Do cryptocurrency trading bots really work?

Instead, these automated traders are rather used to make various smaller profits that accrue over time. Just consider the fact that Wall Street firms have been using algorithmic trading for years. In fact, in the last decade, algorithmic trading bots have overtaken the entire financial industry, and algorithms are now responsible for most of the trading activity on Wall Street. Many cryptocurrency trading bots claim to have a high level of successful trades.

However, remember that the cryptocurrency market is constantly changing and price trends are always fluctuating. If you plan to take a completely hands-off role when it comes to investing, you may not see the same kind of results as if you actively manage and reprogram your trading bot based on market conditions. Ideally, bots should actually generate a profit and that profit should be greater, on a risk-adjusted basis, than if you had simply bought the same coins and held them for the entire time. If you are looking for an automated trading platform, Exchange Valet is not going to be a good choice for you.

While it offers super useful trading features, it's not really a trading bot. It is also limited to Binance and Bittrex. This may or may not be a problem, but it is something to consider. Bots implement specific trading strategies, competing to achieve the highest "win rate" or percentage of profitable trades.

However, trading bots have not traditionally been available to the average investor, as they cost a significant amount of money. There are now many bitcoin trading bots available, some for free and others for a subscription fee. Most cryptocurrency trading apps work simply: you authorise the bot to buy or sell an asset as long as it reaches a specific price point or indicator. This cloud-based bot offers a marketplace where users can buy and sell trading strategies, along with backtesting tools.

The return conditions are moving targets, so trading with bots is not really a "set it and forget it" type of operation. Although Pionex supports manual trading via crypto-to-crypto conversions, its main product is its selection of trading bots. However, it is possible to automate trading by connecting a third-party trading bot to your Coinbase account with API keys. All of these features combine to enhance the cryptocurrency trading experience, and Quadency supports automated trading on Binance, Bittrex, Coinbase Pro, Kucoin, Liquid and OKEx.

Bots can come with trading strategies already installed, but the user can also customise the bot to their preferences. Although Haasbot is probably the most comprehensive of the trading bots currently available, doing much of the work with relatively minimal input required by the user, to provide this service is quite expensive, with costs ranging from 0.04 BTC to 0.07 BTC for a three-month period. Provided the bot receives the correct data and works with appropriate algorithms, it can trade assets with a higher chance of making a profit. In addition, a correctly specified bot allows trades to be executed faster and more efficiently than the trader would be able to do manually.

Casual investors are not the primary target of trading bots, and if your intention is to buy and hold Bitcoin, then a trading bot is probably not the right investment for you. In addition, a bot will not take into account external factors that may affect the market, such as world events or breaking news, so it can make bad trades without the input of a human trader. GunBot is a well-known cryptocurrency trading bot that uses individual strategies that are fully customisable to suit your trading style.

Nichole Distilo
Nichole Distilo

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