Crypto trading bot might be the best way to earn money for beginners and understand the basics of cryptocurrency, however, are bots easy to use? Is it really simple to make money with them?
Issues while using Crypto Trading Bot on Exchanges
Here, are issues that can occur while using Crypto Trading Bot to make money on exchanges.
1. You have to keep them active 24*7
If you are thinking that you only have to connect your trading bot to the exchange like coinbase, fill it to the edge of BTC, turn it on and leave on it to trade then you are absolutely wrong.
If you want to get the best from a trading bot, then you have to keep it active for 24 hours daily. The primary way of doing things is to trade BTC into various altcoins, have patience until the price increases and then trade it back to BTC for a small profit. The bot will then repeat the whole process. In order to trade properly, you have to keep it active 24 hrs a day, this simply applies that you have to keep your PC on daily or buy some space on a virtual server.
2. Keeping correct crypto trading bot settings
Putting on the crypto trading bot and expecting to make money is rubbish. The most successful people who utilize trading bot have purchased algorithms and settings from experts. By keeping correct settings, your bot will follow the structure.
3. Regularly watch the market for pump and dumps
Your crypto trading bot may not involve closely with the market which you get from a professional, but it will surely make some mistakes. The bot's settings may include that currently altcoin's price is low and take benefit of it. But, it will not be able to notice, “pump and dump” happening in particular coin.
Pump and Dump could be useful for people who hold a certain coin to drive up the price and then leave out as the price drops. The price of the coin then decreases but trading bot recognizes as this is the best time to buy.
Then, the price of the coin decreases continuously and before you notice it, your trade on the certain coin is 20% below the purchase price, which is very scary.
Hence, it is very much necessary to look after trading bot so that it doesn't indulge in any “pump and dump” coin.
4. Everything can change in a night
As we have observed some instant drops in the price of BTC from starting of 2018, the market is highly volatile, traders can lose everything or create a fortune in a night. For instance, the price of BTC decreases to a great extent when you are sleeping and all the altcoin trades at a minimum 10% below on your bot. If anything like this occurs, you will lose a huge amount in your portfolio.
A crypto trading bot is an awesome way to understand the crypto market for beginners, however, one should only use bot when you can afford to lose it and don't expect anything in return.