Do trading bots really work?

There are many varieties of cryptocurrency bots. One of the most popular types is the arbitrage bot. Arbitrage bots are tools that examine exchange prices and place trades to take advantage of discrepancies. Since the price of a cryptocurrency like Bitcoin tends to vary somewhat from exchange to exchange, bots that can move fast enough can beat exchanges that are late in updating their prices.

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. Trading bots have their advantages. A bot can take some of the emotion out of your investment decisions.

Many investors panic when the value of an investment plummets. Bots can prevent you from panicking by selling or buying a currency simply because everyone else is doing it. If you are looking for an automated trading platform, Exchange Valet is not going to be a good choice for you. Although 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. Those integrations make Coinrule a good beginner bot on its own, but the bot also comes with pre-made trading templates that make the bot automatically react to market changes in specific ways. Arbitrage cryptocurrency trading bots are tools that examine prices across exchanges and consequently make trades in order to take advantage of variations.

Trality is one of the most unique cryptocurrency trading bots out there due to its support for the Python coding language. What a crypto bot tends not to be is a get-rich-quick solution for an investor not looking to put in the time and effort necessary for success. No one wants the details of their successful trading bot to come out, as this triggers copycat approaches and the advantage is diluted. The same company is also behind HaasOnline Trade Server (HTS), which is an automated system that is designed for trading cryptocurrencies.

If you're looking to earn between 3 and 6 l year on your cryptocurrency holdings with a trading bot, you'll probably find something that works for you. As the phrase implies, risk allocation is where the bot allocates risk according to a specific set of parameters and rules set by the trader, which typically includes how and to what extent capital is allocated when trading. Named after Gordon Gekko, the antagonist in the 1987 film Wall Street, Gekko is a free and open source trading bot that is compatible with many exchanges and is controlled through a web interface. Bots and rumours about bots are endemic in the cryptocurrency space, with behaviour, good and bad, often attributed to their actions.

If you are more familiar with stock investments, you might think that a trading bot will function as a robo-advisor. Profitability conditions are moving targets, so bot trading is not really a set-it-and-forget-it type of trading. Although it lacks algo-based trading functions, it offers traders all the tools they would find on a conventional trading platform. However, one should be sceptical about bots offering guaranteed returns, and especially about the profits cryptocurrency traders claim to have made with their help.

Nichole Distilo
Nichole Distilo

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