The cryptocurrency field is constantly developing. The new tools and utilities for both beginner and experienced traders appear on the market to make the process of buying, selling, and storing crypto coins easier. What is even more important, that most trades in the niche of digital money are now performed by automated trading software, namely crypto bots. Thousands of traders use bots to perform the deals automatically, receive notifications about the changes on the market, elevate trading to a higher level and get more profits. If you would like to know more about the opportunities offered by crypto trading bots, this post is right for you.
Crypto Bot: Introduction
Crypto trading bot is a unique software that helps traders execute deals according to the pre-designed strategies. In other words, the bot can act on a crypto exchange on your behalf. There is nothing new that the prices for digital coins are constantly fluctuating, so making successful deals often requires completing in a matter of milliseconds. Of course, the human trader is not able to trade within such speed limits. So, here comes the bot.
The most amazing thing about a crypto bot is that you can set it up according to your individual buying and selling strategies. This feature might be incredibly convenient for skilled traders who have their particular visions on how to make successful deals. While those who know programming languages, like Python, can code the crypto bot for even the most sophisticated trading ideas.
Beginners can benefit from using the crypto bots, too. The fact is that you can set up your bot to act similar to bots of more experienced traders operating on the exchange. This allows newbie traders to start earning money on crypto trading in no time.
Moreover, bots are restless and can work for you days and nights. You can also set up your bot to make deals on weekends not to miss a brilliant opportunity.
Types Of Crypto Bots
There are various types of crypto software that can make deals for you. Let’s discover more facts about the types of bots you can start using right now.
Arbitrage
These are one of the most demanding bots on the market. The core operating principle of this solution is to benefit from the pricing discrepancies on different exchanges. The bot can help you monitor various exchanges, buy coins for a lower price, and sell them for a higher cost. These tactics are considered one of the easiest alternatives to start earning money by trading crypto.
However, arbitrage bots gained fantastic popularity before crypto trading hype overwhelmed millions of people in dozens of countries. Now, these bots are often losing their effectiveness since crypto exchange spreads are narrower than a couple of years ago. To put it short, you can get significant profits only if trading cryptos in high volumes.
Market Making
This type of bots is based on analyzing order book spreads. As the coins are traded, their spread continues to increase. This allows digital crypto helpers to bring higher profits to their happy owners.
In short, market-making bots perform only orders that have higher rates on the exchange to boost your revenues. The digital crypto assistants are constantly monitoring and analyzing certain parameters on different exchanges to pick up markets with bigger spreads. Therefore, the bot users can get benefits related to time and volume.
Trend Trading
The main object of this type of bots is a trend. What does it mean? The bot can examine a digital coin momentum, as well as the number of its buying and selling orders. If the price for a particular crypto-cash goes up, the bot opens a long position. In case the price decreases, your crypto trading helper will switch to short positions.
The trend trading principle is based on the assumption that the asset will continue moving a particular way for some period of time. This hypothesis allows traders to buy and sell their coins accordingly and gain profits. The crypto bots can analyze various complex indicators, including momentum, price action, and trends. It is possible to set up a new bot by adding all these parameters and many more to allow it to perform specific actions based on your needs.
Coin Lending
There is also another popular way to earn money by trading digital coins. You can lend margin traders your crypto assets and get them back with an added percentage. This option is gaining popularity on many exchanges, including the most popular ones, like Poloniex and Bitfinex. Although taking advantage of this type of activity might take you time, it faces an increasing demand from experienced traders. So, what is its main challenge?
The main difficulty is that the traders should establish a particular set of parameters when
margin traders pay the crypto money back and come up with new loans. This setup can be made only manually and requires much time. However, using bots can speed up the process using automation. They can pick up the most attractive rates and run the best options available.
As for other types of bots, you can set up your coin lending digital helper with your unique strategy in mind. It is possible to select several currencies, choose the date to get the loan returned, and lend back only when particular rates occur on the market. Not to mention, many coin lending bots are available for free. However, they are likely to fit the needs of expert traders since operating this type of bot requires having a deep understanding of the operating principles of financial and crypto markets.
Signal
This automated crypto assistant takes advantage of using external signals for buying and selling coins. The signal that might make a bot initiate a deal is usually based on technical parameters, news, and other indicators.
The True Benefits Of Using A Trading Bot
- Top trading speed: bots can make dozens of operations on different exchanges within seconds;
- High volumes: crypto bots can make operations with various types of coins and trade in different volumes according to your needs.
- Round-the-clock trading: You will never miss a fantastic deal with a bot operating 24/7.
- More free time: the bot can analyze the market, collect the necessary parameters, make deals on your behalf, and send you notifications if needed.
- All emotions are under control: bot will not hesitate whether to perform this or that deal – it will do everything automatically.
Conclusion
Crypto bots remain a powerful and extremely useful solution to trade on various exchanges in a fast and effective way. You can start using any type of bot and set it up according to your needs and goals.
