solutions to help traders survive the market challenges and risks by enabling them to operate with multiple functionalities regarding buying and selling crypto coins and managing risks.
Depending on the type of market, distinct functionalities are suitable, and different challenges take place. In modern crypto trading, the markets split across different types, such as the following:
Each of those market types presents unique scenarios according to their operation.
While the spot market allows traders to acquire actual portions of a crypto coin, the futures market operates under contracts that contain representative quantities of an underlying asset. The options market is an even more different one.
Spot Vs. Futures: Basic Operations
We can lean on the distinctions between the spot and futures markets to understand the role of crypto trading platforms and what key features to look for in them concerning trading performance, risk management, and enhancing the chances of making profits.
For instance, traders can attend to the spot market with primary operations like buying and selling with "limit orders" or market orders.
Futures trading may require more dynamic operations. Some traders might be more interested in stop-limit or stop-market, which provides other types of procedures for entering the market with a position.
Once traders are in an active position, whether in the spot or futures market, handling the risks of losing is a priority that should not be overlooked. In crypto trading platforms, the essential features to protect a trade position boil down to setting stop-loss orders and take-profit targets.
Stop-loss and Take-profits to Discussion
How much is a trader willing to lose at the expectancy of potential rewards? The answer is the quantity related to a price at which the trader can no longer hold the position. Therefore, this trader will pre-set a stop-loss order.
In other words, once the price of an asset reaches a price at which an operator is losing a certain percentage of the balance, the trade will trigger the stop-loss order to mitigate the risks of ruin in case of letting the trade perform longer and the price continues going against it.
That former explanation would belong to managing the losses in the spot market. Undoubtedly, that scenario may be replicable in the futures market. However, this latter bears additional aspects to consider.
Since futures contracts do not hold actual quantities of an asset, and this modality allows traders to use leverage, the way associated risks manifest along an active position differs from spot.
Futures contracts imply, among other elements, a liquidation price: a quotation at which the trade closes regardless of a pre-settled stop-loss since the trader lacks enough margin (balance) to support the negative PnL. In this case, the stop-loss acts in function of the position size that, ultimately, determines the liquidation price.
On the other hand, take-profit targets ensure unrealized gains in a profitable position. Within spot and futures markets, TP targets work similarly. The traders set price targets at which they want to realize their profits by getting out of the position.
Take-profit targets may be settled at a single price or spread along multiple prices. The latter requires key advanced trading features.
Key Features to Look for Advanced Trading
Beyond exchanges, specialized crypto trading platforms like Altrady offer advanced features that optimize the trading experience. The key here is gathering multiple functionalities in a multi-exchange terminal that enhances typical features of conventional trading platforms.
Let's overview some.
Smart Trading and Order Types
In Altrady, traders can set stop-loss and take-profit objectives and automate them alongside other options.
About TP targets, positions can set up to 10 profit targets with trailing. On the other hand, stop-loss settings allow traders to choose between market and limit orders and protect gains by automatically following the take profit targets, so if the price reverses, the position can still preserve earnings.
Moreover, with Smart Trading features, traders can automatically determine the position size and risk percentage.
Portfolio Management
Portfolio management features are vital for long-term holdings and capital allocation across multiple assets. From the perspective of a multi-exchange, this is even more relevant since it enables traders to interconnect several accounts to a single terminal for seamless portfolio management.
Bot/Automation
Bots work under the basis of algorithms, which automate execution according to specific signals or parameters. From this feature, we can highlight the following bots:
- Grid Bot for sideways price movements.
- DCA Bot for averaging investments.
- QFL Bot to seize price bounces.
Tradingview and Webhooks
Tradingview integration is a feature that any trader should look for in a trading platform, not just because of the chart analysis tools but also for webhook support to customize a signal bot through pine script like users of Altrady do and automatically open positions based on signals.
Market Data
Counting on live-market data such as order books or market capitalization helps traders make trading decisions amid open positions or during the research phase.
Price Alerts
Simple but powerful, alerts are ideal for day traders and swing traders when waiting for meaningful price action at specific zones.
Analytics
Last but not least, analytics are indispensable for tracking progress and spotting areas of improvement in the trading strategy and performance.
Conclusion
Crypto trading platforms generally offer basic functionalities for buying and selling. We leaned on the differences between spot and futures markets to denote those basic options. However, features like Smart Trading or portfolio management represent key options for an advanced trading application.
Altrady is a crypto trading platform with multi-exchange integration features where beginners and professional investors manage assets across multiple accounts simultaneously, seizing algorithmic, automation, and bot functionalities. Sign up for a free trial account today.
