Can You Make Profit From Automated Crypto Trading Bots?

Can You Make Profit from Automated Crypto Trading Bots

By Ella Mackness

Automatization has moved society forward in every aspect and now it’s time for crypto trading. This growing industry generates almost 2 billion dollars and is expected to grow. Crypto bots follow the algorithm, or a set of rules, and execute trades on your behalf. But is it all that simple and neat?

The Benefits of Using AI to Do the Heavy Lifting

There are, of course, many pros to using crypto bots. They can analyze data faster and react almost instantly to market changes.

Emotionless

While we can sometimes be held back by our emotions, the trading bots are designed to be unemotional. We might wait for just another second for the price to be a little higher, but a trading bot won’t.

The AI crypto trading removes the human factor that poses the greatest risk – greed. The main risk-management feature of any system is to stick to the pre-set rules. While for humans this can be hard, an automated trading bot will do it without a hitch.

Risk Management and Allocation

Risk management is easier in a pre-defined system. Many of the bots, such as Trality, Pionex, or Bitsgap come with templates. The most risk-management-oriented crypto trading bot out there is, of course, Botsfolio.

This verified crypto trading bot is based on a quiz you take. Instead of making up rules along the way, they set up a bot according to your risk preferences and investment goals. Not only that, but the bot allocates your funds to minimize risks.

Another trustful bot that does this for you is 3Commas. This bot has the Smart Trading feature, which contains TakeProfit and StopLoss options. The algorithm basically takes profit and closes a trade simultaneously if it poses risk to your funds.

High-frequency Trading

A bot can make money even on the slightest moves of the market. The trick is that it can generate a high frequency of trading in short periods of time. This is still being debated, but it is not illegal. Amongst other things, the new Insider Protocol’s Bitcoin trading bot can do this at an amazing level.

High „Thinking“ Speed

What takes humans hours to analyze, bots can do in seconds. Realistically speaking, a person can follow closely only one market at a time. Maybe two, but that’s one hell of multitasking. Automated crypto trading bots can follow any number of exchanges you want them to.

What’s more, they can analyze data faster. So if you were to consider a trade, you would check the market, analyze data, try to predict a movement, then place a trade. It takes time. A bot does all of this on your behalf in seconds

It Can Operate 24/7

Crypto trading bots can operate 24/7. You can go to the gym, movies, eat, or sleep and they will do everything for you. This is especially useful for people working full time.

But For Every Pro There Is a Con

Trading crypto for profit is a high-risk endeavor. Using bots makes little to no difference.

Trading Bots Pose a Security Risk

While trading bots are useful, they can also pose a security risk. The APIs used to connect bots and exchanges can be exploited by hackers. It is important to consider this and check trading bot reviews, as well as security breaches before you sign up with any of them.

Even Robots Need Human Interference

As liberating as using a crypto bot may seem, it still needs human interference. The market is highly volatile and you need to be able to adjust your strategies. Customizing bots and template strategies is possible with some bots, like Trality or Coinrule.

Comprehensive Knowledge of the Market

Although many of the bots and platforms cater to beginners and even advertise as such, one can hardly be successful without understanding the market. This is especially important when employing the template strategies and customizing them to suit your trading style.

Automated crypto trading bots have been around for some time. They can certainly help novices but are not a guarantee of turning a profit.

On the flip side, if you are well-versed in the market and understand its laws, it is possible to fine-tune a bot to do all the heavy lifting for you. You can still go about your day and turn a handsome profit.

Scam trading bots

Scam crypto trading bots are those that promise you hefty profits without any work on your part. These are usually too good to be true, and if you sign up for them, you will most likely end up losing your money.

So, how can you avoid these scam bots?

For starters, do your research. If a bot sounds too good to be true, it probably is. Also, check user reviews and see what other people have to say about it. Two good review examples are Profit secret review and Immediate Edge trading bot review. Finally, always test a bot out with a small amount of money before investing more. This way, you can minimize your losses if the bot turns out to be a scam.

About the Author

author

Ella Mackness have a successful track record of driving adoption and establishing trustworthy, long-term communities for lifestyle, technology, and cryptocurrency companies worldwide through digital marketing, social media management, growth hacking, events production, and content creation. Before moving into blockchain/cryptocurrency technology in tech industries, I gained expertise in web development.

My deep understanding of the blockchain industry allows me to stay ahead of the curve, and my knowledge of the scene and its community is unmatched.

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