The cryptocurrency market is one of the most innovative financial instruments available for investors, with plenty of remarkable technologies that not only make trading easier and more accessible, but also more efficient. Artificial intelligence (AI) is one such technology, introducing automated trading and predictions about the market, based on real data and mathematical formulas.
How to begin trading using an AI-boosted trader? Follow this short guide to find out.
What are crypto trading bots?
Crypto AI is a specialized type of software, designed to automatically buy and sell cryptocurrencies whenever profitable. While the underlying idea might be simple, the actual process of doing so is far from such. The goal of crypto trading bots is making cryptocurrency trading simple and accessible, while also providing a lower-risk alternative to manual trading.
While humans are prone to making mistakes at their predictions or acting based on emotions rather than logic, machines are not. When programmed with a specific algorithm that takes input data, analyzes it, and makes decisions based on the results, there is no possibility of the AI making haphazard trades. This makes trading with AI-based platforms more consistent and less risky than traditional trading, as crypto bots work 24/7 with no downtime, always at maximum efficiency and monitoring the market situation non-stop.
Can AI be better at trading than humans?
Not only do AI trading bots not require sleeping or eating, but they also operate much faster than any human would be capable of. Performing a trade manually can take up to a couple of minutes, and that’s just the transaction itself – there is tons of research that builds up to each investment decision, as well as risk assessment. Robots can do all of that in a fraction of that time, and won’t make any mistakes while doing so.
While people are often driven by emotions, all AI software looks at is statistics. They’ll always choose the option that’s more likely to be profitable, without personal preference or bias. Advanced algorithms can process massive amounts of data each second, analyzing tons of data to make their investment decisions logical and founded on mathematical probability.
What to look for in an AI-based crypto trading platform?
Crypto AI platforms are great for novice and experienced traders alike to boost their portfolio and trading performance – but how to find the right platform?
First of all, research the company that’s providing the service to you. Are they experienced in trading, or are simply a couple of programmers who bundled together to create an app using open-source algorithms, with no real knowledge of the crypto market?
Another important factor to consider are the fees – you’re very unlikely to find a quality crypto trading bot for free. However, even the most advanced AI in the world won’t make you much profit if you end up spending all you earn on the platform fees. Always weigh the benefits against the downsides and see how well a given move fits with your long-term investment strategy.
