Leveraging on A.I. in cryptotrading

Having to constantly monitor charts and knowledge of technical analysis is one of the essential tools needed to engage in "active" cryptotrading. The absence of these two could result in one's portfolio getting rekt when there's a shake up in the market. The hard truth is that actively trading in cryptocurrency just like many other endeavours in life isn't meant for everyone. It takes a great deal of grit to remain calm while everyone else is panicking especially when the candles turn red.

However advances in artificial intelligence have provided a way out for those who do not have the time to constantly monitor charts and are neither they proficient in technical analysis. There are now several trading bots available in the crypto space which offer services to meet the needs of the various classes of individuals interested in trading.

There are bots that satisfy the needs of those who have some knowledge of technical analysis but do not have the time to constantly monitor prices or charts. For this class of traders all they need to do is to select their desired token for trading, set up the take profit margin or ratio as well as the targets points for buying and the bot does the rest.

For another group of would be traders who have neither the time to monitor trades nor knowledge of technical analysis, there are bots that offer the option of "copy trading' experienced traders such that the only thing the user needs to set up or established is the trading capital to be invested and wait patiently for the bot to execute the trades it copies on their behalf.

The aforementioned bot types follow the common and conventional trading model while there is yet another bot type that utilizes a not so conventional trading model. These are arbitrage bots. These bots take advantage of the price differences for tokens between exchanges or within an exchange among cryptocurrencies to make profitable trades. The price differentials between exchanges for tokens which these bots exploit could be due to factors such as trading volume.

It should be noted that although trading with arbitrage trading bots attracts lower risk, it also has little profit margin per trade except where a large amount is invested in a particular trade. Another reason why arbitrage trading is typified by lower risk is that less time is spent per trade when compared to the conventional trading models. However in order to make a substantial profit, several trades based on available arbitrage opportunities need to be executed within a short period of time. It should also be noted that losses can and do occur with arbitrage trading bots but not usually in the magnitude of the conventional spot or leveraged trading.

Trading wit bots in the conventional trading model is usually more profitable during a bull market or run. Such bots usually buy the dips during the bear market and sell based on the take profit margin set by the user, hence profit can still be made but clearly less than what is obtainable in a bull cycle.

Although A.I. continues to advance at amazing paces as seen with not trading, there's still that aspect of factoring in market sentiment in decision making during trading that still leaves more to be desired. For example if a bot is programmed to buy the dips for a particular token, it will continue to do so even if it that token is dipping so fast which a human trader would have most likely halted buying especially when there is lots of FUD and there is a high chance that the token may not recover for a long while. The bots do not have the capacity at least for now to include such information in their decision making process of buying low.

There are a number of trading bots out there such as Pionex, Coinrule,Royal Q, CALA which offer to take the burden of trading off the investor for a fee which could be paid at intervals depending on the makers of the bot such as monthly or yearly .

Have you ever used a bot for trading cryptocurrencies? What was the experience like and if you haven't tried bot trading previously would you be willing to do so in future?

Please feel free to air your views or opinions in the comments section.