Amazing Facts on Cryptocurrency Trading Bots
A common feature among all cryptocurrencies is that they are very volatile. Crypto currencies can skyrocket in value within a matter of hours and the nose dive just as quickly. Traders in the cryptocurrency space utilize various skills (like fundamental analysis or technical analysis) to assess the market and make a decision. Most traders use old-school trading techniques to assess the market whereas others that are more tech-savvy prefer the use of bots that do the actual trading for them.
Crypto currency trading using bots is easier but you need to know what you are getting into before you choose a bot to do the trading for you. Bot trading is letting a computer program handle cryptocurrency trading for you. Bots work by connecting to exchanges and carrying out trades as they have been programmed. Bots gather facts on issues like price movement, volume and time then make a decision. Each trade programs the trading bot based on what they want it to do.
The cryptocurrency bot trading industry is also full of scammers and some faulty cryptocurrency bots. You need to do your due diligence to make sure that the bot you settle on will perform as per your expectations. You can ask around from online forums on legitimate and good cryptocurrency bot trading companies. If a company has too many negative reviews steer clear from it.
Trading bots are not a new concept in traditional trading markets. The reason, why these bots have been unpopular, is because they lack direct market access (DMA). Traditionally, even though trades are done immediately but the transaction must be fulfilled by a brokerage firm. In the cryptocurrency world traders are granted direct market access thus they can use bots to trade unlike in traditional.
Crypto currency exchanges run for 24 hours a day every day of the year.For a trader this can be an advantage or disadvantage. Because the market is always open means that you can capitalize on any opportunities that present themselves. The downside is that human beings need to sleep and the market can fall when you are asleep. However, with a trading bot trading can happen even when you are asleep.
Merits of utilizing a trading bot
Bots can run continuously without fatigue thus they will trade for you even when you go to bed. Bots reduce the risk of human error since they have set instructions that they follow. These and other facts could explain why crypto trading bots have become very popular.