What Are Crypto Trading Bots?
Crypto trading bots can be defined as software that uses AI (Artificial Intelligence) to execute trading decisions. This means that, by operating a parameter set, you can hold, sell, or buy assets in an automated, efficient, and timely manner, regardless of time and place.
Tips for Using Crypto Trading Bots:
Start by creating API keys
At the very least, you will require a secret and a key (you might even need a password). Make sure that you follow the instructions provided by the exchange. In case your keys fail to work, you should double-check all the information, enter the key manually, try another browser, and, if all else fails, just come up with a new keyset.
Make sure that you keep the API secret to yourself and do not share it with anyone. Ideally, the API secret should be stored offline.
Add additional security features
Try to use strong passwords and 2FA (two-factor authentication) wherever possible. It is important to make each platform as hard to access for others as possible. We also recommend using a different email address for each platform.
Do not provide withdrawing access
Generally, you will not need to provide your bot with withdrawal permission, except if you are arbitraging between multiple exchanges. Not providing withdrawing access helps you ensure that someone else will not be able to use your account to get your money – in other words, the worst that can happen is the person will make bad trades through your account. While this is also not good, there are certain steps you can take to mitigate the damage, such as changing passwords, deleting keys, and reporting the activity through your exchange.
Have multiple strategies
If your strategy is working well in a bullish market, the chances are that it will prove ineffective when the market goes bearish (and vice-versa, of course). Hence, you need to prepare different strategies in order to do well in every kind of market.
Expect losses
While crypto trading bots can increase your chances of doing well, you should not equate automated trading with guaranteed profits. It is certainly possible for bots to lose money. This means that your strategy will play the primary role in determining the amount and frequency of your gains at the end of the day. It is important to remain confident in the face of losses.
You will have to make manual trades in certain cases:
Although bots will use their trading program to close positions for you, there might be instances in which you wish to make a purchase or close your position earlier than the bot. In such cases, you should take matters into your own hands. We recommend using bots as a complementary tool to manual trading rather than as a substitute.
Does a Crypto Trading Bot Really Work?
The answer to this question is a resounding YES. In fact, algorithmic trading has been around for years, and over the last decade or so, it has been responsible for pretty much all the trading activities happening at Wall Street.
Hence, it is less important to wonder if they work or not (because they do), and more important to think about their effectiveness. And the truth is that the effectiveness of a bot will depend upon various factors, such as your chosen platform, as well as your own experience and abilities.
Final Word
Like we said, crypto trading bots do not mean automatic profits, but they can certainly increase your chances of doing well in the long run. If you are looking for a comprehensive trading bot for your crypto trading journey, please feel free to visit crypto engine.
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