Let’s begin the journey to unraveling trade bots with a little stop by on cryptocurrency investments.
After people noticed cryptocurrency’s rising tendencies, they decided trading in it would be a profitable venture. Hence, like buying and selling stock in the physical stock market, cryptocurrency is the stock they buy and sell crypto markets. This trading process is known as cryptocurrency investment. Although the crypto market is a lot like the stock market, they have a lot of differences.
For one, the stock in crypto markets is decentralized. That is, there are no governing bodies, and prices and most other factors are determined by demand. Also, crypto markets are in session 24/7, unlike the stock market which closes. This 24/7 availability means you can make money from trading cryptocurrency while people sleep. But what happens when you need some shut-eye?
Introduction to crypto trading bots
The human body requires. It’s just a law of nature. But while you’re asleep, somebody is awake. And you’re missing out on all the transactions that could happen between you and them bringing you a lot of profit. In fact, you might not even be asleep. What if you have a 9-5 job? For whatever reason, you might be unable to attend to your cryptocurrency transactions, and this means you’re missing out on profit.
The best part of technological advancement is that it’s constantly trying to solve problems, and this problem is one that technology has technically solved. There are now crypto trading bots that carry out transactions in the crypto market with little or no human interference. They’re automated and can help you catch up with all the profit your tight schedule would usually cause you to miss. So, whether you’re mostly busy, or you’re a stay at home parent, crypto trading bots can come in handy for you. But how do they do that? Read on to find out.
What are trading bots?
Cryptocurrency trading bots are how you buy more time for yourself in the crypto market even if you’re busy with other things. They’re computer programs that determine the best time to trade cryptocurrency. To make maximum profit, you’re supposed to buy cryptocurrency when prices are low and then sell when prices rise. So, if you can’t monitor the market yourself for these buying and selling times, crypto trading bots can do that for you and even carry out the transaction. They’re also useful to inexperienced crypto traders. Since they require very little human intervention, investors who don’t know much can make use of them.
The current global economic situation made people see the need for income that didn’t require moving around and cryptocurrency rates really rose. It was very profitable and it really suited the situation, so lots of people opted for it. However, not everyone who opted for it knew what they were doing, so crypto trading bots became their savior.
A brief history of trading bots
Experts say crypto trading bots are based on a model of trading not created in 1949. This model was created by Richard Donchian who discovered a set of rules for the trading of funds. Since then, these rules have been adopted by famous traders like John Henry in the 1980s. Now, recent technology has made them so that they’re available on the internet.
How do trading bots work?
Crypto trading bots are computer programs designed with an algorithm that automatically carries out crypto investments. Some algorithms monitor previous market transactions while others monitor market news. The information derived will help them determine perfect entry and exit points.
Inexperienced traders should know they need to do a lot of research if they want to know how to make the crypto trading bot constantly make profits. However, the bot handles the main factors for any transaction in the crypto market. Professionals who use trading bots know how to handle the remaining parameters but don’t want to be too active in trading.
Crypto trading strategies
Crypto trading bots use strategies in the trading process. This strategy determines when they buy and sell and choosing what strategy to use is based on a variety of factors.
The earliest ones use arbitrage, which is buying at a low price and monitoring the market for the ultimate hike in prices. During this hike, they sell and the difference between buying and selling price is the investor’s profit. This strategy is mostly used for investors looking for long term investments.
The second and more recent strategy is market-making. This strategy is used for short-term investments and tries to make profits off of spreads. The process involves constantly trading and trading in multiple altcoins. It’s a way to quickly make money off of the differences in the rates of the different altcoins.
The usefulness of trading bots
Crypto trading bots do more than just buy you more time on the crypto market. If you find a great crypto trading bot with wonderful features, here are things it can help you with:
- Repetitive Tasks: Especially with short term investments, you’ll have to perform and re-perform certain tasks. However, the crypto trading bot can help you avoid the repetition with a ’copy and paste’ kind of feature.
- Monitoring time: There are sensitive times when rates are at their highest and these are the best times to sell. A good crypto trading bot can help you look out for these times and perform the transaction when you’re not monitoring the market yourself.
- Re-investing: If you’re trying out a crypto trading bot with a single initial deposit, you’ll need to buy more cryptocurrency after you sell the ones you’ve stocked. Crypto trading bots can help you buy more cryptocurrency when prices are low with your balance while leaving the rest as profit.
How to choose the right trading bots
With the increased popularity of trading bots came an increase in the number of trading bots, however, not all the trading bots you see are legitimate. Some don’t perform as they should while others are downright scams. Here are some things to consider when choosing a trading bot.
- Simple interface. The whole point of working with bots in the first place is to avoid stress. Hence, you should look out for crypto trading bots that don’t stress you.
- Reliability: You never know when that golden opportunity to make a maximum profit will show up, so bots are supposed to be there, always watching. When choosing a trading bot, go for one that will always be there, watching so you don’t miss out on anything. How do you know what bots are like this? Well, you can just look for user reviews. Word of mouth is one of the most effective forms of advertising, showing what users have to say about a commodity or service really matters.
- Security: Trading for profit means leaving your funds for transactions and the profit made from trading with the bot. With that much access to your currency, a trading bot must be really safe and secure. You can’t really be sure at first, so you just have to check out what the brand says about its security. If that doesn’t work for you, you could look for user reviews on the security of the trading bot to find out if it can be trusted or not.
- Profitability: The aim of cryptocurrency investments, through any means, is to make profits. So, your trading must be able to deliver enough profits as often as possible. Look for what the brand, other brands, and the users of the bot have to say about the bot’s profitability before deciding to use it.
- Transparency: Although its actions are automated, you must be able to see what transactions the bot is making and how much it makes off of those transactions. Complete transparency helps you make sure you’re not being cheated in any way.
- Efficiency: The crypto trading bot must be efficient in its analysis of the trading market. And the subsequent implementation of this analysis, else, the hot won’t make any profit.
Trending trading bots right now
Ever since crypto trading bots got popular, a few ones have completely taken the spotlight. Investors and reviewers occasionally talk about them whether for good or bad and try to assess their features. They include:
There are a lot more, but these are top picks.
Highly efficient trading bots with a good reputation
While the trading bots listed above are very popular, their reputation is quite shaky. They have some scam indications and some of them have reviews and testimonials that look bought. However, here are some other crypto trading bots with great reputations and amazing characteristics besides a good algorithm:
- BTC Robot
- And many more.
If you’re new to this and looking to make money quickly, there’s still some research you have to do. However, if you’re up for something a bit more long-term and willing to wait before you make a fortune, you can head in now. If this is you, or you’re looking to make a quick buck, try crypto trading bots now.