There is no shortage of cryptocurrency trading robots on the market now, and this is no accident. People are looking for instant gratification and quick results, and automation has taken over many spheres, including cryptocurrency trading.
To learn more, we asked the investment experts at Invezz. A representative told us:
“Some bot cryptocurrencies use artificial intelligence (AI) to automate cryptocurrency trading, others allow advanced users to create a set of rules for how the bot works. This is normal in the banking world, for example, most large banks hire development teams to code these types of automated trading bots and use a process called “back testing” to test their systems, which gives them an edge over retail markets. Ultimately, these are computer programs that allow traders to increase their opportunities with less time and effort to monitor their portfolios.
This is the reason why, according to messages, bitcoin bots are getting more and more Google searches. Some robots are designed for experienced traders who want to make more money, while others are designed to help newbies learn the rules of the game.
Cryptocurrency traders are usually looking for robots that require minimal input and want to use robots to trade any cryptocurrency and digital assets in general.
How do you use a bitcoin bot?
Bitcoin is developed using programming languages such as Python, Java or C, usually Python. They use application programming interfaces (APIs) to perform transactions and interact with various cryptocurrency exchanges.
Cryptocurrency trading robots process trading data, generate trading signals, assess risk and execute trades on your behalf. This applies to buy or sell transactions and is repeated with every interaction between the exchange and the crypto trading robot.
Today, transactions by institutional investors exceed the volume of transactions by retail investors. This is the reason why trading robots are becoming more and more common. More and more private investors are using at least one robot to increase their chances of profit.
There are many bots available and even free, but they are not without risk. An efficient bot should execute transactions quickly and have virtually no code errors. Developers use risk diversification strategies to determine the consistency of profits, as even a small error can damage trading profits. The trader himself has to run various trading robots and choose only those that have a reliable history of generating profits.
A major industry risk is misleading advertising. Bots can often be used with great results; but don’t be a newbie, you need experience. Too many bots advertise that beginners can get rich quick, and that’s simply not true. Like everything in life, it takes education and hard work.
Legality and security
Following on from the above, crypto trading bots are perfectly legal, but good ones are hard to find. There are many miscoded and even outright fakes on the market that anonymous developers sell to gullible investors.
This is why not all crypto trading robots are safe to use just because they are legal. This is especially true for traders who are used to trading in large volumes in the hope of making large profits from marginal price movements of the underlying asset.
The risk of high loss is also high if a sound trading strategy is not used. A high transaction execution speed is not enough to ensure the desired results. Backtesting is an essential element of any successful trading system. This involves replicating results based on statistical data to measure the potential success of a strategy.
Stay safe with approved platforms
Investment guidance programs like Invezz are staffed by teams of financial experts with extensive market experience. Invezz has dozens of employees and contributors who publish content in multiple languages, read by millions of people around the world.
Since the inception of the platform, the Invezz team has worked to demystify investing and help ordinary people trade successfully. Before you start using the trading robot, read some informative news and guides to enrich your experience. Invezz is one of the UK’s most trusted financial comparison brands, constantly striving to deliver new content and tools to help readers make the best investment decisions.