Are Trade Bots the Future of Crypto Trading? Here is why
Did you know that 80% of the US stock market is now on autopilot? Trading bots have taken over the stock exchange and it is setting the pace for automated crypto trading.
Institutional financial companies that were initially skeptical about the sustainability of cryptocurrency have seen its true potential and jumped on the trend.
They have brought with them trading bots that have been adopted and optimised for crypto trading and the bots are now becoming a thing even among retail investors.
It’s only a matter of time before the bots also take over crypto trading, especially since there have been significant advancements in AI and machine learning resulting in smarter bots.
Additionally, as cryptocurrency continues to gain recognition from key players in the financial industry, we are going to see more people jump into crypto trading.
Now, assume you are a beginner trader, and you have to choose between these two options. One, take a Cryptocurrency trading course that could take days or even weeks to finish or learn the basics of trading in a few hours and then use an AI-powered bot to start trading immediately.
Which one would you choose?
That is precisely why trading bots will only increase in popularity going forward. They save new traders the hassle of building a portfolio and, creating and executing a trading strategy.
Even Experienced Traders Need Trade Bots.
It’s not just new traders that stand to benefit from trading bots. See, unlike humans, machines are not prone to emotions like fear and greed. Bots won’t sell too early for the fear of making losses.
Instead, they will follow the set trading strategy while also leveraging machine learning to analyze the prevailing market conditions. This way, they can time trades more accurately than human traders.
Moreover, since machines can process data faster than humans, trading bots can quickly change between various trading strategies to get the best out of the market. This is especially useful in crypto trading due to the highly volatile nature of the market.
Trade Bots are not Passive Income Generators
And now to address the elephant in the room. No, trade bots will not replace human traders.
Crypto trading requires that traders evaluate their assets using several strategies so that they can know the best time to sell/buy. Among them is the quantitative and qualitative analysis of the asset.
The former involves the analysis of data such as the coin’s trading history, volume, liquidity, and it’s where trade bots excel. The latter involves the analysis of data such as the team behind the coin, its use case, road map, and this is the territory of human intelligence.
So, while it’s true that trade bots are crucial to the future of crypto trading, they will still need human input to bring in maximum profits.