7 Myths About Crypto Bot

What We Have Covered in This Article

Last Updated on December 20, 2022 by Editor Futurescope

Crypto trading bots are a lifesaver for most investors. However, some people still fear using bots due to the many myths about crypto bots that spread around. Truth is, bots are more efficient than humans and aren’t prone to emotional decision-making. 

We want to help you trade without fear. Let’s unearth the 7 myths about crypto bots. 

Myth #1 A trading robot can never trade as successfully as a human because it does not “feel” the market

Trading robots are successful despite the fact they can’t “feel” the market. However, the success of a crypto bot largely depends on the volatility of the market and the strategies programmed within the bots. 

Since trading bots don’t have any emotions, they tend to make logical trading decisions. Humans, on the other hand, are so emotive that they will lose a trade due to fear of making a transaction. 

Myth #2 Many trading strategies are impossible to algorithmize

Let’s face it, technology has advanced and it’s possible to create almost any algorithm. The reality is that for you to create a profitable trading bot, it takes time, dedication, resources, and of course knowledge. 

As a trader, take your time to look for a crypto bot with a proven track of success through a series of backtesting and proper maintenance. 

Myth #3 Any robot will eventually lose all money

Some trading robots will lead to losses but not all because a crypto bot is only as good as the strategy it implements. Since crypto bots aren’t 100 percent automated, you still need to make suggestions. If you don’t choose the right moves, you may end up making losses. 

Other reasons you may lose money is if there are technical errors with the bot or server downtimes. If you want to make money as a crypto trader, it’s important to understand how bots work, and how you can manipulate them to your advantage. 

But still, you can’t always be assured of profits. Even the best traders at times suffer losses. For example, Warren Buffet made losses in the 2008 crisis. 

Myth #4 A profitable robot will never be sold

You may have heard people say that a profitable robot will never be sold. Well, don’t buy into this lie because it will make you doubt any robot that’s selling in the market. There are many developers who dedicate their time to creating functional bots, backtesting them, and ensuring that they are secure to use. 

As a trader, it is upon you to do your due diligence so that you are able to sift the chaff from the wheat because there are also many scammy bots getting sold. Start by looking for genuine reviews from people who have used a certain bot. Also, test it before you commit to a full purchase. 

Myth #5 Any robot can lose the whole deposit in a couple of seconds for no apparent reason

Losses do happen, but they just don’t happen for no apparent reason. As mentioned earlier, a crypto bot is only as good as the strategies you implement and the market conditions. 

Choose the right strategies for your bot. If you aren’t sure about the bot, start by testing the waters using a small amount of your investment. 

Myth #6 Every robot should be modified and optimized weekly/monthly/yearly

Theoretically, a trading robot should work in auto mode. In reality, it’s risky to let your bot run without maintenance. Before committing to using a bot for your trades, ensure that the bot is well-modified and backtested. 

We optimize and perform backtests using historical data. Tests should start from your demo account. Manipulate the bot using data from previous years. Remain cognizant of the fact that market conditions are volatile. Whatever algorithms your bot is using could change, rendering your bot useless. 

For this reason, you need to optimize your bot regularly. As a rule of thumb, compare the data results from your demo account versus your real account. When using the same data set, there should be a similarity in results. If not, then it’s time to modify and optimize your bot so that it adapts to changes in the market. 

Myth #7 Paid trading robots are not better than free ones

Paid trading robots aren’t better than free ones. This is because there are many paid trading bots that don’t function as advertised. In fact, most sellers will hype a bot, and place fake reviews to lure traders into buying only for them to get frustrated. Still, there are many genuine paid trading robots, such as BitQS

On the other hand, not all free bots are worth your time. Most free bots are unmaintained and could even have loopholes for hackers. This is not to scare you because there are many traders who have reaped heavily from using free crypto bots. 

Since you can never be sure whether to use a free or paid crypto bot, you need to do proper research and read crypto reviews. It’s always advisable to spend time on the demo account testing out different results before creating a real account. Also, remember to invest small until you’re sure that it will be a profitable venture in the long term. 

Bottomline 

Automated trading is better than manual trading because it eliminates tedious yet monotonous work. There are many myths about trading robots that make people fear using them. With a proper understanding of how crypto bots work, you will use them correctly to earn profits. 

Editor Futurescope
Editor Futurescope

Founding writer of Futurescope. Nascent futures, foresight, future emerging technology, high-tech and amazing visions of the future change our world. The Future is closer than you think!

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