Trading cryptocurrencies is challenging as there are many variables involved. Even the most experienced traders struggle to make consistently profitable trades due to their human failings.
As a result, automated crypto trading was invented, which involves using trading robots to automate trades. This proved useful as human flaws such as emotion are eliminated in trades, making them more likely to succeed.
So, what are crypto trading robots, how do they work, and who can use them in trades to increase their chances of winning?
What are Crypto Trading Bots?
Crypto trading bots are robots used to automate trades. They are basically programs that are executed to produce specific results in trades.
While you can just go to a cryptobot trading platform and start using trading bots with pre-defined rules, you can also program them to suit your trading needs. For example, you can change the settings of a bot to make it buy a specific cryptocurrency at a specific time or price, depending on your crypto trading strategy.
Crypto bot trading platforms also offer backtesting services that allow you to test such a strategy before implementing it in your trading. This significantly reduces your risk when entering such a trade.
Another important role of crypto trading robots is to eliminate human emotions in trading decisions. No matter how experienced you are, you can get carried away by emotions and make mistakes that can cost you a lot of money in trades. Again, it has to do with trading psychology and how it affects crypto trading.
The robots carry out instructions and cannot be changed because they have no emotions, which can save you from losses. They also require no high-level technical skills to operate, making them a good solution for trading these days.
How do crypto trading bots work?
Crypto trading bots are hosted by platforms such as Coinrule, Cryptohopper, etc. These platforms create crypto trading bots with specific rules that apply to trades, but you can modify them to suit your specific goals.
Perhaps the most impressive thing about them is that they trade 24/7, something no human can do. You can program them to execute trades at specific times, day or night, based on how the market is moving.
Some bots have special features that set them apart, such as the HODL feature on 3Commas. This not only trades but also helps you buy and hold cryptocurrency automatically by buying at low prices. It is up to you to decide the cryptos you want and choose a bot to help you achieve it.
However, you should know that while trading robots are good for automating trades, they can be a disadvantage if the trade does not go according to plan. This is because they cannot change the instructions that have already been given.
Who Can Use Crypto Trading Robots?
As mentioned earlier, crypto trading robots do not require special programming or other skills to use. Therefore, even a complete trading novice can use them for trading.
Of course, advanced traders are also at risk of letting emotions or other issues get in the way of executing trades. To help, they sometimes deploy trading robots, such as when they need to execute a trade at night.
They cannot trade all day and all night, so trading robots can come in handy at such times or when they are busy with other engagements.
In summary, everyone uses crypto trading robots, if not because they are new and with little experience, then because they cannot execute the trade even at the best time.
Can Crypto Trading Bots Help Your Trades?
Crypto trading bots can help you with your trades, especially if you are a beginner. Take the time to read about how each crypto trading bot works on the platform of your choice and remember that a crypto trading bot is not a guarantee that you will make money.
