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The cryptocurrency market is notorious for its extreme volatility. The crypto market, unlike traditional markets, never sleeps, and keeping track of it is a full-time job. However, not everyone can or wants to be chained to his or her computer and smartphone in order to make a good deal in a timely manner. So, what are your options if you really want to take advantage of the crypto market's volatility without making it a full-time job? The solution is simple and clear: set up a crypto trading bot!
Today, we'll talk about how crypto trading bots can help you benefit from your trades and why it might be a good idea to start using them.
How does it work?
A crypto trading bot is a software program that executes transactions based on a predetermined trading strategy: in other words, the trading bot places buy and sell orders on the crypto exchange on your behalf. They work even when you're away from your phone or PC, and because they're not motivated by fear or greed, they're more accurate at implementing the strategy.
All you have to do now is connect your crypto exchange account via API, select a trading pair, and set up a strategy. When a crypto trading bot is connected to an exchange, it begins to monitor the market and opens and/or closes trades based on the strategy parameters you’ve implemented earlier. Simply put, a crypto trading bot follows the defined rules and performs the required action (buy or sell) on your behalf.
Whether you like to go long or short, there are different trading systems to choose from, and every type of trader may find something that suits their needs.
The benefits of automated trading
The most appealing feature of crypto trading bots is their adaptability. It makes no difference if the market is bullish or bearish: with the proper strategy and tools, you can benefit regardless of the market status: you can always adapt them to your own trading style and methods.
Works 24/7 and saves time
Unlike traditional markets, the crypto market operates 24 hours a day, seven days a week. At the same time, being glued to your laptop or smartphone 24 hours a day, seven days a week is obviously not possible. This is where bots can be quite useful. They can keep an eye on the market at all hours of the day and night, saving you a lot of time. All you have to do is check in on them now and then, and manage or establish new ones as needed.
Increases number of deals & multiplies trading speed
No human being can trade at the same speed as a computer program that can place several orders in a fraction of a second (one 64 millionth of a second if we are talking about HFT bots). Making bots to trade for you increases your trading speed and it is definitely an idea worth considering when you trade multiple pairs at once.
Moreover, a crypto trading bot will ensure that your order remains at the head of the orderbook, ensuring that it is executed first, whereas doing so manually would exhaust you.
Protects you from emotional outbursts
When things start to go wrong, you become emotional unintentionally. And trading emotionally nearly always results in losses because you abandon your well planned strategies and game plans in favor of behaving impulsively. Crypto trading bots are emotionless and always follow the algorithm that was previously placed into them.
Cuts the routine from your trading
Using automated crypto bots can make trading more convenient. We all know that trading in the crypto market, which is known for its extreme volatility, can be stressful, and that winning more and losing less requires significant research on current trends, market circumstances, and upcoming events. Crypto trading bots might help you simplify this trading process. Moreover, crypto bots can open and close the deals ten times faster than any professional trader, so you don't have to do all the work manually.
Conclusion
In terms of saving time and enhancing your trading performance, a crypto trading bot might be a useful tool. Allowing the robot to keep an eye on the market can help you avoid missing out on the best deal. Furthermore, crypto trading bots can trade hundreds of times faster than humans, providing you the advantage you need to take advantage of the crypto market.
Keep in mind, however, that the bot is merely a tool, and it is up to you to make sure it works properly.
Disclaimer
The views and opinions expressed in this article are solely those of the authors and do not reflect the views of Bitcoin Insider. Every investment and trading move involves risk - this is especially true for cryptocurrencies given their volatility. We strongly advise our readers to conduct their own research when making a decision.