Amazing Facts on Cryptocurrency Trading Bots
All cryptocurrencies have one thing in common- their volatility. Crypto currencies can skyrocket in value within a matter of hours and the nose dive just as quickly. Traders use various tools, like technical analyses as well as fundamental analysis to capitalize on market changes. Most traders use old-school trading techniques to assess the market whereas others that are more tech-savvy prefer the use of bots that do the actual trading for them.
One of the advantages of crypto trading bots is that they make trading easier but the user needs to know what they are doing. In simple terms, cryptocurrency bot trading involves letting a computer program decide all your trading decisions and execute them for you. Bots work by connecting to exchanges and carrying out trades as they have been programmed. The decisions made by bots are based on various factors like volume, price changes and time. Various traders have various trading needs and they can customize the bot to handle trades as per their preferences.
The cryptocurrency bot trading industry is also full of scammers and some faulty cryptocurrency bots. You need to do your due diligence to make sure that the bot you settle on will perform as per your expectations. You can get good information on the bot you want to pay for by asking on online forums for cryptocurrency enthusiasts. If a company has too many negative reviews steer clear from it.
Trading bots have been around longer that cryptocurrencies. The reason, why these bots have been unpopular, is because they lack direct market access (DMA). Traditionally, even though trades are done immediately but the transaction must be fulfilled by a brokerage firm. In the cryptocurrency world traders are granted direct market access thus they can use bots to trade unlike in traditional.
Crypto currency exchanges run for 24 hours a day every day of the year.This can be either an upside or a downside for the trader. Because the market is always open means that you can capitalize on any opportunities that present themselves. The downside is that human beings need to sleep and the market can fall when you are asleep. However, with a trading bot trading can happen even when you are asleep.
Advantages of using a trading bot
Bots can run continuously without fatigue thus they will trade for you even when you go to bed. Bots reduce the risk of human error since they have set instructions that they follow. The facts discussed above prove one thing–that crypto bots are likely to be the norm for any cryptocurrency trader.