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Crypto Traders Bot Are Changing the Market

Crypto traders currency Bots

September 28, 2020 | 

JOHN K MWANIKI |  0 Comments| 

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Get Into Cryptocurrency Trading Today

Trading crypto is a demanding venture. The market is ever active as it never sleeps. It is also quite volatile, making it require attention at all times. Given that it is a new commodity, the traders find it hard to manage. Most prospective traders decide to let it go altogether. 

The trading, however, seems headed for the better. Automation is rife in the financial industry. Almost 80% of stock trades involve automation. Crypto trading is headed the same way. Crypto traders have been adopting trading bots in masses. 

Here is all you need to understand the crypto trading bots' impact on the market;

What are crypto Trading bots?

A trading bot is a program that analyses the market conditions and place trades. The trading software uses API to understand the market then place trades using predefined algorithms. They ensure automated and high-frequency transactions on behalf of the trader.  It eliminates the need for brokers

Trading bots use market conditions like price, time, volume, and orders. It also involves technical analysis programs like moving averages and the support and resistance levels. 

Analyzing the crypto markets takes time. It also requires experience. Traders, however, don't have to worry when they have the trading bots. The bot analyzes the trading platform faster and accurately. One only needs a trading strategy to implement the bots. 

The bots have been so useful. Most of the high-end traders are already opting for them.

The other concern is the legality of trading bots on the market. The trading bots are welcome to the market. They help in boosting the selling and buying rates. Increase brokerage activity is great for the industry. Moreover, the bots have been useful in the traditional stocks market. Anything legal in the stocks is equally so in the crypto markets.

Types of Crypto Trading Bots

There are several types of trading bots with various trading strategies. Some of the main types of bots include;

  • Trends – they observe the market movements. They work based on the profitability at any trade. It tends to go long during an upward trend. It then takes a short position for the downward trend. 

  • Arbitrage – the different exchanges come with varying rates. They have varying regulations and operational premises, causing differences. Noticing these differences is becoming harder as online trading becomes more computerized. The arbitrage trading bots, however, can detect them faster. Arbitrage crypto traders use these bots for trading. 

  • Scalping – Scalping is the opposite of the arbitrage bots. It looks into the sideways movements of the market. Its main objective is that the trader buys low and sells high. The scalping trading bots tend to take advantage of the asset spreads. It is all about profitable returns from the price fluctuations. It analyzes the bullish and bearish run. 

  • Portfolio automation – it is the most useful for traders looking to create a portfolio, not active trading. It helps in automating the repetitive market tasks in high-frequency trading. It keeps different assets depending on market performance. It does away with underperforming and includes the performing ones. 

Reasons to Use the Crypto Trading Bots 

The use of crypto trading bots is on the rise. Yet, not every trader understands the need for the tools. Here are the reasons to consider the bots; 

Time-saving

Crypto trading is time-intensive. You have to monitor the different market trends for the right moves. You also need more than just the market. 
The other external news and factors also affect Bitcoin prices. A trading bot, however, factors all these fast enough. 

Eliminating emotions when trading 

Emotions are part of trading for most traders. They only depend on the possibility of loss or gain when trading. Such rush trades are likely to lead to losses. Trading bots rely on data and technical analysis before executing trades. 

24/7 Market Activity 

The crypto market never sleeps. Neither does it have weekends and holidays off. No trader can stay up at all times. Yet you still want to take advantage of favorable market movements. The trading bots observes the market at all times. It can execute traders even when you are asleep. 

Simplifying the market 

The crypto market is complicated. It takes time to become a pro trader. It's also growing such that you won't master anything. The trading bot makes it easy to execute trades. It analyzes any trading provision and provides solutions. You can also set them to match any market condition. 

How to Choose Crypto Trading Bots 

Now that you understand the different trading bots, you realize you can't use them all.  Choosing the right bot requires several considerations. The first consideration is your trading pattern. As there are different bots, there are different patterns. For example, scalpers are better off with scalping bots. 

The credibility of the bot is also essential. The crypto world is awash with scams. Whether it is the wallets, exchanges, or bots, fraud is a possibility. Verify the developers of the trading bot before implementing it. Look into the experience and qualifications of the developing team. You also look into their funds' source and plans for the bot. Only work with a bot developed by a transparent team. 

Ideal automated trading systems come with the necessary customer support. The developing company should have an active user community. It should also provide timely updates and assist in case of any concern. 

You also have to consider the cost of the bot. Still, don't rush to cut on cost when compromising on quality. Don't hesitate to spend when the bot comes with the results. It should come with ease of use and adaptability to your working environment. 

Bottom Line 

Automation of the crypto market is the way to go. The active market requires full-time attention that no human can achieve. It also requires accuracy and speed. The trading bots have been the lifesavers so far. 

The different trading bots mean one can trade on their needed strategy. Traders still, however, must look out for scams. They have to ensure transparency and do due diligence for any bot. 

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