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Quite opposite to stock markets, the cryptocurrency markets never sleep, which can be a highly stressful scenario for traders and for investors as well. Those familiar with crypto trading will know the feeling of waking up in the morning to a joyful or an unpleasant surprise when they check their portfolio and see large losses or gains.
As a result of this volatility and uncertainty in crypto trading markets, crypto trading bots are becoming increasingly popular among the traders. The bots allow them to remain in control of their trading all the times, with the bot never sleeping even when the human does. In addition to this, correctly specified bots allow trades to be executed more efficiently and quickly than the humans themself would be able to do manually.
The bots are available both free from the open-source platforms and licensed to the users in exchange for a certain fee.
What is bitcoin trading bot?
In typical scenarios, a bot will analyze the market actions such as volume, order, price, and time. However, it can generally be programmed based on your preferences.
How trading bots are better?
While it’s obvious that bots automate the process and can perform functions better than humans could do manually, here are some other benefits of using bitcoin trading bots:
Some may argue but a most distinctive feature that makes bots or machines different from a human is emotionlessness and unbiasedness.
Bots can analyze data without emotions and bias. They understand the implications for a wider range of events and typically won’t get wed to their positions.
Bots are able to process and analyse a large amount of data in realtime. This means they will be keeping eye on important announcements on the desired stocks. It also makes them suitable for making decisions by analysing different companies.
As discussed earlier, cryptocurrencies fluctuate in seconds and bots can be up and running 24/7. On the contrary, humans need to eat, sleep and live.
Humans can typically work 40 hours a week, while bots can work 168 hours producing 4.2x faster efficiency.
As bots are able to scale and run at speed, they can also work on different time frames and with different strategies at the same time and without correlating both of these strategies, which reduces the risk.
What did I learn from a little bitcoin trading?
While I am fond of cryptocurrency trading but gathering the courage to invest in bitcoin isn’t easy. What I did was I started to look for what people in the market and the customers have to say. Obviously, there were some fake reviews but dug deeper.
Along my path, I learned a lot about crypto trading. For instance, choosing trading platforms with low transaction fees. Overall, the journey was beautiful as I got to learn a lot. I lost and earned but learned.
Trading bots can assist traders in ensuring that they are always interacting with the market, even when they are physically unable to do so. They can assist in removing some of the stress and emotions that are often found in any financial trading markets, not least the cryptocurrency market.
However, trading bots do not always work best. They should surely not be opted by beginners in the trading unless they are willing to pay a premium fee for the best bots in the market.
I consider that anyone willing to trade crypto or any other asset must first understand the market before experimenting with bots.
In addition, if you are not a competent programmer or familiar with the creation of financial strategies, trading bots may also not be for you. However, if you have the requisite knowledge and ability to overcome these obstacles then a trading bot can be a worthwhile tool in monitoring and making gains from the Bitcoin market, while you eat, rest, and sleep.