A beginner’s guide to the world of trading bots

Markets of cryptocurrencies are famous for being volatile. Such volatility can make you confused or even unable to decide. Every second matters in crypto markets. Each second could come with profits, a chance for dodging risks. If you have been in the crypto investing market, you must have heard about Uniswap sniper bot and other fellow bots. So, what exactly are they? And how they could help your investment?

–          Definition of trading bots

Trading bots of cryptocurrencies are smart applications or computer programs that take care of crypto transactions. They are built to trade in different virtual currencies. These apps tend to act on behalf of investors automatically to purchase or sell when it is the right time. They are designed to make profits through proper investment choices at the right time.

–          Human trading consultants vs. trading bots

There is no doubt that humans are behind trading bots. Yet humans are not able to perform the same functions that bots do. Trading bots offer the following features:

1-       All day operating:

No human can work continuously all day and all night for seven days without resting. This is something bots can do efficiently.

2-      Rational decisions  

Another primary difference between humans and bots when it comes to decision making. Humans usually make decisions based on their feelings such as fear. Trading bots don’t function this way. They are completely free from feeling and depend on facts, data and numbers to make any transaction.

Another important advantage of emotionless operation is that it can build consistency over the long run. Consistent performance is a necessity for profitable trading. Human calculations can’t always keep such consistency because a human investor can sell everything in their account out of fear. Also humans can hesitate in seizing good and profitable opportunities and might let them just go.  Bots are equipped to act consistently.

3-      Superior performance

In addition to working continuously, trading bots can handle enormous amounts of data in each second. It might take a human consultant days to read, understand and to figure out what to do with such amounts. Another important factor related to performance is speed. Trading bots are way faster than humans when it comes to considering or taking actions. Both of these properties are critical in making profitable transactions.

–          Things that make a really good bot

With many crypto trading bots out there, you might feel a bit confused especially if you are new to this world. But there are specific qualities that could make some bots stand out from the crowd. These features include:

1-      Reputation of developers:

You should know which company stands behind your potential bot. You should investigate their reputation and credibility. After all, the bot will have access to your trading account.

2-       Compatibility with platforms

Not all trading bots perform equivalently on different exchange platforms. Some of them would excel on certain platforms, while being really average on other platforms. So, you should check the compatibility factor in case you need to operate multiple bots.

3-      Flexibility

You can’t trust a one-size-fits-all kind of bots. You need to be able to perform some adjustments and modifications to create your trading strategy. And the chosen app should be flexible enough to offer this.

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