One of the best things that has happened in the world of online trading in recent years is the coming of crypto bots. You can now trade with the help of these bots and enter and exit trades without all the manual work. They are easy to work with and more and more online brokers now have them available for you when you open a trading account. The prevalence shows that there is a promising future for crypto bots in this industry. Not to mention, as AI gets better with time, there will come a time when every human will have a bot only for the purpose of trading.
But what are these bots exactly and how do they make you money? And most importantly, how much money can you make when you use them for trading? Let’s find out in this complete review.
What Is a Crypto Bot?
The first thing that you have to understand is what a crypto bot really is. The word bot makes you think of a humanoid made of metal with a funny mechanical voice. However, that’s not what a trading bot looks like. It is simply a name given to a trading tool or software that can trade on your behalf without your involvement. The software has specific features that allow you to set certain parameters for your trading. Once you have set those parameters and filters, the bot starts trading on your behalf. It enters and exits trade automatically, all the time meeting the parameters you have set.
How Do You Sign up with a Crypto Bot?
There are many ways you can use a crypto trading bot to your advantage. You will find some online softwares that are designed specifically to be robots. You sign up on them and switch on the autopilot mode. As soon as you do that, the bot starts trading on your behalf. It is as simple as that. The software can come from anonymous people or from very well established online brokers who have been in business for many years. You are highly recommended to sign up with established brokers and use their bots because they are reliable and you have less chance of being scammed out of your money.
Of course, you can always read an online review on crypto trading bot to find the best one. There are many to choose from, but you are always recommended to go with an established one. In fact, you will notice that reliable and established brokers do not like to call it a bot. They just tell you that there is an automated trading feature on their trading platform that you can use to get rid of manual trading. So, you will find the switch on the trading platform and using it will allow your trades to be executed automatically.
How Much Money Can a Crypto Trading Bot Make?
As important as this question sounds, there is no specific answer to it. You have to realize that there are many different ways this question can be perceived. First, you can think of this question pointing at the amount of money the bot itself makes for its creators. Secondly, you can be referring to the profit it makes for traders that use it. For this particular review, we will take the latter approach i.e. looking at the amount of profit that a crypto trading bot can make for its user. However, despite taking this approach, you will not find a specific answer in numbers that would satisfy your curiosity of knowing how much a crypto trading bot makes.
So, let’s take a look at some factors that affect the amount of money or profit a crypto bot can make for you.
The Type of Trading Bot You Pick
First, a lot depends on the type of crypto trading bot you pick. As mentioned above, you can pick from trading bots that have been created by anonymous people or those which have been created by well-established online brokers. When you go with a reliable bot from a reliable broker, you will be making just as much money as the strength of your trading strategy. In other words, the bot will not be doing any magic for you. Despite the fact that the bot will be making trades on your behalf, it will not be doing anything on its own. You are the one who has to give it specific commands as to when you want to enter a trade and when you want to exit a trade.
It will follow your commands. It will always be calculating when the trading conditions meet your specified filters and execute a trade accordingly. On the other hand, you can even end up signing up on a scam trading bot. You will be shocked to know that there are dozens of these fake trading bots out there. While they do perform automated trading for you, which is their intended purpose, they come with some claims that are nothing but fake dreams you are being pushed into. They keep telling you that the bot will make you profits with more than 99% accuracy, which is nothing but a lie.
In this particular case, you will not see the bot making you any money at all. It is just a scam. You will be asked to deposit around $250 in your account before you can start using the automated trading feature of the bot. And once you have deposited the $250, you will see that the bot is nothing special. You could use the same feature on a trading platform from a traditional online broker.
The Size of Your Trades
If you define to your bot what type of trades you want to enter, it will enter those trades automatically for you, even when you are sleeping. In short, the best benefit of a crypto trading bot is that it can work while you sleep. Now, how much money the bot will make you depends on the size of the trades it enters. Of course, you are going to define how much money you want to put in a trade. If you enter big trades and your bot continues to make profitable trades, you will make handsome profits over the course of 24 hours – because the bot will be trading even when you are sleeping.
Your Loss and Profit Defining Strategy
If you have understood the basics of trading, you must have familiarized with stop loss and take-profit strategies. These are basic yet the most working strategies that any trader can use in the trading world. The best thing is that they do not require a lot of learning. They are easy to define even to a trading bot and can save you tons of money when you trade. The idea behind these strategies is to get out of the trade as soon as you have made a certain level of profit. You want to stop the bot from trading any further because doing so might reduce your profits apparently.
At the same time, you can define the maximum loss that you are ready to bear through the stop loss strategy. This strategy is used by even the most experienced traders because they can save a lot of money with it. If you do not define a particular loss limit, you could continue to lose money until there is nothing left in your trading account. You don’t want that to happen to you, especially when there is a bot that will be trading on your behalf. You don’t want to wake up the next day to find out that all the money in your trading account was exhausted by your trading bot while you were asleep.
So, how much money the bot makes you also depends on the strategy you are using. With take profit and stop loss strategies, you might not make a lot of money, but you will definitely be reducing your losses to a great extent, which is synonymous with making money in the trading world.
Beware of the Scams
While trading cryptocurrencies online, you have to be wary of the scams. There are many scams on the internet today that use cryptocurrencies and Bitcoin to their advantage. They use these trendy terms to get your attention and then pull you into a trap. You end up spending money on some software or automated trading tool that does not work as proposed. In many cases, you are told that you can be a millionaire in no time. In an attempt to get rich, people make mistakes that cost them a fortune. So, please stay back and do not move forward if an online tool is promising too much for trading cryptocurrencies.
Whether you use a crypto trading bot or choose to trade manually, you must keep your expectations within realistic boundaries. Even the richest traders and investors in the world have dedicated their lives to trading to be where they are. No one becomes a millionaire overnight. And if they do, the party does not last too long. Pick a safe crypto trading bot after proper research, keep your expectations realistic, learn how to trade, and trade patiently to be a truly professional and successful trader.