Ultimate Guide to the Best Bitcoin Trading Bots
Ultimate Guide to the Best Bitcoin Trading Bots
crypto trading bot
Cryptocurrency trading is gaining more and more popularity and is becoming one of the most popular types of investments. However, trading is a very complex process that requires a lot of attention and time.
In contrast to traditional stock markets, crypto trading never stops, making it nearly impossible for traders to track market fluctuations, reduce risk, eliminate errors, and profit from the trading process 24 hours a day. Therefore, many traders use crypto trading bot indicators to make trades faster and more efficient.
In this guide, we will be considering the meaning of bitcoin trading bots and how traders can use them in the crypto market.
What is a bitcoin trading bot?
Bitcoin trading bot is a software program that automatically buys and sells various cryptos at the right time to generate a profit. It enters trades based on pre-established parameters.
Due to the crypto trading bots, traders will not miss the opportunity to enter profitable trades by running a set of algorithms and will be able to open orders in time.
How does the crypto trading bot work?
Bitcoin trading bots by https://cryptorobotics.co/crypto-trading-bots-the-ultimate-beginners-guide/ work under special algorithms, and trading strategies, which, in turn, are based on technical analysis. To make an independent analysis, traders need historical data on price changes (charts, at least for the last year). Sometimes it is possible to determine an association with the news.
Besides, after conducting a technical analysis, the strategy is tested on the same historical data, and the number of potential losses and profits is calculated. And if the results are satisfactory, the rules of the trading strategy of the cryptocurrency trading bot are created on their basis. Some bots additionally utilize indicators that provide you with the opportunity to analyze the current situation on the market, others are executed only when certain market conditions occur.
The trading strategy of crypto trading bots can be very simple, for example:
When there is a fall in price, the bot buys the digital coins.
When the price rises, the bot sells cryptocurrency.
In addition, the bot can use more complex trading strategies. The algorithm can consider the last historical data, and indicators, and navigate by signals. High-quality crypto bots analyze over a hundred parameters while placing orders. In some programs, the algorithm does not change, but there are bots that can be connected or customized with additional settings. This option suits experienced traders who have their own trading strategies and preferences.
Crypto bot can implement the following actions:
Evaluate the market situation, monitor the course for a given period of time, and predict possible profitable trades. It can provide traders with signals during manual trading.
Place sell or buy orders.
Report back on profit or loss.
How to get cryptocurrency bots?
There are three options for obtaining bots for crypto trading coins:
Creating a bot from scratch.
This option is suitable for those who are familiar with programming. All bots are created exclusively for some exchange. This is a set of information about the state of trading and a set of functions that allows you to start trading according to user-defined parameters.
Buying a crypto trading bot.
This option is suitable for users who do not know how to program. Today, quite a lot of companies are engaged in writing this kind of software. Moreover, not only the purchase is offered, but also the temporary rental of the bot.
Downloading the bitcoin trading bot for free.
The third option is to download bots for free. The advantages of this option are no need to invent anything, write programs or pay money. But the disadvantage is that the user cannot be sure that the bot will not start, for example, transferring all earnings to internal accounts of third parties.
The main advantages of cryptocurrency trading bots
Decision-making speed. Even experienced traders need some time to analyze the market. Beginners do everything even more slowly. As a result, a trading opportunity may be missed. In order to avoid such situations, many traders prefer to use bots. They analyze everything much faster and make decisions faster than a human.
Ability to analyze an unlimited number of pairs. If we compare a bot with a human in this parameter, the advantage is again on the side of the first. Sometimes, a person is simply not able to analyze a large number of assets and make the right decision. Therefore, many traders leave this work to bots.
Absence of errors in the algorithm. A person can make mistakes in the process of market analysis. This is due not only to the level of training but also to the psychological state of the trader. Bots work clearly within the framework of the algorithm. If there is a signal, the bitcoin trading bot will use it.
Trading 24/7. Every person needs rest. Many people cannot devote more than two hours a day to trading. The bot trades around the clock.
User’s free time. The use of bots involves giving a person more free time. After all, he does not need to analyze anything. And many algorithms are set up to fully automate trading from the moment a signal appears to the moment a decision is made.
Lack of emotion. A person is subject to various psychological states, which can affect the results of trading. The crypto trading bot does not experience any emotions. He has no passion. It operates only within the framework of its algorithm.
Discipline. Many traders do not know how to properly manage capital. The bot for the cryptocurrency market will operate according to the algorithm pre-installed in it. For example, if the limit amount of the deal of $10 is set, the bot will never change it on its own.