How Profitable is Automated Bitcoin Trading?

Appliance of trading bots hasn’t appeared to be effective in multiple ways. Bitcoin and Ether have relatively stable prices nowadays, but still nobody can tell for sure when the drop or the rise is going to happen. Especially not any automated bitcoin trading system. It can be successful if the reaction of the program is fast.

How do these bots function? Basically, automated trading systems are software programs that interact directly with online exchanges. They trade on your behalf by following price movements and reacting according to the set of rules. Can they be profitable? In some ways, yes, but most of the evidence come from the early Bitcoiners, and as we all know, they all got rich anyways.

One of the ways certainly is trading in different exchanges. One of the first who implemented trading bot technology, basically bought all of his Bitcoins on tertiary markets and re-sold them on others creating a market where there wasn’t any in the first place. That could make sense and there is a big difference – he didn’t follow the market trends, he created them.

Nowadays, there are not many opportunities for this sort of inter-exchange trade, but still, technology evolved and there are other ways of creating profit through automated trading. Computers can’t take into the perspective many of sources that traders who act on intuition use. Computers can’t calculate through rumours or the past experience a person can get through online trading. What they can do? Computers can perform sophisticated technical analysis that can be used as a starting point for an automated online trade.

Exponential moving average often is a foundation for trading bots. Basically, they keep track of price movements with commands to sell or buy after the price goes over or under some of the criteria. Besides EMA, there have been improvements with double exponential movement averages or even triple ones. These improvements are included because of the major flaw of trading bots – you always react almost too late.

Currently, it is not sure to say is it profitable or not, probably not, if you aren’t capable of developing your own algorithms upon which a trading bot could function. Since there has been evidence on successful automated trading, many traders are installing different programs. Butter Bot can offer you a simple plug-in on your Chrome browser. Also, CryptoTrader offers you a different set of options on how to optimize your trading bot.


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