Hey folks, so I have to preface this article by saying that I do not consider myself a trader, and I get wide-eyed trying to understand guys like Benjamin Cowen from the Cryptoverse or Dave the Wave on twitter. What I do know however is that crypto trading bots are super popular and lately I’ve been seeing them anywhere. I’m probably going to repeat myself on this, but if you are considering trying a crypto bot, please be sure to do your own research before hand because there’s a lot of scams out there. It’s important to remain skeptical and think that everything might be a possible scam, so once again, just be wary.
My journey into crypto trading bots actually started several months ago, when I was trying some of the trading bots on Kucoin, and from my experience, although it was fun to use, I didn’t see it as that profitable of away to make a significant passive income.
Since then, the crypto-trading bot arena has certainly evolved over the past several months, and there are several products out there that are touting some pretty insane returns. In my search to find something that’s actually profitable, there are a few things that I learned about crypto-trading bots that I hope that everyone considers, especially if you consider yourself to be a non-trader/non-TA expert such as myself.
My Crypto TBAAS Checklist
Be sure whatever bot you’re looking at allows you to retain your own funds: This includes not giving over your private keys or any passwords that might allow someone else to access your cryptocurrencies. I know this sounds like a given, but it might seem rational at the beginning if someone tells you that they need control of your accounts to set the bot up. There are plenty of platforms/services out there that will let you retain 100% control of your assets, so if someone is telling you otherwise, this is probably a scam.
Ask yourself if the returns are realistic: I have seen a lot of bots out there that are touting some pretty crazy returns such as a 7% ROI in one day with compounding interest, or even larger. Can a bot make 7% ROI in one day? Sure. Can they make it everyday for a year? Unlikely. But let’s just look at the math here…if you were to invest $1000 dollars earning about only 1.5% ROI in one day, this would be an astronomical APY:
At this APY rate, this would essentially mean that from that initial 1k, at the end of one year you could make $229,996.90, and at the end of two years you could essentially make $52,898,574.01. Does this sound realistic to you? If not, I’d probably stay away.
On top of ridiculously high ROI, their yield rates are fixed: Just like I’m sure even the best traders out there will say that they don’t have an absolute perfect track records, you can’t be expecting a crypto-trading bot to be perfect either. Therefore, if a platform service is guaranteeing these astronomically high returns every day, I would consider this a red flag too. In fact, I would trust the data more if it actually shows periodic losses.
Every good crypto-trading bot needs maintenance: The market constantly changes, with different things going hot and cold all the time — therefore if someone just offers you one crypto-trading bot and that’s it, don’t expect that bot to maintain it’s performance forever. Bots should be continually fine-tuned and adjusted all the time to weather different market conditions. Now on the other hand, if you’re only looking to try a crypto-trading bot for a short period of time, then it wouldn’t make that much sense to care about maintenance.
Ask yourself if you’re OK using leverage: This is a deal breaker for a lot of folks, and I personally don’t blame them. As the saying goes, it takes money to make money, so if you’re uncomfortable using leverage, then from a relatively small amount of principal, any trader will probably tell you that it’s much more difficult to make significant profits in a short amount of time. Also in the same vein, if you’re uncomfortable with taking that kind of risk, it might make more sense to apply a different strategy apart from crypto-trading bots, such as hodling or DCAing.
What Bots do I use?
There’s a few bots that I’m looking into at the moment (which I’m sure I’ll do posts on in the future), but perhaps the one that I’m most excited about at the moment is one I started recently with the guys at tradingbots.me. These guys fit my checklist to the tee:
I retain completely control over my funds: They don’t have access to any of your funds and you have full access to the bots — they only send you the link that has all the preset parameters to get your bots up and running.
Returns are relatively realistic and no fixed yield rates: They have a lot of statistics and data for returns on their site, here’s an example of some trading history for their $ATOM Long bot, one that I personally use:
Notice entries 151–153? I was actually relieved to see that in their trading history there’s actually some trades that aren’t profitable. It shows me that the bots aren’t perfect and that the guys that are selling it to me aren’t trying to tell me that they are — in fact they told me that they could only advertise what returns their bots have provided in the past — not what they could produce in the future.
What can you expect to make? As you can see from the snapshot above, rates can definitely vary, but from the reviews I’ve read, I think on average they’re getting people around a 0.5% daily return, which is awesome, but not unrealistically awesome.
They offer a maintenance service: No one likes fees in general, but personally I want to run bots a lot longer than one month, and I’d even go as far as to say that I would be skeptical if these guys didn’t charge a maintenance fee:
Also, if I’m hiring anyone/anything as a service, I want to know how they profit just as much as I want to know how I can profit, and if their bots’ future payouts match their past ones — then this makes total sense to me.
Other factors with tradingbots.me:
No auto-compounding: Returns don’t really compound because inherently that’s how the bots are setup — they execute trades based on your initial principal. For instance you might be doing $50 dollar trades if your initial principal is $500, but this might be $100 dollar trades if your initial principal is $1000. I think this relative scale is important to maintain because otherwise if your trades are too large in relation to your principal size, your principal could get wiped out after just one bad trade. The good news is that if you do want to increase your base amount of capital, all you have to do is ask the guys at tradingbots.me for new parameters on new bots. This leads me to my next point…
These guys are on a 10/10 easy factor to work with: Like I mentioned before, I do not consider myself a trader or a technical analysis expert, which was why I was looking into a TBAAS in the first place. The two guys I’ve worked with — @Sweetheater and @ShinyJackal were super patient and seemed to be available near 24/7. Plus, initially after accidentally sending them too much money to get this started (like a complete noob), they won my trust immediately after they refunded me the overpaid amount in seconds.
To be completely transparent, I’ve only been using tradingbots.me’s bots for a couple of days so how great their bots truly are remains to be seen, but I can report so far that I’ve already been averaging about 0.4% a day, which if this extrapolates out to a month, this will hopefully come out to be around a 12% monthly ROI. If you’re curious, be sure to let me know in the comments below and I can do an update later of how I’m doing with these bots.
Conclusion:
We all know crypto is risky, and I think crypto-trading bots just puts another level of risk on top. However given the market’s volatility, there are tons of platforms and services out there that have obviously been able to find the secret sauce(s) to be able to capitalize off the market, whether its up or down. And with that in mind, let me also give a final reminder that none of this is financial advice and this is for educational and entertainment purposes only. Please as always, especially considering how many crypto-bot scams there are out there, do your own research to find what risks you’re willing to take and what investments might be best for you.
Thanks for taking the time to read this and be sure to follow me on twitter (https://twitter.com/CryptosWith) to get all my latest updates. Cheers everyone!
