In the hands of a capable trader with plenty of market experience, a crypto trading bot can be a beneficial ally that will successfully automate some of the trading activity. But if you wouldn’t call yourself an advanced trader just yet, then the truth is – you don’t need a trading bot.
Not only that, but a trading bot would in all likelihood lead to a loss of your investments. The reality is contrary to popular belief – trading bots are actually not best suited for beginners. And here is why.
1) It’s difficult to use a trading bot
The basic misconception that most people have about trading bots is that the software will take over the entirety of their trading activity, leaving the user free to relax and count the money. If that sounds too good to be true, that’s because it is.
For a trading bot to function as intended, it will need plenty of user input. You must first set up a trading strategy and then modify it according to market movements. And to do that, you’ll need to know exactly what you’re doing. Therefore, there is plenty of research and learning ahead of every crypto trader before they’re able to successfully utilize the bot.
If you have just a vague idea of how a trading bot works, you won’t get far with it. Those users who aren’t experienced and proficient enough will find that they’re confused by the interfaces and myriad of options that trading bots come with. And when you do get to live trading sessions, the bot won’t do you much good unless the trading strategy you set up is a sound one.
You don’t need a trading bot right now, but you do need to learn and improve. One way to do that is at CryptoDaily.se, a reliable cryptocurrency portal. The more you read and apply what you’ve learned to the actual trading, the closer you will get to be able to put a trading bot to good use.
2) Many scammers are preying on users
Even if trading bots weren’t so hard to use, there’d still be a problem of trading bot scams. The con artists are targeting beginners, who are lured to these scams for the very reason they were interested in trading bots in the first place – the promise of a lucrative passive income.
The Yuan Pay scam is a good example of what most of these scammers are doing. They create multiple websites for their ‘product’, post fake reviews, and make promises of ridiculous profits ($800-1000 per day). And with such attractive figures, it’s no wonder that many take the bait.
The sheer number of these scams doesn’t help either, as there are dozens and dozens of them. And they all look alike. For instance, there’s not much difference between Bitsgap and Yuan Pay. After registering, these manipulative people will actually call you on the phone in order to urge you to invest, all under the mask of kindly wanting to help. However, after placing the minimum $250 deposit, you won’t be hearing from them again. Sneaky.
3) Trading bots don’t eliminate emotions when trading
You often hear that one of the key advantages that trading bots have over humans is that the software doesn’t feel emotions. Sure, emotions can indeed compromise one’s trading decisions. They can make you panic, invest more than you should have in a crypto you’ve come to be a fan of, etc.
Yes, when it comes to crypto trading, it’s best to leave emotions at the door. But a trading bot, in fact, can’t do that. How come? As we said, before a bot can do some good, it will need you to input a trading strategy. A trading strategy that you have devised. And if emotions have played a part in shaping that strategy, then the machine will indeed be trading with emotions involved.
Therefore, you shouldn’t use a trading bot for of its alleged lack of emotions. And if you’re not a proficient trader with specific needs that the bot needs to fulfill, and you’d rather avoid numerous scams, you don’t need a trading bot either.