Crypto Bots : Is automatic trading with cryptocurrencies worth it?

Once again, a new trend is emerging: The so-called crypto-bots or crypto-bots are supposed to make trading with digital currencies much easier. By automatically recognizing signals, the bots react directly to them and buy or sell cryptocurrencies at the desired prices.

For investors, this means less time investment in trading. This goes down well with the new ages and generations. However, it is important to know not only the advantages but also the disadvantages of automatic trading and then decide whether it fits your own strategy. Read our tips on this here.

What Are Crypto bots?

There are various crypto bots that you can resort to. These are programs through which you perform automatic trading in Altcoins or even Bitcoins. Trading can be done either only through an exchange or also within a selection of different markets.

If you opt for the variant with different markets, you can benefit from even more signals. Some providers already allow trading with small amounts, such as the crypto trading bot Kraken, which is also incredibly trustworthy and user-friendly enough to start investing immediately.

A distinction is made between the following bots:

Program
Open Source Trading Bots

Description
The variants are available free of charge, as they are open-source programs. Nevertheless, they are not  necessarily  suitable for beginners. The reason for this is that these are technically very challenging programs.

Program
Bitcoin Arbitrage Bots

Description
This variant of crypto bots is particularly popular. They   are designed to trade directly across multiple exchanges.  Again, it is important to learn about the technology before  using the bots.

Program
Classic Trading Bots

Description
Very often, people resort to the classic trading bots. They  are a very good  choice because here you can fall back on  already known strategies.

Are the Results Comparable to Direct Trading?

If you are thinking about using a crypto bot, you naturally want to achieve good results with it. It has been shown that good bots are able to achieve results comparable to those of professional traders.

Some experts recommend that traders focus entirely on day trading. This is where the highest profits are possible. This is due to the fact that digital currencies are very volatile assets. This strategy is not recommended especially for classic investing, such as stocks.

For stocks, the buy-and-hold strategy is one of the strongest recommended strategies for private investors. However, this strategy also has its limitations.

In addition to that, it is worth mentioning that using a bot will also make your life easier. The cryptocurrency market in particular is so broad that it is difficult to keep track of everything here. Usually, investors decide to focus on one or even two to three digital currencies.

Due to the strong daily price fluctuations, it is important to keep a constant eye on the market and be able to react quickly. This is the only way to ensure that you also achieve the highest profits.

What Are the Advantages and Disadvantages of Trading With a Crypto Bot?

Are you still unsure whether you should really use a crypto bot? In that case, it may help you to get an overview of the strengths and weaknesses of this option.

Advantages:

• Less time is required for you to trade
• Use of signals at the right time
• Trading across multiple markets is possible

Disadvantages:

• Time investment is quite high at the beginning
• A strategy must be worked out first
• Partly good programs cost money

For Whom Are Crypto Bots Suitable?

Whether the crypto bot is a good choice for you depends on several factors. One of the most important foundations for automated trading to work is a good strategy.

This means that you should already be somewhat familiar with the digital currency market. If you are still a complete beginner, it is important that you first set up an account with a crypto exchange and learn how to trade digital currencies.

This way, you can gradually develop a strategy that can then be adopted for the bot.

Social Trading as an Aid in Finding the Right Strategy

A good tip is to deal a little with social trading before you start. This is a special form of trading. Experienced traders make their strategies openly available. These can be viewed and also copied.

If you are a beginner just trying to find a good way for yourself, you can benefit significantly here.

You will learn more about the digital currencies themselves and their market, see different strategies, and can find out which of the solutions is most suitable for you.

Comparison of Crypto Bots is Recommended

There are now numerous crypto bots on the market. Therefore, it is recommended to take your time to compare them here. Find out about the costs, the features and also the ratings.

This will give you an objective overview and the decision as to which software it should be will be much easier.

Basic Questions About Bitcoin Bots

Let’s see what you should ask yourself when you are going to start automatic trading. Don’t worry, these are just a few simple questions that will protect you from bad experiences.

• If they are really so profitable, why don’t developers just use their own money? That’s the first question you should ask yourself before you review or test a bot. Nevertheless, some really do give great results.
• How safe is the payout for an investor? Such bids can be a Ponzi scheme where payouts are covered with deposits from new investors. If no new investors come in with sufficiently large amounts, the operators of the bot are insolvent.
• Who are the people behind the bot? Are these companies and their owners even known? If they are not, the risk of investing should be considered very high.