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Trading with cryptocurrency is a hot topic if you are new in the world of digital currency and also for old crypto enthusiasts. It is always great to construct your digital currencies by using the high fluctuations of the cryptocurrency markets. There were many traders who used to trade cryptocurrencies manually. But with time things have evolved. Now there is a new trend in the crypto market known as cryptocurrency trading bots.
What Are Cryptocurrency Trading Bots?
A cryptocurrency trading bot is a software that is used to evaluate the trading data of the assets and then carry out buying and selling on behalf of a trader. This software acts on the basis of pre-defined and pre-programmed rules. On the pricing graph of the market, the decisions that are made on trading bots depend. So trading bots in the digital currency market has advanced just like the bots in the stock market.
Features Of Bots Aiding in Crypto Trading
The trading bot can be said to be a technological development in the cryptocurrency arena. These trading bots can be customized by the crypto traders and can also instruct them to act on some specified crypto bot trading strategies and rules. They have varied features. Here are some.
- Advance candle patterns and technical indicators.
- Trailing Stop-Buy
- Trailing Stop-Loss
- Back Testing
- Trailing Stop-Short
- Copy signals from advance traders
- 24/7 Trading
- Performance Reports
- Built-in Advanced Strategies
- Copying Top Traders
- They have built-in Market places where you can buy result-oriented strategies and signals.
The huge competition among the trading bots has brought in such diversity in their working and many new bots are designed with all the latest trading techniques. One of the best free crypto trading bots is Pionex.
Are Cryptocurrency Trading Bots Legal?
The idea of trading bots are used in the traditional stock market for a long time and is accepted internationally. So why should digital currencies remain behind? For the last few months, the use of cryptocurrency trading bots has increased to a great extent.
In the traditional stock market, indices, forex, Assets, commodities, etc., more sophisticated restrictions and rules are stuck regarding the guidelines of trading and the use of cryptocurrency trading bots.
As in the traditional markets, traders are strictly prohibited to apply techniques like the pump, wash trading, and dumps, Carry Arbitration, Arbitration, etc. However, in the digital currency world, there are not as many drawbacks as the markets of cryptocurrency are not yet fully legalized. In cryptocurrency trading, traders can easily use trading bots with their chosen exchanges. Using API keys these bots can be attached to the digital currency exchanges. According to the requirement and budget, the users can use various cryptocurrency trading bots. Coinrule is the best crypto bots 2021.
According to cryptocurrency trading bots Reddit, the companies that provide the best crypto trading bots are:
- Cryptohopper
- 3 commas
- Tradesanta
Are Trading Bots Profitable?
The crypto trading bot returns are quite good if there is an uptrend in the market. The crypto market is very fluctuating as the trading bots need to be customized in a way that can protect the traders from losses when there is a sharp down trend in the market.
During the uptrends, it is easy to set up the trading bots and there is no need to put a stop loss. But if the market moves in the opposite direction then the trading bot would be helpless if there is no pre-set stop loss placed.
Advanced crypto users can guide the bots on trading by using their successful trading techniques to earn profit.
New traders on the other hand should not worry as these new trading bots come with numerous trading methods that are already built in. The new users will just have to connect their exchanges with the automated trading bots by API keys.
Why Do We Need To Use Bots For Trading?
Trading bots are capable of analyzing the condition of various cryptocurrencies in the market. The main function of trading bots is that they operate on the basis of pre-set strategies. Some benefits of using cryptocurrency trading bots are mentioned below:
- Higher Efficiency: Trading Bots can evaluate the market conditions of various cryptocurrencies. But human beings can only evaluate one cryptocurrency at one time. Trading bots can open and close various trades at one time if there is a good profit margin. On the other hand, a cryptocurrency trader opens and closes positions manually which takes a lot of effort and time.
- No Emotions: The cryptocurrency prices are very fluctuating and are usually operated due to a lack of rules. So when the price of cryptocurrencies shifts upward sharply, traders jump so that they do not miss any profits. The same scenario happens when prices fall sharply and trades try to get out of traders with the anxiety to avoid losses. But Trading Bots are not the same. They do not have human emotions and they are not connected directly in the losses or profits results. Market manipulation and huge fluctuations in price do not affect their functioning. They simply trade on real-time market information and work out their commands according to the pre-set programmed rules.
- Increased Speed: People usually require a huge amount of time to make trades. Our decision making is often not fast and we think about whether we should put our money on this trade or not, what should be the stop loss, and many more. But, such delays can harm us in the fluctuating cryptocurrency market, as a nice trade can drop in value if you take too long to work that out. Trading Bots, on the other hand, work out orders immediately. They can solve various good trades in less than a few seconds and enact actions instantly without delays.
Conclusion
If you have some idea about trading and want to expand your earning through trading, then cryptocurrency trading bots are the best option for you. Initially, you need to conduct good research to find out the best crypto trading bot for yourself. You can also opt for open source crypto trading bots as well. After the market research, find the best for you and start trading.
Frequently Asked Questions
1. Do crypto trading bots work?
Trading cryptocurrency by using a crypto trading bot is always thought to be more efficient. As long as the bot continues to get authentic data and is working on some algorithms, it can trade assets with a much better chance of profit. An added pro is that these bots can work 24*7.
2. Are crypto trading bots profitable?
The crypto trading bot returns are quite good if there is an uptrend in the market. The crypto market is very fluctuating as the trading bots need to be customized in a way that can protect the traders from losses when there is a sharp down trend in the market.
3. What is the best trading bot for Cryptocurrency?
The best cryptocurrency trading bot would be Pionex, Reality, Cryptohopper, etc.
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