Bot for trading on the stock exchange: how to choose and use?
Cryptocurrency trading has become very popular. Many realize that this is a complex process. Therefore, users are trying to find a way out and use assistant programs for trading cryptocurrency. But how correct is this approach and will the bot trader help to earn something in the future?
Automated trading has long established itself in binary options trading and Forex, and now it has come to cryptocurrency exchanges. What is a bot trader for cryptocurrency trading, can such a program be trusted, and which assistants are the most reliable? Also learn more about binance trading bot.
Trading bot (trading bot) : types of assistant robots
A robot (trading bot) is a program that works according to an algorithm. It buys or sells assets based on market conditions. The first trading assistants appeared in 2012, and since then they have become more and more perfect.
In Forex and binary options, more than 90% of short-term transactions are concluded either with special programs or with their participation. There are 4 types of cryptocurrency trading assistants (trade bot crypto):
Bot trading : the principles of the robot trader
Trading bots for automatic cryptocurrency trading operate according to special algorithms, trading strategies, which are created on the basis of a technical analysis of patterns. To conduct an independent analysis, you will need historical data on course changes (charts for at least the last year), sometimes it is possible to detect a relationship with the news.
After identifying patterns, the strategy is tested on the same historical data, and the number of potential losses and profits is calculated. And if the results are satisfactory, the rules of the trading strategy of the robot for the cryptocurrency exchange are created on their basis. Sometimes a cryptocurrency trading bot additionally uses indicators that allow you to analyze the current situation on the market. Others are executed only under specific market conditions.
What is a bot for a crypto exchange, what is an arbitrage bot that operates according to a very simple strategy, for example, this one:
When the price of a cryptocurrency decreases, you need to buy it.
When the price rises, it must be sold.
Or much more complex. The algorithm can take into account recent historical data, indicators, and navigate by signals. Assistants analyze more than a hundred parameters when placing orders.
A standard exchange bot can perform the following actions:
Conduct an assessment of the market situation, monitor the course for a given period of time, make a forecast. During manual trading, the bot for working on the stock exchange can show signals for the trader.
Create buy or sell orders.
Provide reporting on profit or loss.
Trading bot cryptocurrency : where to get advisors for trading?
There are three options for getting robots for trading digital assets:
Create a program yourself.
Purchase.
Free download.
How to write a trading robot for a crypto exchange? To do this, you need to be familiar with programming. A robot for cryptocurrency exchanges is written exclusively for a specific platform. Accordingly, the site must offer an API. This is a set of information about the state of trading and a set of functions that allows you to start trading according to user-defined parameters. When it comes to arbitrage advisors, they are written for several platforms.
The second option is for those who do not know how to program or do not know how to write an application. Quite a few companies are engaged in writing such software and you can buy a bot for the exchange or rent an adviser. Traders can buy a cryptocurrency exchange bot from programmers with a unique set of features.
The third option is to download the software for free. It has its advantages in that you do not need to invent anything, write programs or pay money. But the disadvantage is that the user cannot be sure that the trading bot for the exchange will not, for example, transfer all earnings to internal accounts of third parties.
What are the advantages of a robot for trading on the cryptocurrency exchange
The robot does not know how to be afraid and is not able to show greed, deviating from a premeditated strategy. Since psychological factors make up 60% of trading, almost two-thirds of the reasons for failures can be eliminated by installing an adviser. Exchange assistants also have the following advantages:
The EA is able to cover much more variables at the same time. If a person can take into account only 9 variables at most, and then with good experience, then the program can simultaneously analyze the readings of several indicators, correlations between related assets, and then combine all this colossal array of information into a single solution. Man is incapable of it. The machine is much better at dealing with the quantitative aspects of trading, while the human is much better at dealing with the qualitative aspects. And if they work together, the effect is amplified several times over.
Automatic cryptocurrency trading. Sometimes you can offload all the work to the adviser, and do other things yourself. This is especially good in times of a stable market, when everything is very easily predicted by technical analysis methods.
High speed of operations. It takes a lot more time for a human to analyze the market than for a computer.
High accuracy. A technical assistant will never make a mistake (except if there are some bugs in his code).
The adviser does not get tired. Under the influence of fatigue, the quality of a trader's work can significantly deteriorate. The trouble is, he won't even notice it. The robot will be able to work for the benefit of the trader 24/5 without fatigue. And some advisers can still learn and improve the quality of work over time.
In addition, some advisors have additional features, such as SMS alerts.
What are the disadvantages of a cryptocurrency trading bot
Earning millions only on advisers only seems real. Often such slogans are used by scammers who sell a dummy, which, at best, will not bring any benefit. Trading robots also have a lot of disadvantages, and let's list them.
Expert Advisors should not be used during times of market instability. Any unexpected news can drastically change the direction of the price. The robot will not even know about it, so it will make unprofitable deals. Therefore, at least you will have to look after the program.
Helper programs use only technical analysis, which is based on effects, not causes.
The program has no emotions. Yes, this is not a mistake. The lack of emotions in a trading robot is also a disadvantage. If something does not go according to plan, the person will get scared and close the deal, but the robot will not be able to. Of course, if it does not have a loss control mechanism, which most Expert Advisors do not have.
The ideal way to solve these problems is to turn the EA into semi-automatic mode. That is, the robot will only give signals, and the trader himself decides whether to listen to these tips. But then some of the benefits just disappear. In general, a competent trader knows how to deftly balance between the pros and cons of advisors.
Is it even worth using a bot to buy cryptocurrency ?
In the question of whether a trading robot can be trusted, a balance must be struck. To paraphrase a well-known saying, "Trust in a robot, but don't make a mistake yourself." Of course, the adviser will be a good helper, but it is worth remembering that his task is to help the trader, and not interfere with him. Therefore, sometimes you need to control it.
The ideal option is to write the code for the robot yourself. In this case, you are fully responsible for the actions of the program. In this case, she can be trusted, but not completely. Because one of the main drawbacks of automated trading is the lack of flexibility. This problem is partially corrected by neural networks, but now no artificial intelligence is able to be as flexible as a person.
Are exchange bots necessary for beginners ?
Beginning traders make a lot of mistakes. The first attempts to trade cryptocurrency are usually unsuccessful. However, it is human nature to learn from mistakes. Over time, a beginner can become an experienced and successful trader.
Unlike a person, the program will work only according to the given algorithm. Therefore, if a beginner begins to use the robot for trading, he will not learn anything.
The cost of primitive trading advisors is approximately 10 USD per month. Arbitrage robots - 500 USD, and even more. Note that they are designed only for some typical situations that occur extremely rarely in stock trading. Thus, a trader, having paid a large amount for using the software, may not receive any profit at all.
Theoretically, robots can bring a good income. However, in order for them to be profitable, a significant number of factors must be observed.
From the income generated by the assistant program, subtract:
exchange commissions;
payment of bills for the use of electricity;
the price of the robot itself.
Cheap programs costing 15-25 USD pay off for a long time. In many cases, such robots will not return the funds spent on them. Expensive technical advisors from famous developers can pay off over time, and even bring good profits.
However, remember that the market lives and will not specifically adapt to the program algorithms. Therefore, the use of such software is an extremely risky decision. It makes sense to use assistants only for professionals who are able to reconfigure the program for a constantly changing market situation. Traders cope with this task on their own, without the use of robots. For beginners, we do not recommend starting cryptocurrency trading with the help of special assistant programs.
Overview of popular trading bots for trading cryptocurrencies
There are many options for bots. The popular ones are:
Haasbot is a set of robots designed for trading cryptocurrencies. Developers offer three types of license, valid for three months. The cost is from 0.09 to 0.24 BTC. The more expensive the license, the more features the user will get. In general, the platform in question was created professionally.
Cloudbot 2 is designed to earn on BTC. The program works on the basis of two strategies. The first one is called Long. The idea is to buy BTC for the second cryptocurrency in the pair and then sell it. Income is calculated in the second currency. The second strategy is called "Shot". The bottom line is to buy another currency for BTC and then sell it at a higher price. Profit is accrued in BTC.
1b bot is a robot with a ready-made trading strategy that takes into account more than one hundred and forty variables. Designed to work with BTC. Users customize the software to suit their own strategies.
Bot-2 is a cloud robot. Works around the clock. The trader can indicate the desired profit himself, and the system itself will tune in to the task. Works on six major stock exchanges. The subscription price is approximately 15 USD.
Feedback on the work of such programs is contradictory. Firstly, the network is full of custom comments on various thematic sites and forums. Secondly, if you find honest reviews from satisfied users, this does not mean that the mentioned robot will make a profit. The market is changeable. In some conditions, the same bot can bring profit, and in others - losses.
conclusions
Trading advisors with their clear algorithms and wide capabilities are able to protect users from a lot of mistakes. On the other hand, traders who have not worked with such programs before are advised to study them better. For this, many developers offer demo accounts.
Cryptobots have advantages and disadvantages.
Advantages:
monitors the market, places orders and does the main work for the trader;
unlike a live user, the program does not give in to emotions, which is important in an unstable crypto market;
efficient and profitable.
Disadvantages:
can be quite expensive to operate;
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