What is a crypto trading bot?
A Crypto Trading Bot; In its simplest definition, is an algorithm that analyzes the best strategies and performs buy/sell actions automatically without the need for manual decision-making within the most optimal conditions, on behalf of investors. Trading bots are also known as ‘algo bots’ or algorithmic trading bots. The use of bots is common in financial markets and and is becoming more and more common on crypto exchanges as well.
Crypto Trading Bots use purposes
The purpose of crypto bots is to enable investors, like yourself, to trade with less effort by spending less time in the world of cryptocurrencies, thus saving time and providing you with the opportunity of spending more time enjoying your private life. In addition, manual order entry requires intensive market monitoring and is time consuming.
Sitting and manually trading your favorite crypto, ADA, BTC, ETH, DOT or CAKE amongst many can be very time consuming and cause the investor to spend more time in the market at the beginning of their trading career especially when the volatility, and price fluctuations are high.
In such cases, good psychology and decision making are required when analysing market conditions. Which is why using a trading bot is the most effective tool available if you would like to be involved in the crypto market, but just don’t have the time.
In short, We can define crypto trading bots as a computer algorithm that realizes buy/sell opportunities at the right time in order to keep the profitability at the highest level according to the conditions that were predetermined at the time the bot was set up by the investor. Trading bots perform automatic transactions as soon as it finds the most profitable buy/sell signals according to factors such as time, volume, price and order.
Trading bots are generally effective in the long-term where they can beat HODL-ing.
Take for example our ETH Infinity bot, it has performed automatic transactions since December 1st 2020, and since then it has made a staggering 2044.12% ROI while HODL-ing ROI is 780%.
Types of Trading Bots
Just like the many types of cryptocurrencies, Bitcoin, Ethereum, Caradno and many others, crypto bots are divided into types according to their intended use and strategies.
The most known trading bots are called ‘arbitrage bots’. An arbitrage bot allows you to buy an asset cheaper in one market and sell the same asset for a higher amount in another market. It has determined the price difference that may occur between the markets as a profit strategy.
The bots that trade according to the trend and try to gain profitability by analyzing the instantaneous fluctuations in crypto assets.
‘Market making bots’ are bots that create multiple buy/sell orders in order to make quick profits and create the spread that determines the price of the commodity. Orders realized within the difference of spreads to provide profitability.
‘Coin borrowing bots’ are bots that are effective in futures trading, determining the maturity rate of the crypto asset, and borrowing crypto assets.
If you would like to have a passive income opportunity or are new to trading, since trading bots save time for the investor and are a good tool to support new traders that do not have technical analysis skills, then you should be using trading bots.
The development of trading bots requires deep technical knowledge in market analysis and coding.
At UpBots, we make your life is easier by providing you all the bots you’ll ever need to beat the market under any condition.
Take command of your future and set up your first trading bot today! Check out our entire army of Upbots that is available to you in our Algo Rental section.
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