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What are crypto bots and how do they work?

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TL;DR

The profits that you make when trading cryptocurrencies largely depend on how fast you can react to the ongoing changes in the market. When you are manually analyzing the market, it might be a little hard to react quickly to the changes. 

To help you trade cryptocurrencies more efficiently, there are numerous trading bots available that you can use to analyze the changes in the market as well as trade cryptocurrencies automatically. 

Trading automation has come a long way, but how exactly does it work? Although crypto trading bots differ from one another, all of them have some things in common. The majority of the trading bots in the market are capable of analyzing market data, predicting risks, and open sell and buy orders for traders. 

While analyzing the market data, the bot is saving raw data from different, dependable sources and interprets it for trading purposes. By analyzing the market, it decides whether to buy or sell a specific asset. 

As a trader, you are able to use different types of settings. You can also control which type of data the bot should analyze. For calculating potential risks, the bot uses market data. Based on this information, robots are able to decide how much to invest in a certain asset. 

How to start crypto trading bots?

There are several steps that you will have to take to be able to use a crypto trading bot. In the majority of the cases, crypto trading bots are able to connect with your exchange using a special API key. 

This key should be provided by the exchange that you are using. Then, you will go to your bot, choose which exchange you are using, and provide the API key. Thanks to this key, the crypto trading bot is able to connect not only to your account but to the exchange as well. Thus, it is able to initiate trading for you. 

It is normal to have some concerns about sharing a special key with another company, but there are some ways you can protect yourself. First of all, almost all exchanges offer you the ability to halt withdrawals from your account, which can help you be sure that the trading bot won’t steal your money. 

Also, in the majority of the cases, these bots have access to only certain parts of your account. This mostly includes your account balance, trading history, and actual trading process. 

Using a crypto trading bot

One of the best ways to help you understand how crypto trading bots really work is a great idea to discuss a specific example. There are numerous crypto bots available in the market, and a huge majority of them are very similar in terms of the way they work. 

One of the leading crypto bots in the market, which is available with numerous exchanges is the Bitsgap trading bot. This bot connects to your exchange account thanks to the API key, as we have discussed above. 

Bitsgap offers automated trading bot for clients of over 25 leading crypto exchanges in the market, this includes Binance, Kraken, and many others. The trading bot is capable of doing everything for you. This includes market analysis, checking the risks, and initiating trading. Bitsgap crypto trading bot works 24/7. 

The first step to start using the Bitsgap trading bot is to register an account. After doing so, you should go to the account settings, where you can find a special page called “My Exchanges”‘. 

Here, you should click “Add New Exchange”, choose the exchange from the list, and put the API key from your exchange here. In addition, you should also provide a Secure Key. By doing so, you simply give Bitsgap access to your trading. The trading bot does not have access to your funds, and can’t withdraw funds. 

Should you use a trading bot?

Everything in the crypto trading market changes very fast and because there are so many things that traders have to consider, it sometimes gets a little hard to keep up with the developments in the market. It is simply impossible for a human to consider all the possibilities and do it in a short time. 

Timing in crypto trading is key, therefore, using a crypto trading bot that is capable of doing the hard job for you is very important. Also, for the best outcome, you can customize the trading bot according to your needs and preferences. 

Crypto trading bots come with numerous advantages that make using them a great choice. There are numerous things that make crypto bots a great choice for traders. They are known for being more efficient as well as powerful. In addition, they don’t feel emotions or greed, which can be a great advantage in a volatile and ever-changing market like crypto.

Although they might not be perfect, crypto trading bots can be a great help for traders, especially if you manage to program everything right. A trading bot is a perfect choice for you if you are someone who does not have a lot of time to analyze the market and follow the activities in crypto trading.

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Alden Baldwin

Journalist, Writer, Editor, Researcher, and Strategic Media Manager:With over 10 years of experience in the digital, print and public relations industries, he has been working with the mantra, Creativity, Quality and Punctuality. In his waning years promises to build a a self sustaining institute that provides free education. He is working towards funding his own startup.As a technical and language editor, he has worked with multiple top cryptocurrency publications such as DailyCoin, Inside Bitcoins, Urbanlink Magazine, Crypto Unit News and several others.He has edited over 50,000+ articles, journals, scripts, copies, sales campaign headlines, biographies, newsletters, cover letters, product descriptions, landing pages, business plans, SOPs, e-books, and several other kinds of content.

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