More and more platforms advertising using trading bots are appearing on the market, which are supposed to provide investors with passive income from cryptocurrencies. Before proceeding with any activities, however, it is worth taking the time to understand how such automation actually works - is it really a hen that lays golden eggs?
Cryptocurrency trading bot - imaginations vs reality
Lots of people wish their money would just drop out of the sky - and while it's sometimes fun to dream up, be careful not to get lost in it all. There is a deep gulf between unreal desires and reality - but not everyone sees it, so we can witness a flood of users looking for fast, high and guaranteed profit with minimal or no own contribution. One of the paths they follow is the one leading them to pseudo investment platforms with an 'amazing' algorithm allowing them to generate passive income without any knowledge, experience or millions in your account. These wonderful software allow you to earn not only on forex, but also on cryptocurrencies. The user does not have to do anything, it is enough for him to deposit the minimum amount and the money will start to multiply itself. All this, however, is a mere illusion ...
Going down to earth, it is worth getting acquainted with the realities. What exactly is a cryptocurrency trading bot and can an ordinary Kowalski make a huge fortune on it? Simply put, it is a specially prepared computer program that analyzes market data faster than a human being, so that you can buy and sell a specific asset at the right time. Its goal is to observe the markets and react dynamically - according to a set of rules encoded in it. However, automation alone cannot guarantee a profit for users - if it were, everyone would become a billionaire. In fact, making money with bots is not as easy as they are described - and investors who use them need to be experienced! Assuming that most people do not have such luggage, there is a high probability that they will end up in the trap of platforms offering easy money. However, it is important to realize that bots are only a tool that can improve trading and speed of decision making, and they are not a golden ticket to guaranteed income.
Because skills matter ...
The bot can automate cryptocurrency trading, but strategy is also important here. Experienced investors, sharing their observations, have repeatedly emphasized that the "set and forget" rule does not apply here. What's more, there are many types of bots, and each of them is programmed for different purposes, for example, we can distinguish here, for example, those for conducting arbitrations.
Many traders say that the chances of earning money using someone else's software are really slim, as someone who builds an effective bot will not be willing to share it with others.
To sum up, a beginner who has no clue how the market works will not do much in this field.
People lack the ability to analyze and run bots, let alone develop them.
- confesses one of the Reddit users in a discussion on this topic.
Another participant in the debate admits that the main advantage of having such software is the ability to implement the strategy 24 hours a day, 7 days a week. It may allow for greater portfolio control, but still needs its own action plan.
Cryptocurrency trading bots do not guarantee a profit, they can only improve some operations, and thus help experienced traders achieve better investment results.