6 Pros and Cons of Auto Trading Robots in Cryptocurrency Trading

The activities on numerous crypto markets are active at all times. As you can presume, there’s absolutely no way for you to be active 24/7. Sure, every person needs eight hours of quality sleep in order to function properly. Why is it important to be as active as you can? Well, since we are talking about never-ending activities, chances are that you will miss something that can provide you with a chance to earn some healthy profit.

Sure, following certain trends will provide you with a chance to do something beneficial, but who knows how many of these opportunities you have missed down the road. While it makes perfect sense that you cannot do everything by yourself, there’s a way for you to make the most out of these changes. We are talking about using auto trading bots who will be able to make the most of these opportunities for you.

In case you would like to learn more about auto trading bots, be sure to do research on your own. Here you can take a look at the recently done paper about their effectiveness and why you should use one of these. You should consider it as a first step towards having complete knowledge about this concept. Now we would like to present you with a couple of pros and cons of using these in your crypto trading. Let’s take a look at those.

Source: Learn 2 Trade


Firstly, let’s take a look at the pros of this approach.

1. No Sleep

Different from conventional exchanges, auto trading robots don’t need any kind of rest, not on holidays, not on weekends. Simply said, they never sleep. In fact, they are monitoring the price of cryptos and all other movements on the market. The trader inserts all sorts of commands which are triggered by certain occurrences at the market.

That way, you will be able to take action whenever you feel like it. Instead of not having a good night’s sleep, your auto trading robot will be able to take care of all your needs, mainly in terms of taking action when needed, which amounts to not wasting opportunities placed in front of you.

Source: bitcoinjesus.net

2. Fast Execution

Since they are programmed to take immediate action whenever they are triggered by some occurrence, you can be absolutely sure that they will have fast execution. The moment the position is secure, orders are carried out immediately. When we say this, we both mean profit targets and protection from potential loss.

What many people don’t understand that these fast-paced decisions are a serious advantage when compared to traders to people who don’t use them. In some cases, the pace of these decisions is the ultimate difference between coming up short or earning a healthy profit.

3. No Hesitation or Emotion

Human traders are prone to making an emotion-driven decision, which usually turns to bad results most of the time. The reason is, we are not always able to control our emotions in the best way possible. We mean, just think about how many times your emotions led you to make a bad decision. Without any doubt, this happened more times than you can count.

Different from human traders, auto trading robots don’t have any kind of emotion, and they will be able to make split-second decisions without any obstacles. At the same time, these robots don’t hesitate, which is surely a plus. They are acting based on your commands and there’s no chance of them performing some other actions.

Source: BeInCrypto


Now that we’ve taken a look at the pros, let’s take a look at the cons.

1. Over-Optimization

Even though it cannot be directly tied to automated trading systems, there a chance for over-optimization. When we say this, we mean that the trader can create a system that looks and sounds perfect on paper, but really, it will not be able to provide you with the best possible results. We are pretty sure that countless traders have made this kind of mistake.

At the same time, we can see that there are traders who think that using someone else’s technique will provide them with fruitful results. Sadly, we can see that this is not a good move. The strategy that provides exceptional results to someone will not necessarily work for others. Therefore, we don’t recommend anyone to try this approach out.

Source: Coinlist.me

2. Mechanical Failures

We are sure that the concept of auto trading robots sounds pretty simple. You’re just installing the software, insert all the commands, and let it do its magic. Reality check, it doesn’t work like this. Just think about that, it would be the easiest thing in the world, and everyone would do it. However, for someone to earn at the market, someone needs to lose, right?

In reality, we are talking about a much-sophisticated approach. Depending on the software you’ve chosen, the orders may be on the device, but not on the server. So, if there’s a sudden connection loss, the order will not be carried out by the software. Therefore, you will need to have a much better insight into all the things before you can make any decision.

3. Monitoring

We are sure that it would be perfect for any trader to turn off the device and go to sleep. Sadly, it needs to be said that these systems require some sort of monitoring. So, you will need to leave your device turned on. The reason being there’s a high chance of technology failures, like connection problems, PC crashes, or power loss.

Furthermore, this system can experience some anomalies like missing orders, errant orders, or executing double orders. In case you have a chance to monitor all these activities, you will be able to solve all these problems in the shortest amount of time possible.

Source: Bitcoin Warrior

The Bottom Line

We are absolutely sure that the world of cryptos can be pretty confusing to some people. Therefore, it wouldn’t hurt you to consult some help. So, you should take a look at auto trading robots and how they work. Surely, they can provide you with a lot of benefits down the road.