Are cryptocurrency trading bots really worth it? This is a question that many traders have in their minds. Over the past 10 years, we have seen the rise of cryptocurrency trading bots. Since cryptocurrencies are highly volatile, known for their price to move up and down, trading bots have been seen as a great opportunity to make profits.
There are many risks involved when trading manually, as there are some risks when trading using a bot. But, let’s take a look at the 3 most important things you should know about cryptocurrency trading bots.
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They get the job done on their own
Trading bots are software that automatically trades on their own. They execute orders based on parameters defined by the programmer or the user. Bots use an “API” to talk to crypto exchange and place buys and sell orders for you. “API” stands for Application Programming Interface. This is an interface that allows an application to send a receive specific types of data. In this case, it can be an interface with the exchange to buy and sell orders and to collect price and balance data.
Trading bots meant the beginning of something new. Something that would make use of complex algorithms combining variables to trade in the financial markets. This would turn the traditional trader working endless hours analyzing diagrams in a person who backtests strategies and monitors trades.
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They operate 24/7
Trading manually requires a lot of screen time and effort. As humans, we have our obligations, and sometimes it is hard to find time to commit 100% to something, whether it is trading cryptocurrencies or something else. This is the reason why cryptocurrency trading bots are an excellent option. They can trade on their own even when you are not there. Whether you are sleeping or have gone somewhere with your family on the weekend, the bot is doing its job.
Furthermore, a human typically works 40 hours a week; nevertheless, a bot can work 168 hours a week. Therefore, it can capture 4.2x more opportunities. And, bots are consistent when they engage in a piece of information or an announcement they’ll respond in the same way repeatedly.
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They are easy to use
When you hear “trading bot”, it sounds complicated, and it gives you the impression that it is hard to use it. Some might think that they are excellent at trading but complicated to use. It’s quite the opposite, though. Trading bots are designed to be used efficiently. Even if you are a beginner, you can figure them out. An easy bot to use is the bitcoinera.app. It also implements scalping, a strategy that involves profiting off small price movements.
Traditionally a trader would have to monitor a couple of screens, meaning a couple of markets simultaneously. But how many markets can a human monitor at the same time? Let’s say maybe 10, but no more. On the other hand, automated strategies, other than sticking to your plan, they will be able to trade an unlimited number of markets. Whether your strategy operates in ten or a hundred assets, a trading bot can cover each of them.
Video – Cryptocurrencies
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