Due to the nature of a compressed air system water can become a problem. Many people are unaware that when you compress air you are compressing the moisture in the air and as the air cools you experience condensation.
The first step in solving this problem is to drain your air receiver tank. How often to drain depends on many factors. Most systems need to be drained multiple times daily so you just have to experiment. An automatic drain is an inexpensive way to remove condensate without having to manually drain the receiver multiple times daily.
Draining the receiver is a must and in some cases will eliminate enough moisture for your application. If after draining you still have moisture an air dryer will be the next step