Pros and Cons: Different Roles of Crypto Trading Bots from Mila's blog

Like any popular novelty, cryptocurrency copy trading has a lot of questions. People want to know whether the program really works, whether it is possible to get a stable income with its help. Its major element, the trading strategy, handles the successful operation of the program.

This is a set of parameters that determine which decision you will make. In trading, an automatic assistant analyzes the cryptocurrency platform.

Robots are released to the market with ready-made settings, but some of them can be changed manually. It can change the more parameters the bot has that, the more the trader influences the strategy. But if a professional can make a profit from this, the abundance of parameters will only confuse beginners. The risk of suffering losses increases at the same time.

If you are not yet an experienced trader or a good analyst, it makes sense to choose strategies with the parameters already set. Such bots perform a huge number of operations, for each of which it charged the counterparty a commission. Therefore, many companies even encourage such cooperation.

What is Crypto Trading Bots?

This is a program that performs specific actions for conditions. Here, we are talking about buying cryptocurrencies when the exchange rate drops and selling them when they grow.

Most bots work exactly according to this algorithm. There are also more complex bots. They can analyze the chart of exchange rate changes for a period of. For example, 7 days, and make the purchase of cryptocurrencies without waiting for the maximum drop.

Advantages of Such Bots
  1. Saving time. It does not get tired, and it does not need to sleep.
  2. Extensive coverage of cryptocurrencies and exchanges (if an arbitration bot is used). To cover such a volume of information, sit at the computer around the clock. With a bot, it is enough to spend one day setting up the bot, and then only observe the profitability of trading and adjust the algorithm.
  3. Fast analysis, fast transaction execution. That’s just the time it takes more. Therefore, using a bot allows you not to miss when you need to conduct a transaction.
  4. For inexperienced traders, it can become a reference book of various trading strategies. We just watch his work and get new knowledge.
Disadvantages of Bots
  1. A deep analysis. The program accords to an algorithm. It has no intuition. It cannot adjust its actions by itself. A person is more flexible. The analysis of the situation by a trading bot is preloaded into the program. While a person can draw information from the outside (for example, very often make weather news from the media).
  2. It does not know what to do in emergency situations. We described something similar above. Abnormal situations, in case of correct analysis, can play both in the negative side and in the positive.
  3. Instability of the program code. Sometimes bots can hang, lag, crash, and so on. No one is immune from this, so the trader needs to constantly monitor the work of the bot.
  4. The probability of using a fraudulent bot. Yes, there are some on the web. They can steal personal information, transfer funds to hackers’ wallets and many other illegal things.
How Trading Bots Work

This is a special program that helps to trade financial instruments, including cryptocurrency. It accords to the set parameters and can free the trader from routine work. The market participant can set the indicators himself. There are several types of trading bots. The simplest ones buy cryptocurrency when the price of it decreases, and sell it with a further increase in value. If choosing a bot is more difficult, it will use additional data.

Such advisors will place an order only if these data correspond to the parameters set by the owner. For example, they can study the digital currency exchange rate chart for a certain time. If the cryptocurrency has fallen within 15%, the bot will buy it. If the drop exceeds 25%, he will refuse to enter a contract.

There are two main types of robots:

  1. Trading, designed to work within the same platform. Their income is the difference between buying a cryptocurrency and reselling it.
  2. Arbitration. These assistants trade on different exchanges. They can buy, for example, bitcoin on one site, and sell it on another, where it costs more.

Each trader chooses an assistant himself, but both bots bring benefits.

Final Thoughts

Bots are excellent assistants in trading cryptocurrencies. The expediency of using them will depend on the trader’s experience. Experienced traders rarely trust the work of the program. Unless it is a proven product that allows you to configure a flexible algorithm of work. Novice traders will definitely appreciate the bot, and may not want to give up such a convenient tool.

It should be remembered that the quality of any cryptobot is determined by they effectiveness and the actual cost. Stable performance should characterize cryptocurrencies bot on the stock exchange.


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Anna
Nov 13 '22
Cool and very convenient platform for creating a bot at https://happyhamster.io/bots Set up bots and now they trade for you, go nuts! Simple settings for notification - here you don't have to log in every time to check the bot in a deal or complete a deal. Minimalism in design and nothing more. I have never seen so many instructions for beginners! Definitely worth a try!Cool and very convenient platform for creating a bot at https://happyhamster.io/bots Set up bots and now t...See more
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