In this post we will be talking about crypto trading bots, whether they are legit or not, and if you can actually make money with these crypto trading bots. I will also share thoughts about crypto trading bots that you can actually use.
What Are Crypto Trading Bots?
Crypto Trading Bots are automated trading algorithm aimed at helping you buy and sell crypto currencies. Now, you might ask, who actually decide which crypto currencies to buy or sell and when to buy and sell. The answer depends on the type of Crypto Trading Bots you are using. These bots can make multiple trading, on multiple crypto exchange platforms using the criteria you have set.
Generally speaking, there are three major types of Crypto Trading Bots
Signal bot: It is a Crypto Trading Bot that makes decision based on the tips shared by the crypto experts, normally a computer program fed with data that provide buy and sell signals. The Crypto Trading Bots that use signals to trade are risky. They use the predetermined signals which may not be true.
Arbitrage bot: This is a Crypto Trading Bot that buys crypto currency from one crypto exchange platform where the price is low and sells on the crypto exchange platform where the same currency is priced high. This type of a Crypto Trading Bot also are not risk free as the buy order may not be fulfilled on time due to liquidity, and you might miss the profit margin of arbitrage.
Programmable bot: This is a Crypto Trading Bot that buys and sell cryptocurrencies following the set of rules you have given. This bot can take instructions from signals, indicators, and levels from various pairs.
Are Trading Bots Legit? Can You Actually Make Money With Trading Bots?
The truth is these bots are not money printers. Then there are also Crypto Trading Bots that are outright scams. They ask you to pay a certain amount and get a guaranteed return. The legit Crypto Trading Bots will allow you to have your funds on your exchange. Most of the Crypto Trading Bots use API to connect with your exchange and do the trading on your behalf. Make sure you are not giving all permission because that is too risky. You can allow it to buy and sell but you should block withdrawal. You will also have to set IP address so that every instruction the bot gives come from your own IP address. Therefore, you will have to choose reputable Crypto Trading Bots.
Choose a bot that automates your own trading strategies. You also need to constantly monitor the Crypto Trading Bot. The trends come and go in the cryptocurrency market; therefore, you cannot be always certain on preset algorithm. You will always have to tweak your strategies constantly.
In order to use Crypto Trading Bots, you will have to keep your funds on exchange platform. When your funds on are exchange platforms, you do not actually own your cryptocurrencies. This can be risky.
How to Make Money With Crypto Trading Bots?
If you choose a good Crypto Trading Bot, it will help you do some useful things in crypto trading. One of the main advantage of using Crypto Trading Bot is it monitors the market 24 X 7 X 365, which makes it possible for the bots to take advantage of price fluctuations. When you set certain parameters for trading and the bot trades on your behalf, it will also take out your emotions from trading. One of the major disadvantages for human trading is emotion always come in between. Bots will take away things like FOMO or Panic Selling. Therefore the computer will always take logical decision.
If you have decided to use a Crypto Trading Bot that will guarantee profit, this is not going to happen. If you see a Crypto Trading Bot that guarantees profit, it is very likely that it is a scam. Having said that if you want to use a Crypto Trading Bot that works on your preset parameters and maximizes your profits, there are several Crypto Trading Bots. However, before you buy, test these bots on demo account and learn how they perform.
Crypto Trading Bots That You Can Use To Automate Crypto Trading
Shrimpy: This Crypto Trading Bot does not offer signals. Instead of signals, Shrimpy offers spot trading, portfolio tracking, strategy automation, smart terminal trading, and back trading. The best thing about Shrimpy is long term portfolio management. It can also copy trading strategies from the best crypto trader and apply for you. The plan starts with $19 per month.
CryptoHopper: It is one of the best Crypto Trading Bots. Supports over 100 different crypto currencies an multiple crypto exchange platforms. You get expert trading tools without you having any coding skills. If you are into Market Making. Exchange Arbitrage, and Strategy Desiger, CryptoHopper Trading Bot is for you. You can also gain access to trading signals and get in touch with CryptoHopper community. It has a free version as well as premium version. The price starts with $20 per month.
3Commas: The most popular Crypto Trading Bot, can craft your own crypto trading strategies. It offers smart trading functionality that allows you to set up step selling. Step selling means selling coins when the price goes high. This will allow you to sell on the set up strategy such as selling 10 percent of your asset when the price is $20K and selling 20 percent when the price is $25K and so on. It offers smart cover which allows you secure your profits even in the market volatility, which means it will sell coins when the price is high and buys the same coin when the price goes low. The price starts with $14.50 per month to $49.50 per month.
If you use a reputable Crypto Trading Bots, you might find them useful as they will bring profits to you. But you must be aware that they do not work as the creator of these bots claim. There are certain downsides of these Crypto Trading Bots. They cannot make you millionaire but if you use intelligently you can actually profit form crypto trading.