Cryptocurrency trading bot - advantages, disadvantages, examples

Bot for Bitcoin Trading is an automated trading system that opens and closes transactions independently according to the algorithm embedded in it. Trading robots facilitate routine trading processes, save the trader's time and respond faster to changes in the market situation. What are the advantages and disadvantages of trading with trading robots? How and for what purpose are bots used to trade on the cryptocurrency exchange?

There are two types of trading bots. Ordinary robots work according to a certain pattern. They enter the market if the conditions laid down by the creator are met. Arbitrage bots are designed to operate on multiple exchanges. They buy cryptocurrency on the site where it is cheaper and sell it where its price is higher. The difference in price minus commissions is the trader's profit.

The pitfalls of trading with automated trading systems

A trading algorithm capable of flawlessly performing the work of a trader on a fully automatic basis has not yet been created. Bots have both advantages and disadvantages. Knowing about both, it is possible to predict and guide the operation of an automated trading system in the cryptocurrency market.

Immediately about the pros

Unlike a trader who has emotions, the trading algorithm trades strictly according to the rules. He will not open a trade if there is no signal. It will not enter the market by intuition and will not close the order ahead of time for fear of losing what is already there.

A cryptocurrency trading bot responds faster to a volatile market. Since the virtual money rate is subject to high  volatility , a trader may be late to enter and open a buy position at the top of the movement or sell at the bottom of the trend. The robot will do everything on time.

Trading robots are not wrong. If the trading strategy involves certain calculations, the algorithm will cope with the task faster and more accurately. A trader can make a mistake, robots do not make mistakes.

Now about the cons

There is no universal bot for automated trading, which does nothing but earn profit for its owner on autopilot. Any algorithm is imperfect, therefore it needs control and testing. Do not expect that after installing the bot, money will flow to you on its own.

The bot cannot analyze the market. He trades strictly according to a mathematical algorithm. This point can be both an advantage and a disadvantage. The cryptocurrency market reacts to news, rumors, expert opinions. A trading robot does not take these factors into account. Automatic trading is tailored to the standard. The market is too volatile. It cannot always be judged by templates.

What you need to know when using bots for cryptocurrency trading

A cryptocurrency trading bot is a third-party program, so you need to be aware of the dangers that lie in wait for a trader when using it.

There are many cases on the Web when bots transfer profits from owners' accounts to accounts on third-party accounts. This can be either a one-time situation or a transfer of a small part of the profit on a regular basis. There are also trading robots that collect personal information about users and pass it on to third parties. The reliability of the bot can be judged by the reviews, but only the creator can guarantee it.

You always need to keep an eye on the work. The cryptocurrency exchange charges a commission for each transaction. If the bot malfunctions, instead of the expected profit, the trader may receive a loss in the amount of the commission.

Moon Bot platform-bot for trading digital coins

The Moon Bot terminal is not just a trading robot for trading on the cryptocurrency exchange. This is a full-fledged trading and analytical platform with which you can open and close deals on exchanges, set conditions for entering the market, participate in pumps, etc.

The bot interface looks like this. You can download the program for Windows on the official website of the developer.

The program operates on two cryptocurrency exchanges - Bittrex and Binance. Altcoins paired with Bitcoin (in the free version) are available for trading through the terminal. For users of the Pro version, there is also the opportunity to trade altcoins paired with an asset USDT. Let's consider the main features of the platform in more detail.

Initially, the Moon Bot cryptocurrency trading bot was created to participate in pumps - the massive purchase of coins by a large number of traders on a signal. The goal of this action is to make quick money. The more purchases traders make, the faster the price of the cryptocurrency grows. With the help of a pump (artificial buying), participants manipulate the course and earn "quick" money in a few minutes.

The bot can read messages from Telegram channels. You just need to configure them, as the program will independently analyze tokens and place buy or sell orders. The robot is able to analyze the market situation. He can independently decide whether it is worth participating in the pump, or the price has increased significantly before it starts, which makes it risky to enter the market. The platform works according to a complex algorithm, which, based on the analysis of several factors, determines the risk of entering positions.

The Moon Bot cryptocurrency trading bot has functions that are familiar to traders who work in the Forex market with the MetaT Raider 4 platform ... In the Moon bot program, you can set a trailing stop, stop loss, set pending orders to buy or sell cryptocurrency. With the help of the platform functionality can be traded on the  page Amer breakdown  of important support or resistance levels.

The trading robot has good tools for market analysis. Using various algorithms, it identifies currency pairs with a price situation typical for the beginning of a pump. This happens both in manual and fully automatic mode. However, the  program does not know the fundamental and  technical analysis .

Despite the versatility of the Moon Bot robot, the creators argue that it is not designed for fully automatic trading in the cryptocurrency market. He can play the role of an assistant, but the main role in making decisions about entering the market still remains with the trader.