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AI Crypto Trading Bots: Are They Reliable?


If you want to trade crypto but don't want to deal directly with statistics, order books, and other fussy elements, you may be interested in using an AI trading bot. But is it safe to automate your crypto trading venture in this way? Can you trust AI trading bots?

What Is an AI Trading Bot?

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Artificial intelligence (AI) has made its way into almost every industry, be it healthcare, logistics, finance, or even art and music. So, it's no surprise that we're now seeing AI present its value in crypto trading. AI trading bots are now a sought-after service for many crypto traders, but how do they work?

An AI trading bot is a computer program that uses machine learning to trade cryptocurrency in a way that is effective and beneficial for the user. Using complex algorithms, AI trading bots can gather masses of knowledge about the state of the market before executing a trade, allowing for well-researched decisions.

An AI trading bot can analyze all kinds of data in real time, including prices, predictions, demand, and trends. Combining all this information, the AI trading bot will make the trading move it deems best.

What's more, trading bots can learn, be it from data or past trades, allowing them to improve and better serve the user. Of course, humans can learn too, but a bot can retain all the required information, which stops it from forgetting what to steer clear of or pursue next time.

Lastly, AI trading bots cannot show emotion, meaning all trades are conducted solely with logic. Sometimes anxiety, excitement, or pressure may cause a person to make ill-advised financial decisions. Using a bot, this risk is removed.

At times, AI trading bots can do an even better job of trading than humans. They can also process and interpret data much faster than any human could, saving users a lot of time and preventing them from cashing in on short-term opportunities.

Note that AI trading bots are not the same as rule-based trading bots. As the name suggests, rule-based trading bots follow particular rules in their trading endeavors and do not use machine learning to assess situations or make decisions.

Can You Trust AI Trading Bots?

On the surface, the idea of using a crypto trading bot seems pretty great. If you lead a busy life or aren't well-versed in crypto trading, using an AI bot could provide you with the support you need.

Many crypto trading bots are designed to serve users in the best way possible. However, there are still risks to consider.

Firstly, an AI trading bot can be hacked, either to steal funds or disrupt the service. Nothing is 100% secure online, so there's always a chance hackers may abuse the trading bot you use.

Like any online service, an AI trading bot can also run into technical issues, such as algorithm errors, which may lead to the bot making poor trading decisions. The consequences of an algorithm flaw may be minimal or catastrophic depending on how much of your funds the bot has access to and the nature of the flaw itself.

Even if you're using a highly reputable crypto trading bot, technical issues are always a risk, so keep note of this.

What's more, you may encounter a scam trading bot designed to steal your data or money. Scams are commonplace in crypto, with many seemingly legitimate services hiding malicious motives. A trading bot service may also claim to use AI when in reality, it follows a rule-based structure.

This is why vetting any crypto tool before using it, including AI trading bots is important.

The best way to do this is to check reviews first. Reviews stand as your insight into how a platform works, how it treats its customers, and whether it's worth trying. If you're seeing a lot of critical feedback and disappointed users, it might be best to steer clear.

Avoid checking reviews on the platform itself, as the operators may manufacture these to gain the trust of potential customers.

You can also look at the websites of AI trading bots to determine whether they can be trusted. If you notice a shady privacy policy, unrealistic promises, or a lack of information regarding how things work, you may be dealing with a scam site.

Additionally, you want to avoid running into shoddy trading bots. While such services may not have any malicious intention, poor features, research, and security can lead to many problems, especially for the end user.

A lack of backtesting, incorrect settings, and rapidly changing markets can also cause your trading bot to fail, so make sure you've considered or vetted each of these factors before entrusting any service with your money.

Using an AI Trading Bot

mizar website homepage screenshot

Anyone can develop a crypto trading bot for themselves or others, but that takes a lot of technical know-how. If you want to use an AI crypto trading bot but aren't tech-savvy, there are plenty of services to choose from. Many of these services are also pretty easy to use, even if you're a crypto beginner.

Typically, an AI trading bot will ask you what you want to achieve and what rules or limits you want to set. Make sure you've considered your crypto trading strategy before letting the bot trade on your behalf. You can also set monetary restrictions to ensure the bot isn't spending too much.

An AI trading bot may be free or paid, depending on the particular service you're looking at. Sometimes you'll have to pay a small fee for the bot to trade on your behalf, and sometimes there'll be no charge.

There are plenty of free trading bots out there, but it's important not to overlook any red flags to grab a trading tool free of charge. Scam platforms often use the allure of a free service or product to lure in victims, so keep this in mind when looking for an AI trading bot.

Below is a list of commonly used crypto trading bot platforms:

  • Kryll
  • Mizar
  • CryptoHopper
  • Pionex
  • Stoic
  • Bitsgap
  • TradeSanta

Even though the above platforms are commonly used, it's still important to consider the associated risks. After all, there's no guarantee that these services will make you a profit, even if promises are made and the features look solid.

AI Trading Bots Could Help You Out

Whether you want an alternative trading option or are just curious about new avenues, you may enjoy using an AI crypto trading bot. Just make sure you set the right parameters, and consider if you can really trust the tool you're using, or you may end up worse off down the line.

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