The thing about the future, where robotic super traders fight over micro-movements in stock price, is that it already exists. With access to algorithmic trading bots a click away, we can see the fall of human investors and the triumph of artificial intelligence.
Algorithmic Trading bots Programs are programmed to trade when they detect pre-programmed conditions and can execute any trading strategy. They have been used by professional traders for over two decades, and these firms have taken them to the crypto markets as well.
Now, a new crop of accessible crypto trading tools has hit the market, designed with retail clients in mind. I know – I’ve made several of them. Currently, I am working on a system that helps novice investors find their risk preferences based on their previous trading and investment data.
The use of these bots can have a huge impact on the crypto market, as up to a quarter of retail accounts Crypto trading volume. And the most interesting thing here is that it can signal democratization of market access and participation.
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If this is to happen, access to commercial bots and other specialized tools must be combined with open education. Rebuilding a gated system where only “accredited” investors are allowed access to crypto markets while everyone else is left behind due to lack of education and capital is elitist and reactionary.
It is unfortunate that financial education is not taught in schools, leaving many at the mercy of sophisticated professionals and outright frauds. Trading bots, combined with proper education, are a step towards leveling the playing field.
This technology provides a one-of-a-kind experience. Education for amateur traders, allowing them to sense market movements using small positions and an automated strategy. They can experiment with different bots to learn about different strategies such as arbitrage, dollar cost averaging and trading futures.
Additionally, those who specialize in trading bots — for example, using several bots simultaneously representing a hedged or diversified strategy — can outperform experienced players. After all, no human can continuously monitor the crypto markets 24/7, but a bot can.
In fact, trading bots thrive in 24/7 crypto markets where they can miss arbitrage opportunities and Ride the waves of high volatility.. No human can keep up with these markets and will undoubtedly miss out on opportunities that a bot can take advantage of.
However, a trader still needs to make important decisions that will affect the bot’s performance, such as choosing the asset and price range for the bot to buy and sell. So, while bots are a great tool, they are not risk-free.
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The deeper traders understand entry and exits and timing trades, the better they will configure their bots. However, most users don’t need expert-level knowledge—they just need to understand why setting up a long-term grid bot on a microcap that’s just pumped 200% is a bad idea.
Another advantage is that bots take the emotion out of trading. Even professional traders struggle to keep a cool, calculated balance with big money on the line.
Some may “marry your bag” and Holdings when they should sell. This type of behavior becomes “dumb money” – trading that reacts emotionally to market swings rather than being dominant.
Trading bots do not suffer from this emotional disability. They execute their strategies in a computational vacuum. Novice traders can find a lot of value in these tools on their journey to becoming an independent trader and investor.
Earlier, professional traders honed their skills as part of the job. But with the advent of AI trading, retail investors now have an opportunity to catch up. As fear of inflation grips major economies around the world, it is imperative that sophisticated investment tools are accessible to everyone through access and education so that ordinary people can best protect their wealth and To create economic opportunities.
Bill Rust Head of Financial Products at Bybit. Before joining Bybit, he co-founded Panda Analytics, a crypto indexing and trading automation firm. He holds a master’s degree in financial engineering from the University of Illinois at Urbana-Champaign.
This article is for general information purposes and should not be construed as legal or investment advice. The views, opinions and opinions expressed herein are those of the author alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.
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