There’s A Bot For That: How AI Is Changing Crypto Trading

Crypto has become incredibly popular in recent years, generating consistent returns for investors and traders. However, investing in cryptocurrencies is not an easy undertaking. Navigating the crypto market takes skill and know-how. Unlike conventional financial markets, which are open only during certain hours, crypto markets are always open; traders need to constantly monitor charts to avoid missing out on an opportunity to make a lucrative trade.

Trading on Autopilot?

Fortunately, there is tech available that can help both new and experienced traders understand what’s happening–automated trading solutions with AI engines. These are more commonly known as “crypto trading bots.”

By leveraging AI, computers adapt their strategies depending on market conditions without needing anyone’s input–which means more profit for less work.

An AI trading bot can aggregate historical data about a cryptocurrency, like its daily price over the course of a year or throughout the entire coin’s existence. The AI then analyzes that information and uses it to make predictions on future trends so it can make successful trades. When configured correctly, an AI trading bot provides investors with tools that bring them bigger and quicker wins.

Risk vs. Reward

Bots come with inherent risks–mainly that they rely heavily on past performance trends, meaning that new market conditions might lead to losses. Additionally, trading bots typically charge fees and require certain software and hardware. To use the bot, you need API (Application Program Interface) keys to connect to crypto exchanges and gather information for executing buy or sell orders.

For instance, if I wanted to set up my KuCoin account with a compatible trading bot, I would need the KuCoin API key, and I’d have to set up an account on the exchange and fund the account enough to begin trading. A successful trading bot has to be carefully configured before deciding which coin pairs to trade.

More AI Advantages

Trading bots also have added advantages such as FOMO-free investment decisions. Many novice traders lose their investment capital because of bad decisions caused by emotional states, but trading bots can eliminate emotional responses when making trades. Bots will not be swayed by emotions and won’t open or close positions based on sudden market swings; they’re ideal for investors who want to adhere to a specific trading method and have the discipline to learn how to configure and operate the bot effectively.

The continuous adoption of new technology has already changed the cryptocurrency industry. Five years ago, for example, a hands-off HODL strategy was king. However, automation is quickly taking over every aspect of trading, and it will not be going away anytime soon.

So the question then becomes: should investors maintain control of their own trading? Or should they submit to the inevitable “rise of the machines” and rely on AI trading bots instead?

Leave a Reply

Your email address will not be published.

Related Articles
Read More

10 Things To Avoid When Trading Crypto

The sad thing is that not everyone is lucky enough as most people end up learning their lesson the hard way. It is very common that you perform a trade and lose all your money. Trading in cryptocurrencies is very unpredictable. Unless you are very...
Read More

Bitcoin Trading Strategies

WD GannBorn on 6 June 1878, WD Gann was considered one of the greatest stock and commodity traders of his generation. Gann devoted the majority of his professional career to the study of technical analysis, including chart formations, astronomy, astrology, geometric patterns and mathematical formulas....
Read More

The Crypto Crash – Finding Order In Chaos

The crypto markets have tanked. A retrace was inevitable. Now what? Many of our investments are down 90% over the last six months, perhaps even the last six days. Maybe this is your first bear market, but it won’t be your last. That knot we...
Total
0
Share