Cryptocurrency, one of the most volatile currency formats, never stops trending. Recently, a piece of fun news trended online stating that the famed geodesic dome inventor, Buckminster Fuller, was actually the inventor of cryptocurrency. Also, in another case, the US prosecutors had caught an online crypto fraud in the Mango Markets Cryptocurrency Exchange. Despite all this, financial market analysts have recorded an 86% rise in cryptocurrency value with the usage of a bitcoin robot. They have already predicted its rise to a whopping 99% in the current years.
In this write-up, we will discuss the working of the robots (or bots), the reasons why they are garnering popularity with time, the lag in human calculations, and what factors we should check before choosing the robot. Let’s scroll down to garner deeper insight into the same –
Why are robots becoming so crucial?
Cryptocurrency is a market that is functional 24x7x365. Since the price fluctuates at every turn of the clock, and there is no mechanism to control the same, therefore human monitoring falls flat in such a competitive market.
Investors cannot completely devote their attention to the fluctuations, hence, they seek the services of bots. Officially known as ‘trading bots’ – they are automated tools that not only manage the trading operations but also execute transactions on behalf of the concerned human investor.
For the record, there are varied types of bots available – such as arbitration bots (tools to study prices across platforms), historical price data bots (use historical data to track prices), and price-volume of trade bots (programmed to execute trade depending on the monetary value) to name a few. You may choose one that suits your requirements.
How is bot analysis different from human ones?
The significant difference that a robotic analysis brings to the table vis-a-vis a human analysis is – the data interpretation by artificial intelligence. Bots use a subset of the algorithmic trading program and are mutated to respond to the mathematical, technical, and enhanced statistics immediately contrary to human intelligence (the human brain requires a minimal processing time).
That is just to start with. Robotic analysis alternatively known as Robo trading uses algorithms to strategize the next move. Also, they analyze raw market data in an instant and judge the position of the asset much earlier than a human brain can process.
Have you heard about the concept of ‘social copy trading?’ These automated tools copy the strategies used by the experts and apply them in an instant. This saves prior considerations which any human brain is prone to make. The notable factor of this bot analysis is that they are programmed to function at a lightning speed, and use mathematical formulas to predetermine the trading strategies.
These are just to start with. We understand as a novice, the aforementioned reasons might not be enough to incorporate a robotic mechanism into your cryptocurrency trading format. Therefore, in the next section, we will give you some more reasons to opt for them in your crypto trading feature.
What benefits do robots accrue to the market?
The advantages they bring forth –
- Efficiency is the key to success
As mentioned before, the key to success here is efficiency. Trading bots are algorithmically enabled and can handle large data vis-a-vis humans. Also, they are less prone to mistakes and provide plausible inferences post-analysis within a restricted time. Understanding the volatility of the market, their response is characteristically quicker than the human one.
- The Profits that they garner
Courtesy of their minimal processing time, the profits that a bot brings to the account are comparatively higher than a human trade format. The lack of emotions followed by the programmed decision-making result in incurring higher trade margins.
- Enhanced speed and ease of usage
The ease of usage (when you get a bot for your trading, a manual explains details that enhance the usage) even for a novice categorically improves the user experience. Add enhanced speed to that – and you get a winning combination in the form of a robot.
- Accuracy levels
It has been proven multiple times, a robotic trade mechanism has an accuracy level of 93-95%. That is a bigger number in accuracy compared to the data received from the human analysis.
You will receive this set of positives and a lot more when you decide to use the services of a bitcoin robotic mechanism as your shadow. But before you take a pick, here are some factors that you must keep in mind.
What should you check before choosing?
If you are a novice, then check these beforehand –
- The Bot’s strategy matches your demands
Different bots come with their integrated strategies. Some may be long or short terms, while others are immediate ones. Here you need to come forth with your demand. You must choose the robot according to your trading goals.
- What is your investment horizon?
Before you choose a robotic mechanism, you must be sure of the amount you will invest and for what time. This fund will also include the trading fees of the robot. Additionally, you must be prepared for a certain amount of risk associated with the trading. Make your investment horizon wide to include the above factors.
What factors you should be cautious about?
Having understood every facet of using a robot, lastly, you need to check if there is any particular aspect you should be cautious about. Here are some –
Despite the range of benefits, an automated system brings, the instability of the crypto market does require the intervention of an expert trader. The concerned person unlike the robot (which takes into account the given data) uses certain social conditions (which more than often intertwine with economic instability) to make the decisions. Thus, robots cannot accurately (with a 100% success rate) predict the market. A margin of 3-5% always remains.
Robots mathematically approve decisions but human traders will comprehend social factors as well (the stability of a society affects the economic stability of that country. The current social instability in the Russia-Ukraine market directly affects the crypto trade of that domain).
Also, these robotic mechanisms have come under scanner multiple times. Fiscal agencies globally have unearthed huge scams associated with the usage of bots.
Take a calculated step
We hope you could garner a wider view of the bitcoin robot and its usage parameters from this article. Therefore, we request you make a calculated investment into this assistance format. If required, there are multiple agencies with their expert advice available at your disposal.