ABOUT TRADING BOTS I.
A 2-article mini series – part I
We did a research on trading bots. Many people have heard the term but nothing else. Many people know something about them but what they know is not really sufficient information to be able to decide whether trading bots are of any use for them. And there is a common misunderstanding, too, that we would like to highlight and clarify.
In the first part of our 2-article mini series we are taking a closer look at the mysterious trading bots, where they come from, what they do for us. And we are also looking at the most frequently asked question: Are trading bots simple automatic passive income generators or would that be too good to be true?
Trading bots are actually computer programs that perform automatic trading, based on various indicators, recognizing exchange trends. They were first used in traditional exchanges but it was obvious that it was only a question of time for them to conquer the crypto space.
There are lots of crypto-currency trading bots. Some of them are free, some of them are subscription-based bots trading for professional traders.
You have to be aware that using crypto trading bots, mostly as a beginner, you are taking a risk because you practically give your money to a third party. And just as we hear of ICO scams, there are trading bot scams, too. You are strongly recommended to find out about the background of a trading bot before you decide to use it.
For example, members of the crypto community have warned about a Bitcoin trading bot called Hexabot. According to users, Hexabot first stopped withdrawals from its platform and then its website went offline and disappeared. It most likely means that the platform’s owners did that on purpose, taking the users funds.
Many people think that trading bots are a kind of passive income generators but it’s very important to know that they are just tools to assist you as you learn and your knowledge grows with the crypto market. Trading bots won’t just simply make you money in your sleep. And if you read that kind of promise about a trading bot you’d better get suspicious about it.
It doesn’t mean you cannot generate trading income using crypto trading bots. But it’s not possible without the right strategy and regular adjustment of your bot’s settings.
Let’s conclude the first article of our mini-series by reminding you that although the crypto space offers the possibility to get to higher profits more quickly, you have to remember that the more volatile the market, the higher risks you take. In the case of trading bots that are only a few years old and are being used in an immature illiquid market, the risks are even higher.
You can read the 2nd part of our mini-series here.