When people began spreading the word about crypto trading bots, it ignited curiosity and excitement for everyone in the trading arena. Yes, crypto trading bots are real, and they can help you win in the trading space. However, don’t think of bots as humanoid programs that guarantee profits. Trading bots are computer programs that run on computers and trade on behalf of a human trader.
There are many advantages to using crypto trading bots which will be outlined below. For one, unlike humans, the bot never gets tired of monitoring unstable market conditions. This is one unique quality that makes them perfect traders. Trading bots don’t have a brain of their own, and they need to be programmed to behave accordingly. The trading strategy needs to be pre-programmed into the bot, and the bot acts only according to this strategy.
Trading bots is a great way to make some passive money without putting any effort into it. So if you are still unsure whether to use one, you can always try Gunbot trading.
How Does a Crypto Trading Bot Work?
People sometimes act on impulse, which can work against your trading strategy. That is why crypto trading bots can provide you that leverage into trading like a pro.
The key to becoming a successful cryptocurrency trader is analyzing the market conditions and then acting accordingly. With cryptocurrency, this process becomes a little tricky. As the prices of cryptocurrencies are highly volatile, it is tough to predict their price. To do this, one has to master cryptocurrency technical analysis.
Even after you master this, you cannot always stick to the computer screen analyzing the market conditions. Using a crypto trading bot makes this process streamlined, intuitive, and easy for any trader.
A cryptocurrency trading bot is software that allows you to set a trading strategy and algorithm. The software then follows this trading strategy and places orders on your behalf. The best part about most trading bots is that they run on the cloud.
This means that you need not even have to keep your computer on to execute trades. Just give the bot the required permissions, and it will execute profitable trades for you.
Pros of Using Crypto Trading Bots
Emotionless
People are emotional and act out of emotion which can work against you when you are trading cryptocurrencies.
Cryptocurrencies are highly volatile assets. They are also highly manipulated by the giant whales of the market. These price fluctuations often lead to us making errors. This will result in you placing a wrong order.
This is not the case with the trading bots. Without any human emotions, these bots are in no way attached to your money.
Thus, any signs of market manipulation have minimal or no effect on the functioning of the bot.
Efficiency
When given the permission, trading bots will analyze the market conditions of several cryptocurrencies simultaneously and place an order as soon as there is an opening for a profitable trade.
This is not the case with human beings. We can only analyze one cryptocurrency market condition at a time. Thus, by the time we switch to view another cryptocurrency, we would have lost a golden opportunity to place a good trade.
These things make these automated bots highly efficient.
Consistency and Reliability
Humans need some time out – and that can hurt our trading strategy. As humans, we cannot always sit in front of the computer and monitor our investments. We all need an ample amount of sleep as well. While we sleep at night, the cryptocurrency market does not.
Thus, you are missing valuable opportunities to make extra money because of this. The trading bot, on the other hand, can run 24/7. Thus, any trading opportunity is never missed, and you end up profiting because of this.
Speedy or Instant
We all take a long time to place an order. This is because we cannot work at the same speed as the machines. Because of the volatile nature of cryptocurrencies, a good trade may no longer be good if you take a lot of time to execute the order.
With trading bots, trading orders are placed instantaneously. Thus, this increased speed is a massive advantage for us.
Cons of Using Crypto Trading Bots
Time-Consuming
Trading bots don’t do well during high volatility. Thus, human intervention is always needed. As the bot is emotionless, it is in no way attached to your money and might end up trading successive losses and eventually lead to a significant loss.
Not Designed for Beginners or New Traders
If you’re new at crypto trading,, you need some time to learn the ropes before using crypto trading bots.
Cryptocurrency trading bots are a great way to earn passive income all year round. However, this requires you to have a certain degree of knowledge about what is happening in the background.
While the preset trading configuration is good, it often does not yield the best results. Meddling with the configuration without knowing much about the technical aspects of cryptocurrency trading might be very dangerous as it can lead to the loss of all your funds.
Hence, cryptocurrency trading bots are not very useful to new traders.
Security Issues
Trading bots are not impenetrable. Trading bots use API keys to gain access to your funds on an exchange. This is not very reliable. If anyone gains hands on your API keys, you will end up losing all your funds.
Additionally, most of these bots do not have a lot of security protection. Thus, they are easily hacked. This is the most significant disadvantage of using trading bots.
Partner Up with a Trading Bot!
There are many advantages to using crypto trading bots. Still, it is recommended to use them when you want to avoid repetitive and time-consuming tasks, achieve a high degree of accuracy, and have something that can keep an eye on the market 24/7.
Partnering up with a crypto trading bot automates everything – but you have to set the game plan for the bots.
Casual traders should remember that while cryptocurrency trading bots can make your life easier, it’s not the silver bullet to generating profit. You will actively need to fine-tune your selected bot if you want it to work the way you want it to. Gunbot trading can make this process easy and seamless for you.
On the flip side, crypto trading bots are not “a set it and forget it” solution — they may be emotionless, consistent, and can automate your trading strategy. However, the best trader or neurons behind the game would still be YOU.