Is there a correct way to use cryptocurrency bots in order to enhance trader’s profits and if so, how? Ruchi Gupta asked the question in CryptoGlobe, questioning the effectiveness of automated crypto trading.
Cryptocurrency bots, as the name implies, are robotic. They are promoted as an easy way of trading, as they run on autopilot and don’t rely on the investors’ every waking minute. The tool is designed to make trading decisions on the investor’s behalf according to a pre-tailored algorithm, based either on the trader’s own algorithm or a trading strategy built in by the developer. The more advanced the algorithm, the more likely is a profit can be gained, or so it’s reported.
The crypto bot’s main advantage is peace of mind, as the devices will take of business while traders sleep. No more disturbing “what if” thoughts; everything is in hand and algorithms work for the trader.
So why isn’t everyone using them and putting their attention to more important business while they manufacture money on autopilot?
It appears that off-the-shelf bots with fixed algorithms may be fine in the long term but apparently, they won’t last. Because of the dynamism and fluctuating fortunes of the cryptocurrency market, it’s hard to establish any sense of permanent strategy using the bots, resulting in diminishing results for the expectant trader as time moves on.
To overcome this problem, the latest development is the AI bot, also seemingly suited to those who need to rely on others’ expertise as their own ability to tackle the complexities of trading in the cryptocurrency market is lacking. The crypto bots with artificial intelligence are a step down that road from the off-the-shelf model, also integrating the capabilities of the custom-built variety, which normally relies on more specific trader knowledge. The AI bots are able to modify strategies to suit the condition of the market, reprogramming themselves as they do so, requiring no further trader intervention, apparently doing the job of both.
If this seems to be the solution for the new crypto trader, the bad news is that a robot is still incapable of accounting for every variable in the market that might affect trade and volume. It’s a robot. It lacks human intuition and, most importantly, given today’s crypto media full of hype, spin, and fake news, basically, it can become confused, limiting its ability to read the market accurately.
So back to square one?
The advice to new traders with a limited knowledge of the cryptocurrency market is, do your homework first before you train your bot.
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