Cryptocurrency commercial robots: do investment are worth?
In recent years, cryptocurrency trading has recorded exponential growth, with the prices that rise to the stars and precipitate on the whim of the feeling of the market. The rise of decentralized exchanges (Dexs), platforms based on blockchain and automated trading robots has allowed people to participate in the cryptocurrency market without knowledge or traditional investment experiences. However, a question that remains unanswered is if it is worth investing these robots: can they make you money or will they leave you with significant losses?
What are cryptocurrency robots?
Cryptocurrency trading robots, also known as algorithmic traders, use mathematical programming languages to analyze and perform operations based on default rules. These programs can be adapted to various market conditions, types of activities and strategies, making them highly customizable for individual investors or institutional traders.
types of robots:
There are different types of cryptocurrency robots, each with their own strengths and weaknesses:
- BOT of technical analysis (TA) : these robots use technical indicators such as graphs, trends and models to predict price movements.
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- Robot based on strategy : these robots follow predefined strategies, such as the medium tendency or reversion, to make operations based on predefined rules.
- Robot based on events : these robots react to specific events, such as press releases or economic announcements, which can affect market prices.
pro of cryptocurrency trading robots:
- Efficient trading:
robots can perform operations quickly and with a minimum human intervention, making them suitable for committed traders.
- Risk management: Many robots use risk management techniques to limit losses and protect capital.
- Scalability: robots can develop large volumes of data in real time, allowing traders to react quickly to market changes.
- Diversification:
Using more robots with different strategies, investors can reduce dependence on any individual bot or strategy.
Cons of cryptocurrency trading robots:
- High risk: While robots can perform operations quickly, they also require a significant amount of capital and may not have always happened.
- Dependence on the quality of the data: robots are as good as the data on which they are based, which can be subject to errors or prejudices.
- Competition: The cryptocurrency market is highly competitive, with many robots that compete for the attention of the market.
- Lack of transparency: Some robots may not provide clear explanations for their trading decisions, making it difficult for investors to understand their strategy.
Cryptocurrency commercial robots really work?
While some traders have reported impressive success with cryptocurrency robots, there are also many examples of losses and failures. A 2018 study published in the Journal of Financial Markets found that:
- 64% of cryptocurrency trading bots have undergone significant losses.
- Only 12% reported profits.
Conclusion:
Cryptocurrency trading robots can be a practicable investment option for those who have experience and knowledge, but are not suitable for beginners or those who have no capital. While some traders have achieved impressive results, most investors will probably suffer significant losses.
To be successful in cryptocurrency trading, it is essential:
- Educating yourself: Understanding the bases of the cryptocurrency markets, including trends, patterns and strategies.
- Choose a respectable bot: Select a well -consolidated and reliable bot supplier that offers clear explanations for their strategy and risk management techniques.
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