Hello crypto lovers, last day i have been speaking for long time with my friend of my crypto team about trading bots on cryptocurrencies.
We really did a kind of brain storming to try to understand if a trading bot can be considered safe and profitable.
What is a trading bot?
Is an automated way of buying and selling crypto just letting a bot decide when to do it on which prices. Usually you connect your account's api to the bot.
There are different kind of bots based on different timeframes ,indicators or market situations. For example some bot is made to work in a bull market, others work better in a bear one. Usually you can limit the losses or profits that your bot can tolerate.
Is it something new?
No. Also inside the stock market the vast majority of trades is made by computers using algorithms.
With margin and leveraged trading lots of trades are made in a very short time. For example with an high leverage even a small change of the price can make a big profit.
Cryptocurrencies are known for their high volatility so they sound perfect for this kind of hft(high frequency trading) made by algorithms.
As you can see even bitcoin(the higher coin for capitalization) in the day of yesterday had such a good volatility for scalpers.
Is it safe? Can you earn money with it?
These are the biggest questions. For sure it could.
We have been speaking with many users who are happy with the results of the bots they are using, but we also know that many people lost lot of money by using them.
From my point of view we have always to consider:
-so many times we know that who knows what to do, simply does it and who doesn't know what to do is teaching or selling methods to others! This means that so many bot sellers are only looking for profits by selling them without really caring of the product. At the same time some very good developer would never sell its bot to anybody.
-some bot could work fine only with a low number of users using it while others would need an high amount of trades to reach the best performance
-even if they try to ensure any kind of rewards you'll never be sure of the results you will get.
-if a bot become too "famous" someone will create a new bot to gain on the old one.
-when somebody makes a gain it means that someone else is losing. Trading is transferring money from a person to another. Easy money doesn't exist.
-Remember always dyor. Do your own researches and always look for information from different places like websites,social networks and youtube .
-Be careful when you read about crazy performances like ensuring 2% gain everyday.
-If you are trying to make huge gains you are at the same time risking to get big losses.
-If you are not used to crypto markets this could be too risky for you.
-I would never connect my main account to a bot able to do whatever he wants.
-If I'll ever think about using a bot I would connect it with a separate account and allocate maximum a 2/5% of my holdings on it.
What about you guys? Have you been using any trading bot? Are you happy with it? Is it making good performances?
Thanks for reading!