Amazing Facts on Cryptocurrency Trading Bots
The one thing that all cryptocurrencies have in common is their volatility. They can rise by as much as 20% in a couple of hours and drop by the same value or more over the same period of time. Traders in the cryptocurrency space utilize various skills (like fundamental analysis or technical analysis) to assess the market and make a decision. 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.
Using bots for trading is convenient but it also needs someone who knows what they are doing. Bot trading is letting a computer program handle cryptocurrency trading for you. Bots are basically programmed software that connect to coin exchanges then carrying out trades according to their programming instructions. 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.
Just like any other Internet business, the cryptocurrency is riddled with scammers and faulty bots. Thus, before you pay your hard-earned money you need to find out if the company is legitimate and they will not scam you. You can ask around from online forums on legitimate and good cryptocurrency bot trading companies. Avoid companies that people complain about a lot.
Trading bots are not a new concept in traditional trading markets. 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. Bots appeal to cryptocurrency traders because they have direct market access thus can set up bots to handle all their trades.
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 markets run all the time this means creation of more opportunities that you can take advantage of. 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 never need time to rest thus they can run for 24 hours and take advantage of any opportunities that may come up when you are asleep. Bots do not have human fallibility because they are programs that follow set commands. The popularity of crypto trading bots could be explained based on the facts discussed earlier.