I often get asked a lot of questions following my top 5 list of the best cryptocurrency trading bots.
In particular, I am asked whether it is useful, obligatory or practical to use a trading bot. So, I decided to write this article to talk about the advantages of using a trading bot when looking to trade.
Similarly, it's important to know that there's a slight difference between Forex trading (traditional trading) and cryptocurrency trading. Even though the underlying mechanisms are the same, the markets themselves are slightly different. How so? Well, it's primarily in terms of volatility that these two types of markets differ significantly.
This high volatility implies a different way of trading. You then have to be much faster, faster and more agile to trade cryptocurrencies. This is why we generally use trading bots when it comes to cryptocurrencies. I would add that even in classic trading, high-frequency trading via robots is also widely used.
Let's take a closer look at this and see the 5 reasons that will definitely make you opt for a trading bot.
1. Bots are proven
In 2014, 75% of all trades on the New York Stock Exchange were conducted by automated trading systems (ATS). Why? Because since their introduction, they have proven to be much more efficient than manual trading. Furthermore, the early adopters of ATS were the real winners, as they were competing with a market controlled by humans. Of course, manual trading will always be less efficient than that of robots for the simple reason that the bot has no emotional issues, it has no fatigue issues and it remains “programmed” to perform as many actions as necessary.
2. Bots surpass human capabilities
Let me put it this way, but you get the idea I think. Humans have a lot of needs and get tired quickly.
A good trader is a trader who follows stock prices precisely. He also follows and interprets major political and economic events as accurately as he can. This requires incredible rigor. However, human beings must also rest and it is often during these hours of rest that they "miss" events or arrive too late to make a decision. Robots, on the other hand... well, they don't sleep. Day and night, they analyze the markets. This is also why they are much more efficient than humans when it comes to trading.
3. Bots don't have to deal with emotions
Sure, you might be good at writing a love poem or a punchline on Youtube, but when it comes to trading, you're asked to suppress your emotions. For this, robots are simply better because they are 100% rational. The word rational is very important in trading. This is what will actually allow you to make a profit. For example, has something like this happened to you? Did you panic when you saw the curve drop? You then decide to sell in a hurry and a few minutes later, you see the curve going back up??
Why did you stop the order? Because you panicked emotionally. You believed (and I mean believed) that it was going to keep falling, right? You didn't set a substantial stop loss and therefore thought you were going to lose everything? In short, if this has ever happened to you, it simply means you really traded. It's such a basic situation, as you know. And this reaction is perfectly human.
I'm not talking about FOMO etc. What I want to show here is that emotions can prevent you from trading well. Which is not the case with a bot.
4. They are an extension of your manual trading
Yes, it is also very important to mention this. Most people who discover the existence of trading bots think that it is an absolutely objective bot, which has been programmed ex nihilo to do trading.
But that's not how it works. In fact, you are the one who configures your trading bot. You enter the settings. The goal of a trading bot is to simply delegate the work to software.
It is therefore your extension to trade automatically. Your bot won't work until you configure it.
It's up to you to adjust and refine his decisions so that he can trade exactly like YOU would if you had the time and energy to trade in front of your computer all day.
The active bot therefore reflects you and your trading style. Of course, you can also opt for a pre-programmed bot. This is also why many trading bot platforms like 3Commas or Cryptohopper are so successful. You can indeed choose bots that have already been configured (by other expert traders) and select them based on their performance. This is very convenient.
5. They are easy to use
Okay, okay, they are great at trading – even better than humans, but that also means they have to be complicated… That is simply WRONG. If you have ever tried trading on your own, you will see that there is a “gap” between manual trading and trading with bots.
You don't need a PhD in mathematics to control a trading bot. These bots are designed to be easy to install and start. In fact, trading bot platforms often have tutorials and explanatory videos. For example, I made a short tutorial on how to use Cryptohopper , if you're interested.
I hope this has answered your questions regarding trading bots. If you have any other questions about this, don't hesitate!
Note: No financial advice is given in this article or any other article on ZoneBitcoin . This information is entirely your own judgment. Be responsible for your investments and only invest an amount you are prepared to lose.
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