Why is it so hard for crypto trading bots to make reliable profit?


Crypto trading bots are software or programs designed to automate trading cryptocurrency assets on your behalf. Normally, a trader, whether stock or cryptocurrency, will have to sit in front of their computer screen all day, waiting for the slightest shifts in the market to execute a trade.

Crypto trading bots were created to replace traders. Traders now just have to input the specific market parameters that they want to trade in. If the market hits the specified price, the bot automatically executes the trade.

On the other hand, things may take a wrong turn and the market might dip. In which case, I want to protect my portfolio. I added a cut loss setting whereas if the price dips below $52k, I would sell so I don’t lose too much money. If I have more Buying Power, I can also input a command to buy more BTC when the stock price is low so I can decrease my Average Price and increase my earnings in the future. In Stoic all this is done automatically without any complicated settings.

Suggested By: John Maven

They are not made to really make a profit. More so to execute trading strategy. For the most part, they are highly fallible and end up in losing money or tying it up for longer than it would take for a human counterpart to make the money with smart trading. The only thing bots are good for is driving down the price of a crypto so everyone loses as a whole due to reduced value. They do on the other hand have a few useful features like being able to buy and sell on the same page and data mining.

Suggested By: Jan Ptak

Its unfortunate that many people do not ask themselves this question yet there has been a growing hype for crypto trading bots. The hype is mainly based on the prospect of easy money and anyone who knows anything about making money knows that it is never easy. In fact, anything that is advertised as easy money is often times an avenue for losing money due to the high level of risk involved. Crypto trading bots marketed for sale may work under certain conditions and this is what they use to demonstrate its effectiveness. However, the markets are constantly changing and these changing conditions render the crypto trading bots ineffective over the long-term. You might thus make some cash through a bot but you will end up losing more over time.

Suggested By: Dinara

Trading bot is just a smart tool for crypto trading. It can make your crypto trading strategy complete. However, in the downtrend, even bear market, any trading bots cannot guarantee a positive profit. But compare with directly buying Bitcoin, ETH, or other cryptocurrencies, bot trading performs much better.

The crypto market always has lots of big and small waves 24/7 hours without any stop. If you keep faith in Blockchain, Bitcoin or other cryptocurrencies, using trading bot for your crypto investment is a good choice. Because trading bot can make your investment more stable in a long term.

Suggested By: Asher Osborne

It is a bit misleading to say that crypto trading bots do not make a reliable profit. Most crypto trading bots only automates the crypto trading process for you. They do not eliminate the risks involved in investing. Thus, using a bot does not guarantee you profit or prevent you from having losses. It is not a get-rich-quick scheme. Even other crypto traders with years of experience undergo losses from time to time.

Of course, this does not mean that all crypto trading bots have equal potential to make a profit. These AI-driven bots rely on the trading algorithm and strategies embedded in them. If you are not making a reliable profit with your crypto trading bot, it probably means that your bot is using the wrong model or data.

Suggested By: Marcie Terman

One of the problems is that developers will overfit their backtesting so when they run their test data the results look awesome but when they live trade the system falls over. The results look great, but in fact, the ‘correct’ answers have been supplied in advance so it is not surprising that the algo seems to be immensely profitable.

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