Trading bots are automated software programs that trade cryptocurrencies or other financial markets based on predefined conditions. Implementation of an automated trading bot can be an accumulation, to long-term holding strategies and stop-loss.
Finding crypto trading bots to implement a specific trading strategy, competing to attain the highest “win rate”, or percentage of profitable trades is one of the desires of traders in the market.
The cryptocurrency trading bot strategy could be a mesh of various trading tools such as technical analysis indicators and market conditions.
There are trading bot platforms that offer crypto trading bot services.
Advantage of Trading Bots over Humans
Investors in many cases cannot react quickly enough to changes in price to achieve the optimal trades that are theoretically available to them. Crypto trading bots on the other hand, strictly follow the strategy and implementations set before deployment. This gives them an edge in making decisions without the effect of emotions, unlike human traders who are prone to emotional trading. They also react to market conditions quicker because they are programmed to execute trades when certain conditions are attained. This allows users to partake in emotionless trading and take advantage of the consistent trading discipline of trading bots.
Are Crypto Trading Bots Profitable?
Crypto trading performance would depend on how successful the cryptocurrency trading strategies the bot implements play out in the digital currency markets.
One key type of bot is the arbitrage bot, which looks to take advantage of price discrepancies across exchanges. This has been profitable for traders who have successfully implemented a working strategy.