A trading robot or an auto-trading software uses an API to interact with the exchange account of the trader. These trading bots automatically perform trades and these trades are based on what they interpret by looking at the market data. When the market conditions meet a set of predefined and preprogrammed criteria, the trading bot will start trading. Trading bots will observe market signals like price, volume, orders, and time. The bots will use technical analysis signals such as moving averages with other factors such as social media.
Unlike most of the markets, the crypto trading market never turns off and it is possible to start a trade 24/7. For traders, this means trouble as nobody can keep an eye on the market all the time. Everyone who knows about Bitcoin knows how volatile Bitcoin’s market is. Traders and investors who are participants in the crypto market can wake up to a huge fall in price due to the volatility that comes with cryptocurrency. They could also miss good opportunities to buy and sell if they are not trading 24/7. Crypto trading bots have gained a lot of attention from traders as they know that with the help of a trading bot, these situations can be avoided. For instance, Bitcoin Trader is gaining a lot of traction because of the help that it is offering to the traders. We will now look at some of the advantages of crypto trading bot platforms and why these bot platforms are getting so popular in today’s world.
Take the emotion out of trading and generate income
Day trading is one of the most, if not the most, stressful method of trading when it comes to cryptocurrencies. The crypto market’s volatility adds to this stress and only means more trouble. Trading Bitcoins or cryptocurrencies may prove to be a rollercoaster of emotions with the help of highs and lows. Humans can get emotional and may fall prey to many biases that influence decision making. This may lead to very costly mistakes when it comes to the high-stakes crypto trading world. However, crypto bot trading strategy, which is rules-based, should help traders to avoid finding themselves in such helpless situations.
READ ALSO: Is Bitcoins, Booming In Nigeria?
Crypto assets, unlike stocks, do not pay dividends. If we look at it from an investor’s perspective, crypto assets are more like a commodity. However, when the crypto market turns into a bear market there is no reason to keep holding on to a commodity. Commodities should be let go if they don’t deliver a return aside from an increase in value, which is not likely in a bear market. Cryptocurrency trading bots can help crypto holders by providing them with a passive income. This can be done by the trading bot through leveraging crypto assets by trades.
However, this would not be a safe or a reliable income stream but it is still an option for the crypto investors who can hold onto their assets for a long period of time. A reliable long term passive income can only be generated by using a trading bot if someone can create an automated trading strategy that performs very well, consistently over a good period of time. Some of the trading bots will come with a pre-set trading strategy. If you are new in the crypto trading business, you can also copy the trading strategies of professional traders that are tested and tried.
Save time and find new opportunities.
Efficiency and self-sufficiency are two very important advantages that crypto bots provide. Automated trading means that you won’t have to keep an eye on the market at all times. Even the most active traders of cryptocurrency will sometimes be unable to dedicate all their day to the market. Automated trading strategies give us a solution to generate profits through trading without sitting in front of a screen all day long.
A trading bot will always be online and can examine and observe the markets for a good opportunity to make a profit. The volatility of the crypto market means that the market can go through huge changes in very short periods of time. However, trading bots are always ready to make full use of a change in market conditions. Depending on the parameters have already been set, once the bot sees an opportunity, it will act on it.