The cryptocurrency market never closes and therefore it is impossible to always keep an eye out for large price fluctuations. Quite a few people have seen their profits fizzle out (or multiply by 100) if not in front of their familiar exchange. Because of this, cryptocurrency trading bots are an increasingly common reality.
Bots can be very useful tools when trading cryptocurrencies and help avoid unforeseen events when prices fluctuate a lot.
First you have to explain what What is a trading bot?. A trading bot is nothing more than a program that is dedicated to the automatic operation of our cryptocurrencies based on predetermined parameters. That is, a bot can be programmed to sell a certain percentage of our portfolio of e.g. Bitcoin if the price falls by more than 5% and to buy again if it falls by another 10%.
There are several ways to get a bot with these properties. The first and best is to do it yourself. That way, you can be sure that the bot is not doing strange things, you don’t have to pay anyone a commission, and you are in full control of it. Unfortunately, programming a bot requires skills that not everyone has.
But don’t panic. There are several online tools that you can buy a bot and even configure one. These can be connected to most exchanges via the API. We already tell you how to use Coinrule, a fully programmable bot with a free version. Most of these sites charge fees for the use of their bots or at least block advanced functions behind a paywall.
But are they advisable? First of all, you need to consider the benefits of having a bot. They are practically instantaneous (or at least much faster than a human), they can perform many operations at the same time, they never rest and, for practical reasons they can be everywhere at the same time. This can be seen in the so-called arbitrage bots, which examine a large number of exchanges for price differences (since a crypto currency does not have exactly the same value on different sides) in order to exploit them.
Being able to step away from the computer and know that a bot will automatically sell or buy when there is a catastrophic market move can offer a lot of security, but it is better to remember that they are not infallible . A bot has no intelligence, so it just executes the command without consideration. This means that in the face of unforeseen situations (of which there are many in the world of cryptocurrencies) they may not be the best tool.
Its uses are generally limited and if you are looking for great complexity (a large number of parameters) you will have to pay for it. They can also be dangerous. If someone is offering their own bot of goodwill on a forum, the most sensible thing to do is to be suspicious as it is more of a scam than possible.
The use of bots is a perfect complement to personal trading to hedge unexpected movements outside the computer and to take advantage of lateral market movements. However, in no case is it advisable to delegate all cryptocurrency activities to a bot, and sometimes it is not profitable to pay for it when the same effect can be achieved by planning buy and sell orders in advance.