Trading bots have taken over the crypto trading platform, especially on leveraged exchanges such as Bitmex and Bitfinex. However, with bots being advertised everywhere, people who are not well informed might end up losing money on useless bots that might not give any meaningful returns. To help you reap maximum benefits from automated trading, here are 5 things you should look for in a cryptocurrency trading bot.
- Customer support
A good cryptocurrency bot comes with customer support as a service. The last thing you want is to buy a bot only to struggle with its configuration simply because no one is there is to help you out. Customer support also comes in handy when it comes to dealing with bugs. Bugs are a reality in all digital systems, and without proper support, this is a problem that could make your bot worthless.
- Number of exchanges supported
If you have been into crypto for a significant amount of time, then you know that prices tend to differ on different exchanges. This creates amazing opportunities for arbitrage trading. However, to take advantage of such opportunities with a bot, it has to support multiple exchanges. The more the exchanges that a bot can access, the better it is at generating returns. The thing with arbitrage is that is almost risk-free, and a bot that can execute it is priceless.
- Preprogrammed trading strategies
Most people buying trading bots are not programmers, and have no idea how to customize a bot with their trading strategy. That’s why as an investor looking to invest in cryptocurrency bots, it is best to go for one that has some preprogrammed trading strategies. This way, all you have to do is choose one and implement it, and start making money. For those who have experience trading but are not so good at programming, a customizable bot should be easy enough for them to incorporate their own trading strategies, without the need to learn complex programming languages. Convenience should be the key.
- Number of trading pairs supported
When it comes to trading bots, the more the trading pairs it supports, the higher its chances of profitability. That’s because different coins have different levels of volatility at different times of the day. As such when a bot supports multiple pairs, it can trade the most profitable crypto pairs all through the day, and give you consistent profits 24 hours a day. A bot with only one or two pairs may not give similar returns.
- The ability to back-test strategies
The ability to backtest a strategy on a bot is an essential part of its potential for success or failure. That’s because it’s the only way to determine whether the strategy that is inbuilt in the bot works. On top of that, the ability to back-test different strategies also shows that the people behind the bot have put in the work, and have a product that has a strong intrinsic value.