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People are imperfect. They are driven by emotions, get tired, and when they do, they usually can’t think straight. Robots are not human. They never get tired, they are not driven by fear or greed, and they are programmed to find optimal solutions to tasks at hand no matter what. So, what would you choose when facing a challenge that requires cold calculation and that does not suffer mistakes (such as trading, for instance)? You’d probably go for a bot.
If you want to explore the crypto world to win some currency, then using an out-of-the-box bot might be a good idea, but one size does not fit all. Thus, building a crypto trading bot for your personal needs is a better idea. But, let’s discuss such bots, their advantages, and disadvantages in more detail.
What Is a Crypto Trading Bot Exactly?
The cryptocurrency market is extremely volatile, and there is no way for a live human being to keep a steady eye on it twenty-four seven. You might want to go and brew a cup of coffee, and when you return to your desk, you realize with horror that you’ve just missed a lucrative opportunity. As you might have already figured out, crypto trading bots don’t need coffee, or sleep, or anything else. They are always on their guard.
Technically speaking, to eliminate human error in trading, crypto traders use special software programs that trade on their behalf. They give them a series of instructions and rule criteria to pursue. A completely automated bot scans the cryptocurrency market using technical analysis, which involves math indicators on earlier price action data. It analyzes buying opportunities, predicts future trends, and sells when you are more likely to make a profit.
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How to Use a Crypto Trading Bot?
In order to make use of the program, you must connect it to a crypto exchange account at a given exchange platform such as Binance, Crypto, Coinbase, Gemini, or Uphold. Basically, you are safe to use any from this Forbes list.
Furthermore, you connect it with the help of an application programming interface or an API for short. It provides you with the ability to execute trading operations on the chosen platform automatically and around the clock. You can also configure all the parameters of your software solution so that you are the only person who can interact with the crypto bot to eliminate any scamming.
What Are the Best Crypto Trading Bots?
There are a few popular bots you can use that are available on the market today. Some of them provide free packages so that people can acquaint themselves with the product. However, you have to pay to use the solution and use its full functionality. Hence, the five most widely-used are listed below.
Shrimpy is a social cryptocurrency portfolio management platform that puts a focus only on long-term strategies. Thus, the Shrimpy bot is one of the best solutions for those who are just starting out on crypto trading and want to understand how things work in general.
This is a crypto bot that is suitable for those who already know what they are doing. TradeSanta allows trading on multiple exchange platforms simultaneously twenty-four hours a day.
This is another example of a popular trading bot. Cryptohopper helps you automate all your cryptocurrency trading initiatives.
Gunbot is a famous crypto trading software that will help you execute multiple trading strategies. It is fast, secure, and operates 24/7.
3Commas was created in 2017 and it already has the largest number of users totaling 100,000 people worldwide. Its users can trade on 23 exchange platforms in an easy, fast, and transparent manner.
What Are the Main Pros and Cons of Crypto Trading Bots?
As with everything in our lives, these software programs have their benefits and drawbacks. Let’s consider the advantages first that you are already familiar with.
It Works 24/7
This automated software never sleeps or needs rest. Therefore, you will never lose a lucrative opportunity on an exchange platform.
Involves No Human Factor
A trading bot is always level-headed if we can say so. Unlike us, humans, these robots are never sick, tired, in a bad mood, or have a headache. These and other things are hurdles for traders of all sorts, while the software does not care about such things. It just executes what it has been programmed to do.
The more exchanges you trade on, the more chances you’ll have to find multiple profitable opportunities. Crypto bots allow you to trade on multiple platforms simultaneously.
Now, let’s get to the downsides of using such programs and what you need to look out for.
You Still Need to Know How Things Work
Although bots sound like a miracle, they are not. You still need to understand how things operate and tweak your trading strategy all the time.
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Some Bots Are Not that Good
This is true. Even though you want to use one of the ready-to-use solutions, you might find that it is simply not that good for you and you’ve already paid money for it. The good news is that many companies provide a bot on monthly subscriptions and you can always cancel yours.
Be aware of what kind of bot you use. Some of them might be poorly programmed and will have many dangerous breaches that malicious people might use to their advantage.
If you decide to create your own crypto trading bot, make sure that you use services provided by a reputable software development company with extensive expertise in creating solutions for the crypto world. Otherwise, they might not have enough experience to build what you need, or, they might turn out to be scammers.
All in all, if you are into trading, you are more likely to take risks. So, why don’t you try a bot that will help you reduce risks and yield some handsome profit?
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