In essence, cryptocurrency trading bots are programs that help people trade digital currencies by automatically executing trades. Throughout this process, they reduce the time it takes to trade and keep track of your portfolio’s performance. It’s also possible to set trading limits, auto-convert crypto, and much more – trading bot features are usually manifold.
Sounds nice, right? Yes, but can such bots actually make you money in practice? Well, that’s actually a complicated question. Let’s find out the details.
Benefits of trading with a crypto bot
Of course, one of the main benefits of using a trading bot is that it reduces the workload required to trade. It does this by performing all the necessary functions on your behalf, allowing you to focus on other aspects of your life without sacrificing your financial progress.
Another benefit is that having a bot makes it easier to diversify your portfolio, by allowing you to scout for profitable opportunities across multiple crypto markets. You can also set up complex stop-loss orders without having to calculate the amounts yourself.
It’s even possible to manage your accounts from multiple devices, which is ideal for anyone on the go. Additionally, many bots allow you to easily check on the status of your accounts at any time. This way, you can stay informed about the performance of your portfolio and make changes accordingly.
Again, sounds great, and it is – if you are an advanced crypto user who knows how to utilize a complex crypto trading bot in the best way, that is. For such users, there’s no doubt that trading bots will be quite a helpful ally that will save precious time.
Disadvantages of trading with a crypto bot
However, trading bots are quite difficult for beginners to use. For one thing, they are complex and require a lot of patience and dedication to learn. They’re also vulnerable to hacking since most trades are carried out automatically. Plus, it’s difficult to tell if your bot is running correctly or if it’s causing you to lose money.
Unfortunately, many newbies in the crypto world turn to trade bots, as they see them as a shortcut to making a profit. Usually, such beginners quickly learn that, in this case, there is no easy way out – taking the time to learn about the cryptocurrency market trading is still a must, whether you use a bot or not.
If you still know little, figuring out how to use a trading bot will be quite tricky. While inputting your preferred trading strategies, you will be bombarded with concepts and expressions you most likely don’t fully grasp. Yes, you do need to come up with a trading strategy by yourself – a trading bot won’t help you there.
Add to this a myriad of complex features that trading bots come with that you will need to get the hang of, and you get a recipe for disaster.
Crypto trading bot scams
In addition to practically guaranteeing a loss of money when used by inexperienced traders, many crypto trading bots are, in fact, nothing more than scams. Immediate Edge, Bitcoin Fast Profit, Ethereum Code, and many others pose as legitimate trading bots, but they don’t actually work at all.
The only thing that’s in working order with such scams is the option to place a deposit (usually, the minimum is $250). Needless to say, as soon as you place the deposit, you can say goodbye to it, as well as to any chance of making a profit with that bot.
There are several red flags indicating that a bot is, indeed, scammy. If you notice just one of these, it’s best to choose another bot.
- Multiple websites. Most often, the con artists have several websites prepared for these scams, which is why their ‘bots’ have at least three nearly identical official websites. As soon as the scam is busted, by simply changing the text and images, the con artists refurbish one or more of these websites to fit the new scam.
- Ridiculous promises. When a trading bot developer promises a 90% accuracy rate and thousands of dollars in daily profit, that’s the moment to look for another bot. The reason is that such numbers are simply not possible, as the technology isn’t there yet.
- Fake reviews. You can easily check if the user testimonials on the official websites are genuine by using the Google Lens service. If it’s a scam, you’ll find the same images, but associated with different people. In addition, check user reviews on Trustpilot. The platform is diligent and usually warns users about unethical products and services, including trading bot scams.
In fact, there are much more signs of scam platforms. We suggest get more details at ScammerWatch.
So, crypto trading bots are a great tool, but only if you’re crypto-savvy enough to put them to good use and if you steer clear of the many trading bot scams. Otherwise, such bots will only lose you money.
Guest Post by: Kong Lu – Certified blockchain and front-end developer