How do cryptobots work?
Each bot is a set of indicators and parameters that automatically conduct a transaction on the exchange (or semi-automatically: with the confirmation of the operator) when a buy or sell signal is determined. Most of the time, the bot is tuned to a specific market and time period, so that the results are more predictable.
This is not magic, which makes only successful transactions and brings in 146%. The average yield of 1-2% per day, given the volatility and the strong impact of news on
The project aims to build a trading platform and is supported, among others by billionaire VC fund Tim Draper.
Bots come in different types:
Trading bots – are traded based on indicators selected by the user. These bots are highly customizable, you can use a combination of indicators to create your trading signals.
Arbitrage bots – Are used to profit from price differences between different exchanges.
Option 1: it is bought on one exchange, transferred to another and sold there – this threatens with low income (or loss), since transactions go on for a long time and the difference may already disappear.
Option 2: there is dollars on one exchange and cryptocurrency on another. We buy coins at a low- exchange, we sell the same quantity at a high-exchange at the same moment. Then the reverse operation is performed (also in plus or minus, but less than the profit from the previous transaction) – the difference from the rate in your pocket.
Example: Exchange1 – ETH here costs $ 1000, we start this amount. Exchange2 – we have 1 ETH, but it costs here $ 1,200. We buy on the exchange1 ETH for 1000, we sell ETH on the exchange2 for 1200. We wait for the mirror situation and make a deal again – as a result, the balances will be as follows: exchange1 – $ 1200, exchange2 – 1 ETH and $ 200 (ideally, excluding commissions).
Order bots are custom bots that are executed when certain market conditions unfold. They can be combined together to binance trading signals and other automate trading strategies.
I also highlight some “scripts” separately.
How much can you get rich with bots?
If there was an easy way to get rich from bots and altcoins, wouldn’t all the money in the world have already been earned?
Firstly, many bots require investments: a one-time purchase of a program, a monthly subscription, return of funds to a turnover at interest or a bot that is actually written for the cost of your time.
Secondly, trading bots will rarely make stunningly successful transactions. As practice shows, a trader can make big profits on his own. But bots are not bad as background trading, as some money will still bring in.
Depending on the time frame and what your bot is selling, you can either get successful and make a profit, or lose money. This is a free market, not a bank. When working with markets, there are a large number of unknowns; any number of factors can trigger growth or decline. Most bots will be a better strategy for accumulating funds than the buy and hold method, and as long as there is a reason to think that the selected altcoin will grow, you are likely to make a profit.
Sometimes a bot is used to reduce losses, and not just for profit.
If the bot does not meet expectations, you can always choose another cryptobot or suspend its work and trade manually, and then turn on the bot again.
Why use a trading bot at all?
There are many reasons why you would use a bot.
- You may be an inexperienced trader and are looking for a way to get into trading, but then you need to analyze the behavior of the bot in order to develop in the trade too;
- Maybe you want someone to manage an account on the exchange while you are absent or sleeping: this is how money will make money without you;
- maybe you are not ready for stress when you look at monitors all day, the bot gives rational and pre-established patterns of behavior, making trading unemotional;
- you can trade on several exchanges in several pairs at once, which cannot be done by one person, in addition, the bot puts orders and find signals faster,
- The bot also allows you to hedge part of the portfolio.
Cryptocurrency Trading Bots: Benefits
Do bots make a profit? Why are there so few of them? Should I put them? These questions arise for many people who are familiar with the concept of cryptobots.
Like any phenomenon that has received a relative distribution, bots have their own advantages and disadvantages.
The advantages, in fact, are not so few:
- Time: Trading takes a lot of time from the trader, on peak days he can work for 10-15 hours. Robots completely or partially eliminate this. Moreover, they are able to work without interruptions 24 hours a day.
- Coverage: Cryptocurrencies – hundreds; There are at least dozens of exchanges on which it makes sense to trade. A person physically cannot cover all this manually. A robot can. Or several robots running under different exchanges.
- Speed: While a person thinks, remembers formulas and calculates proportions, the robot will have time to calculate several times more, write out a buy/sell order and close a deal. This is an important advantage of robots in those moments when the price of currencies rises or falls rapidly.
- Availability of strategies: A robot may turn out to be “smarter” than an inexperienced novice, save it from significant monetary losses and make a profit that the novice would not be able to get at first.
- Infallibility: Robots accurate to each character in the formula carry out a given strategy. A person can calculate something wrong, set it wrong, make it wrong, in the end, to see and deprive oneself of profit.
- Emotionless: Robots do not rush about when trying to make a decision from one extreme to the other, do not lose time because of doubts, and do not get nervous looking at the course, unlike their owners.
It would seem that nowhere is better, but experienced traders rarely deal with bots, and even beginners are not in a hurry to put them. What’s the catch?