The road to profit in the crypto market is never an easy one. The market can be ruthless and you can lose a lot of money if you do not tread carefully. When the crypto trading bots became a thing, they were either loved or hated by the community. People are mostly polarized: boasting about their large profits, or calling it a scam. Usually, the truth is somewhere in the middle, and as you will see, trading bots actually just reflect your own trading skills.
In this article, we will examine the types of crypto bots concerning how they generate profit, and we will review one of the more ambitious trading bots: BitLQ.
Crypto bots and profit
Bots are essentially your assistants, which act upon your precise instructions. They can be great because they save you time and resources, so you don’t have to stay on the market 24/7, grinding and catching the smallest of changes.
Bots can not only buy or sell multiple cryptocurrencies simultaneously on different exchanges, but they can also collect and interpret market data, and predict prices, volatility and risks. Of course, this is just in theory; everything depends primarily on the trader and his instructions provided to the bot. This means that the bot is more or less an automated version of yourself – its strategy actually reflects nothing else but your strategy.
Different types of crypto trading bots
Trading bots come in many different forms, with unique perks and characteristics. Here are the most important types on the market.
Margin trading bots
These bots borrow money from exchanges and then use that extra capital to trade for you. They can bring a substantial profit over time, assuming the investments are profitable. Just be careful because a wrong strategy also means accumulating losses.
Coin lending bots
These bots lend coins to other traders, then collect profit from the interest acquired. Automating this process saves a lot of time, because without a bot you would need to manually set your rates every time. It also carries a low risk for the invested funds and is mostly safe overall. Parameters that can be modified include the currency, the duration of the loan, and the interest rate.
Arbitrage bots
These bots make a profit by catching differences in the market. They buy a certain cryptocurrency on one platform, then sell it on another and collect instant profit. Arbitrage always adds a minimal “+” value, and requires huge investments for small gains. However, if you want to be sure of making a profit, this is the type of trading bot for you. Just be patient and ready to wait a long time for substantial earnings.
Market making bots
These bots are colloquially referred to as “spread”. That’s because they make money by inspecting the market to find the lowest possible buying price and then sell later at the highest possible price. Thus, such bots are exploiting the fact that the price is not a fixed number, but rather a range of prices, i.e. spread.
Technical bots
These bots are the most advanced ones and have started to dominate the market in recent years. They are supposed to analyze many different market data inputs, after which they predict coins’ price movement. These trading bots are most effective on paper, but require a solid and deep long-term strategy.
BitLQ
BitLQ is an advanced bot that uses a combination of trading techniques to make a profit. Its website says it can analyze the market, including trends, news, and price history patterns, in order to employ this data when buying and selling. It combines these long-term aspects with finding arbitrages and spreads to collect shorter-term profit. Bitcoin is its main operating currency, but it also operates with a few other well-known coins such as Ethereum, Cardano, etc. You can find more details at ScammerWatch.
BitLQ was envisioned as a crypto bot that would be very helpful to traders regardless of their experience. It is structured in such a way that you can start using it without prior knowledge of bot trading. Still, needless to say, more experience and skill will always generate more profit.
Conclusion
As we have learned, different types of bots are intended for different ways of profit-making. It is up to you to decide whether you will be skimming small margins when arbitraging small percentages, on the one hand, or going for deep strategy and long-term technical attempts.
Of course, how much you earn will always depend on the total amount invested. It depends on a cost of a trading bot as well. Just remember, at the end of the day, the profit depends primarily on your skill, not the bot.
Also Read: Excellent Justifications For Why Bitcoin Is A Deserving Cryptocurrency!
