As technology grows and improves, they are replacing humans in many facets. Trading is one such area where the need for human traders is soon being replaced with bots.
Crypto Trading Bots
If you have been following or trading in Cryptocurrencies, you must be aware of how volatile they can be. You can buy them at one rate, go out for a coffee and come back to see you have lost a lot of money or earned a real lot of money over a cup of coffee!
This is where trading bots come into the picture. Crypto trading bots specifically trade in Cryptocurrencies to increase your earnings and maximize your trading profits without losing any time. These bots don’t take breaks and react much faster than humans. They have algorithms fed into them, and they make their calculations, predictions, and moves based on these.
These algorithms enable them to use all information around them. Thus, the general mood of the market is factored in along with other major activities that can cause an impact on the values of Cryptocurrencies.
Why A Crypto Trading Bot
There are several reasons to invest in a Crypto trading bot rather than depending on a human trader. Though this may sound unethical to the human race as technology replaces the need for humans, it makes a lot of profitable sense for a serious investor.
Here are some of the reasons a Crypto trading bot is in use:
- The bots are online 24*7 and do not take breaks or go home at the end of office hours.
- They can work in any time zone and can be useful when trading in different parts of the world.
- Trading bots react much faster than humans, thus saving you a lot of time and making very timely decisions that can increase your earnings to a great extent.
- Well designed bots continuously collect data about Cryptocurrencies’ performance and can accommodate price discrepancies and use it to your advantage.
- They don’t get tired or go through a block when they are overloaded with information constantly. They can process it all and come up with a suitable move.
Why Not A Crypto Trading Bot
Like with everything, there is a negative side to this technology too. Here are some reasons why trading with a Crypto trading bot may not be an ideal decision:
- These bots are not designed to take risks like human traders. They act in a predicted pattern based on the algorithms fed to them and they are not designed to take “a chance,” which is one of the lifelines of online trading.
- Trading bots cannot predict based on instincts or surrounding human emotions. They only know numbers and figures. Their decisions and moves are solely based on this.
- A trader cannot pick up the phone and give instructions or change the course of his investments easily. He has to go through the channel and give all requirements or changes in writing, and these have to be implemented in the algorithms.
- Crypto trading bots are very expensive when compared to human investors. So, you are left with lesser money to trade.
- One needs to understand not just the market but also how to use a Crypto trading bot before they can start trading with the help of these bots. This can take time, and by then, one may not need the services of the bot.
How To Make Profits
If you are keen on using a Crypto trading bot to maximize your trading profits, here are few pointers:
- Understand how these bots work before you can invest in them
- Find a good platform that can provide you with effective bots. Their algorithms have to be effective and have the edge over the others, to help their bots perform better.
- The company owners or leaders should have real-time experience in Cryptocurrency trading. This will help them come up with suitable algorithms to help the bots perform better.
- Understand if they are interested in your welfare. Are they willing to reduce fees or change tactics to improve your earning or go with the set rules? The rigidity can cost you a lot in trading.
Trading online requires one to be alert, smart to understand the trends, and utilize all information around to analyze the movement of the cryptocurrencies. Crypto trading bots can come in very handy provided you understand them and choose wisely.