A cryptocurrency robot is a tool also known as an expert advisor. It is a piece of software that tries to automate what traders do in a manual ecosystem. For example, a cryptocurrency bot can be built using technical indicators such as moving averages and MACD. It can also be created using fundamental data such as chain movements and economic data.
How does a cryptocurrency robot work?
A cryptocurrency robot can help you automate your trading. Some bots help traders by scanning the market and then sending signals to the trader via email or desktop notification. The trader can then do more research on these signals and then execute the trades. As a result, these bots help simplify the trading process and then reduce the overall risks associated with using robots.
The other types of robots are automated. These are bots that scan the market for opportunities and then execute orders. They will initiate the order based on what the developer has programmed them. This means that they can only focus on the specified coins. They can also protect the orders with a stop loss and a take profit.
You can also test them yourself, for example it is very easy get started with immediate profit and try the platform to see if it works for you.
How to build a cryptocurrency robot
Developing a crypto robot is not easy. First, if you’re coding the bot from scratch, you’ll need to have some experience in software development. Depending on the trading software you use, it is also important to know the specific language. For example, the MetaTrader 4 and 5 trading robots are designed using a language known as: MQL 4 or 5.
Today, there are several free and premium websites that allow you to build a robot using the simple drag and drop process. These platforms make it easy for those with no coding experience to build quality bots.
Another thing is that you should have a good trading experience as you will basically digitize your manual approaches. Some of the best strategies you could use are scalping, trend tracking, grid strategy and reversals.
How to buy a cryptocurrency robot
Since building a bot is difficult, most people choose to buy a cryptocurrency bot. There are two main approaches to this. For example, you can use one of the most popular marketplaces to buy your robots. MT4 and MT5 developers have intuitive marketplaces with thousands of bots for you to buy. In most cases, this approach is usually better because it is safe and you can see real reviews.
The next option is where you find a robot developer and then buy the bot directly from them. This is the approach Immediate Profit uses. While this model works, it is very common for you to fall prey to online scammers.
The cost of a trading robot varies. Some, like Immediate Edge, are offered for free, while others cost thousands of dollars per month. Immediate Edge is free, but the developers make money by referring you to their specific broker.
Testing the robot
Because of the volatility of the cryptocurrencies market, it is important for you to properly test the robot. This applies to one that you have built yourself or one that you have purchased.
Many charting platforms such as MT5, NinjaTrader and TradingView have a feature known as a strategy tester that simplifies this process. You just need to enter the robot and select the dataset you want to analyze.
Ideally, while testing the strategy is easy, you should spend a lot of time on it. In most cases, you should spend at least a month testing the bot’s performance. This is why you should buy a bot that gives you a free trial.
If the bot works well, you should start with a small amount and top it up as your account grows.
There are several benefits of using a cryptocurrency robot. This way the bot that does the analysis and sends you an alert can save you a lot of time. It will also help you identify more trading opportunities. Moreover, as a human being you can only analyze a few assets in a day.
Second, a robot works harder than a human. Since the crypto market is open every day, the bot can operate from Sunday to Sunday. It can execute as many trades as possible because bots don’t sleep. Furthermore, the bot can set a take profit and a stop loss in a better way, unlike a human trader.
On the other hand, the risk of a robot is that it can misjudge the data and in most cases does not contain fundamental views.