The best free crypto trading bot is actually a computer program that is automatically buying and selling different cryptocurrencies at just the right time to generate profits. And it is literally its job. With this in mind, you have to take into consideration that not all bots can yield profits.
Of course, in a perfect world, bots would generate profits and that profit is higher in risk-adjusted term than buying the same coin and hold on to it for quite some time. On the term “risk-adjusted”, it actually means that you are having positive gains that are relative to negative gains you have suffered while having better investment. To have a better idea about this, you may want to consider the following:
Between the two scenarios, which you’d prefer to have?
- A daily return with 1 percent every day and has no negative day accumulating a total of 250 percent return in a year or;
- Enjoying 10 percent returns on Monday, 3 percent on Tuesday, negative 5 percent on Wednesday and so forth with the total return of 500 percent in a given year.
Well the main point is, given that you have consistent returns and experiencing a bumpy ride, you must always pick the one that provides you with consistency.
High Returns would never be enough, You’ve got to be bold
This is what making crypto trading bots stand out. If we could find a way of capturing the most upside in digital currencies without getting gut-punches, it will make it an even more attractive option than what hodlres offer.
Trading with Crypto Bots
There are basically three moving parts of trading bots and these are the signal generator, risk allocation and execution. You’ll learn each of them in the next lines.
- Signal Generator – this is where all the predictions happen. There are some data that will go into signal generator and then, a buy or sell signal will pop up. Say that you’ve seen bots using technical indicators, then it is a great idea to slowly back away.
- Risk Allocation – this is taking the signal and decide on the amount to buy. This is taking the intricate decision whether to buy or trade only a portion or buy everything in one go.
- Execution – if you have much to buy in bulk like 10 million, then you certainly do not want to do everything in a single trade. You might want to bounce back and forth in your order.