If you are more familiar with stock investing, you might think of a trading bot as a robo-advisor. A robo-advisor can automate your investments based on your risk tolerance and other factors. But the cryptocurrency bots on the market right now can't automatically adjust your portfolio based on your answers to certain questions. You have to give the bot a lot more instructions.
Third, and most importantly, successful use of a bot requires a deep understanding of the digital currency markets and an excellent supporting investment plan. For some investors, a bot can be a useful tool to assist in their cryptocurrency trading. For others, however, by the time they have done the work of preparing to properly use a bot, they may no longer need its services. It is trivial to make a working bot, but not so trivial to have a profitable one.
Trading bots are widely available programs that connect to a user's cryptocurrency exchange and perform trades on their behalf. There are several types of trading bots available, including arbitrage (arb) bots that capitalise on the price difference between exchanges. An in-depth knowledge of the digital currency markets and an excellent supporting investment plan are crucial to the successful use of a cryptocurrency trading bot. Due to pre-set trading rules, bots optimise long-term performance without the short-term costs of emotional human interventions.
This cryptocurrency trading bot module uses APIs to buy or sell the cryptocurrency asset strategically. To make any kind of tangible profit with bot trading, it is ideal to have a crypto stack to start with. Cryptocurrency trading bots can often save you a lot of time and are more cost-effective than hiring human experts. Trading bots outperform the market, and it is in the interest of users to keep their exact performance a secret, so they can retain their edge.
To choose the best trading bots for the job, factors such as reliability, security, transparency, cost-effectiveness, ease of use, etc. have to be taken into account. However, by automating the trading process, bots ensure consistent trading discipline even in volatile markets where fear may lead you to sell or luck may make you buy. Named after Gordon Gekko, the antagonist in the 1987 film Wall Street, Gekko is a free, open-source trading bot that is compatible with many exchanges and is controlled through a web interface.
Unlike traditional stock markets, cryptocurrency trading never stops, making it virtually impossible for private traders to track market fluctuations, diversify risk, reduce errors and ensure disciplined trading 24/7/365.Typically, investors search for the bot or bots that are most useful to them and then download the code from a developer.