The Rise of AI-Powered Crypto Trading Bots - What Should You Know?

Artificial Intelligence (AI) is clearly on the rise, slowly morphing into a force to be reckoned with.

12:12 18 November 2021

From a growth perspective, the last few years have been nothing less than phenomenal for companies involved in creation and delivery of AI related products and services.

 

Realising what they could accomplish with an AI-first approach and to keep their competition at bay, many companies the world over are more than willing to invest boatloads of money into setting up their own infrastructure that allows them to tap into the potential that this cutting-edge technology presents. No wonder the applications of artificial intelligence and machine learning are becoming more and more widespread, leading to new possibilities and breakthroughs across industries from healthcare to logistics and airline to algorithmic trading. 

 

Although the impact of AI has been extremely positive, it’s still early days and there is a lot of work to do in terms of bringing refinements to the technology so it becomes much more adept at reading problems/situations and more accurate at solving them on their own without human intervention.

 

In this article, we take a look at how crypto-trading, a fast-growing field, has benefited from the introduction of AI-powered trading bots. 

 

For several years now, trading bots have been the choice for tech-savvy crypto traders who often fancy pushing the boundaries of trading with an armoury of new cutting-edge tools and trading techniques. Let’s understand why this has been the case.

 

AI in Crypto Trading 

 

The cryptocurrency markets offer a high level of volatility, making it a perfect hunting ground for traders who thrive in markets with extreme price fluctuations. Successful crypto traders embrace the risk that comes with it and use it to their advantage to make huge profits. They devise their trading strategies around the massive volatility in prices on offer here. Some traders like dealing in huge volumes when they sense an opportunity. Like a lion ready to pounce on its prey, they time their entry and exit to perfection and look to scalp a few points (difference in prices) which given the scale they operate at amounts to huge profits. But, it’s certainly not easy to predict the price patterns of a market that changes as dynamically as the crypto market does. This is where an AI-enabled bot designed and purpose-built for cryptocurrencies comes in. 

 

Trading Automation 

 

Another key benefit to trading cryptocurrencies with an AI-based bot is the power of automation it places in your hands. All you need to do is make an online account with a trading bot like Crypto Engine for instance and lay down the rules aligning them with your trading strategy. That’s all. The bot will take care of the rest, from finding favourable trading signals/opportunities in the market to placing orders on your behalf based on the parameters established. 

 

Armoured with the capability to process terabytes of data in little time, these bots combine algorithmic smarts for predicting where a crypto asset is likely to move next with the essential aspects of technical analysis like price action to come up with highly accurate forecasts. For instance, NeuroBot is a crypto bot that predicts exchange rates of crypto using neural networks, an advanced statistical model promising higher accuracy in forecasts. Built especially for the dynamically changing crypto markets, these bots lure tech-savvy traders with their matchless profit potential. These bots, however, don’t get much patronage from long-term investors, who, in essence, believe their time in the market (as against timing the market) has a lot of bearing on their success. 

 

Advanced Features with Algorithmic Smarts

 

Leading trading bots come with built-in capabilities like advanced charting features, facilitate digging into data thru a powerful backtesting module, and offer a number of trading templates that get automatically invoked when market conditions match the rules defined by the user. Some of these bots are so smart and intelligent that they can help you find your edge in the market, say, by helping you come up with your own trading strategy from a combination of technical analysis indicators. The crypto trading bots, although fairly new, are quickly expanding and branching into one that even the seasoned traders find to be worthy enough. Other options currently available include decentralized crypto trading which lets users perform automated trading using blockchain technology. It stands out in that your funds are held in smart contracts--a piece of code written to perform certain financial functions on its own—which is then uploaded to a compatible blockchain network for automated crypto trading. It might take a little time to be used more commonly but it is by far the most secure and newest form of crypto trading that is in use right now.

 

What this means is that, you can pick the one that suits your skills and technical prowess and run with it for as long as you want. And, as you gain experience and get a better handle of the nuances underlying crypto trading, you may progress to using bots that throw open a whole new world of tools and techniques to help you become the ninja crypto trader that you aspire to be. 

 

Closing Thoughts 

 

More and more bots entering the crypto scene is a clear sign that crypto trading with AI is the future. Bear in mind that crypto trading could be sophisticated in every sense of the word but it doesn’t guarantee a market-beating profit potential every time you place your trade. These bots, according to recent research reports, have been able to post impressive numbers generating huge profits every now and then but how consistent their performance will be is something you need to wait and watch. If you’re sold on the idea of trading with an AI-powered bot but sort of unsure how to get started, do your own research, consider your experience, and pick the one that suits you well. Not many bots have a good track record of placing precise orders and delivering good results on a consistent basis despite having a glitch-free trading algorithm competent enough to handle the massive volatility of the market. Take a look at the different options in the market and make a prudent choice as if your life depended on it.