by John Smith 
Bitcoin bots and automated crypto trading are attracting more and more traders, pros and beginners, as well as a public attracted by the crypto industry.
The word automatic indicates the primary purpose of automated crypto trading, to get rid of manual work that will be done by crypto bots which will execute buy and sell orders programmed in the trader’s trading strategies.
A Binance trading bot can indeed save you a lot of time and do the trading for you, less stress for a better efficiency.
A trading robot therefore works in place of the trader, delegating its trading work to a crypto bot seems the ideal solution so that you no longer have to stay monitoring the markets and the price of Bitcoin or cryptocurrencies that work 24 24/7 worldwide!
On the financial markets today, 80% of trading would be done by robot traders!
If we are going to see that there are many advantages to use Bitcoin robots and crypto trading bots, there are of course disadvantages to take into account if you plan to do automated cryptocurrency trading.
What is a Bitcoin robot or crypto bot?
We can assimilate a Bitcoin robot or a crypto trading robot to an automatic trading software which can be configured to carry out buy or sell orders automatically.
Today’s technology combined with artificial intelligence (AI) is advancing rapidly and provides increasingly powerful crypto bots with impressive market analysis capabilities.
For example, the automated crypto trading platform Kryll has integrated artificial intelligence from Daneel.io, read our article on this subject.
There are different types of crypto bots and Bitcoin robots on the market, with more or less complex trading robots that will target professional traders rather than beginners.
And automated crypto trading platforms suitable for professional traders as well as novice traders on which they will be able to train and perfect themselves in crypto trading thanks to learning with these crypto bots precisely.
See our ranking of the best Bitcoin and crypto trading bots 2020: click here.
These trading robots allow automated trading of Bitcoin but also of other cryptocurrencies available on crypto exchanges, 24/24, 7/7.
How does a crypto bot work?
There are crypto trading robots that only work on the trader’s computer who needs to download the automatic trading software.
These Bitcoin crypto bots and robots will therefore require certain computer skills in order to do automated trading with these crypto trading bots.
New modern automated crypto trading platforms like Kryll or 3commas host crypto bots on the cloud, you don’t have to install anything, everything is managed on the automated crypto trading platform.
In order to place buy and sell orders, crypto bots will be connected to your account on Binance or any other crypto exchange via an API key.
Thus, Bitcoin robots and crypto bots can replace you when you are not at your computer and execute the orders programmed in your trading strategies.
The latest generation crypto trading platforms offer drag and drop graphical interfaces which make it easy to create trading strategies using the indicators and trading tools made available by these platforms.
(Arbitrage, Market making, smart trading, stop loss, take profit, Ichimoku, automatic trade, Bollinger, Macd, RSI, CandleStick blocks and Candlestick Patterns,…)
24/7, trading robots execute the orders that you have programmed in your trading strategies or those that you have rented from other traders on the marketplaces of certain platforms. (Copy trading or social trading)
Depending on your level of trading skill, you will need to test the different crypto bots in order to see which automated crypto trading platform is best for you.
Let’s see the pros and cons of using a Bitcoin robot or a crypto bot for automated cryptocurrency trading.
Benefits of Automated Crypto Trading and Bitcoin Bots
Having a trading robot that works for you 24/7 is clearly the first big advantage of a crypto bot.
1. The trading robot never sleeps
Crypto exchanges operate permanently unlike conventional exchanges which stop on weekends, the trading robot never sleeps.
It monitors the price of Bitcoin and other cryptocurrencies for which it is expected to place buy or sell orders instead of the trader.
This allows you to avoid having to be constantly watching prices, and let you do something else or just sleep when some traders sometimes stay up late while waiting to place a buy or sell order.
If you sleep and the price of a cryptocurrency moves, the crypto bot will react and execute the orders that you have programmed in your trading strategy.
2. Speed of execution of orders
Since computers respond immediately to changing market conditions, trading robots are able to generate orders as soon as market criteria are confirmed.
As soon as a position is entered, orders are generated automatically, including protective stop loss and profit targets.
The advantage of automatic cryptocurrency trading is therefore a higher speed of reaction and execution of buy or sell orders programmed in trading strategies.
3. No emotion or hesitation
The trader is human and subject to emotions when he is in front of a screen facing a stock price which can have strong fluctuations especially in the cryptocurrency sector.
The robot has no feeling or emotion and will automatically execute the programmed orders if the market rules have been followed.
Unlike the man who may hesitate or question a buy or sell order due to the stress of the situation, the crypto bot therefore eliminates emotions in the trading process.
This translates into less stress and anxiety for the trader and therefore greater peace of mind by delegating trading to crypto bots.
It is therefore a health benefit by avoiding stress which can be intense in trading.
4. A Crypto bot preserves discipline
Since trading rules are established and programmed, and transaction execution is done automatically, discipline is preserved even in these volatile markets.
5. Possibility of backtesting trading strategies
Backtesting applies trading rules to historical market data to determine the viability of the trading strategy.
Thorough backtesting allows you to evaluate and refine a trading strategy, and to determine the results of the system, ie the average amount that a trader can hope to gain (or lose) per unit of risk.
In addition, these backtests are free and unlimited on automated crypto trading platforms like Kryll.
The trader can therefore test his trading strategies in an unlimited way in order to refine the programming of his strategies before going into real mode on the markets!
6. Learn crypto trading with crypto bots
A novice trader can learn and train for free in crypto trading using the crypto bots and Bitcoin robots of these automated crypto trading platforms.
Thanks to the backtesting technique, the novice trader can make backtests of crypto trading strategies by taking advantage of the market history and the evolution of the prices of Bitcoin and other cryptocurrencies in order to see if his strategies are efficient and well set.
Strategy tests which are free and unlimited on certain automated crypto trading platforms as indicated above.
A beginner trader will also benefit from the technical support of these platforms and tutorial guides made available to users of these crypto trading bots.
7. Copy trading / social trading
Another advantage of crypto bots is that you can use the copy trading or social trading function if it is available on the automatic crypto trading platform you are using.
For people without trading skills, this is the possibility to copy strategies of professional traders to their crypto account and benefit from the know-how of these professional traders.
Many people new to trading use crypto bots only with the function of copy trading.
Crypto bots will carry out the same buy and sell orders in real time as those made on the account of professional traders who rent their strategies.
Copy trading also allows novice traders to learn by observing the functioning of trading strategies of experienced traders.
It is also simply a practical function for professional or novice traders who do not have time to create their own trading strategies and then prefer to rent the trading strategies of other traders.
Some crypto bots platforms offer copy trading like Kryll, 3commas or Cryptohopper for example.
Disadvantages of automated crypto trading
1. Need to have knowledge in trading and technical analysis
Bitcoin and automated cryptocurrency trading is akin to traditional trading in other markets, if there is an automated aspect to executing orders, in order to build and create an effective crypto trading strategy, you need to have trading skills and knowledge.
In addition, some Bitcoin robots and crypto bots require computer and programming skills in order to install and configure these trading robots.
Doing automatic cryptocurrency trading with a trading bot is not going to be for everyone.
Fortunately, the latest generation automated crypto trading platforms such as kryll, 3commas or Cryptohopper offer easy-to-use visual interfaces to create trading strategies with the drag and drop technique.
These platforms host trading services and crypto bots in the cloud, so there is no software to install or configure on your computer.
2. The trading robot is a machine that needs to be checked
A crypto bot performs what it was programmed to do but does not do any analysis or verification on its own.
The trader must therefore ensure the proper functioning of the trading bot in the execution of trading strategies and ensure that there are no bugs or technical problems in the proper functioning of the crypto bot.
Hence the usefulness of the backtesting mentioned above in the advantages of a crypto trading bot, a technique which makes it possible to test the work of trading robots in the execution of orders programmed in the trading strategies of the trader.
Regularly, it is therefore necessary to test and monitor these trading robots of which you do not master technical maintenance or IT development, a technical problem may arise.
3. Costs of using crypto bots
Each Bitcoin or crypto bot robot has its operating and billing mode as indicated in our ranking of the best crypto bots and Bitcoin robots 2020. (Kryll, 3commas, Cryptohopper, Haasbot, …)
It is therefore advisable to ensure the operating cost of these trading robots which are either by subscription, the amount of which varies according to the options used on these platforms, or a pay-per-use as on the Kryll platform.
Delegating trading to crypto bots providers has a cost that can be calculated based on the results obtained from using trading robots.
4. Many trading robots are only in English
Internationally focused, many crypto bots and automated crypto trading platforms are often in English only.
This therefore requires sufficient knowledge of the English language in order to be comfortable in using these trading robots if English is not you native language.
Some automated crypto trading platform like Kryll, 3commas offer foreign languages on their platform and you can therefore use their crypto bots in your own native language such as spanish, portuguese, french, russian, …
5. Watch out for free crypto trading bots scams
If some automated crypto trading platforms are recognized for their reliability and the quality of their trading robots like those indicated in our ranking of the best crypto bots.
There are unfortunately free crypto trading bot scams where cybercriminals offer Bitcoin robots or free crypto bots which are in fact only software intended to hack your computer or to have access to your private API keys giving access to your Bitcoins and cryptocurrencies on crypto exchanges.
You must therefore ensure the reliability of the provider of a crypto bot and not be tempted by a free trading robot that promises guaranteed exceptional results.
Quality service and qualified technical support come at a price, it is better to pay a reasonable price in order to obtain efficient and secure crypto trading bots.
Conclusion
So there you have the pros and cons of automated trading for Bitcoin and crypto currencies.
Automated crypto trading and crypto bots offer many significant advantages.
Using these crypto bots has been made even easier thanks to new crypto trading platforms which greatly facilitate the creation of strategies and the use of their trading robots.
You just have to try different crypto trading bots to see which one is best for you based on your trader profile.
