Automated Crypto Trading Bots — New Prospect For Traders

In 2022, any financially aware person will want to invest in crypto because of the benefits it provides. For people chasing the quick bucks, cryptocurrency trading has become a lucrative source of income. While trading and investing have different outlooks and motives, doing both on autopilot can be a great option for beginners (or even seasoned traders).

The difference in approach between retail traders and institutional traders

Unlike institutional traders, retail traders do not have huge capital to work with. The risk appetite for retail traders can be significantly lower than institutional traders. To address these issues, retail traders prefer a fool-proof approach that gives them assured returns with minimal risk.

Institutional traders, on the other hand, have a lot to gain and lose. They can afford expensive risks in the hope of making huge returns. Their approach to trading focuses more on making maximum profits than minimizing risk.

The challenges of crypto trading

As most of us already know, the cryptocurrency market is highly volatile. The difference between profit and loss can be a matter of minutes. That’s why it is very important for retail traders to enter this domain with caution and awareness of the best practices.

As a crypto trader, you would have to ideally spend your entire day tracking changes in the market. The existence of 15,000+ cryptocurrencies does not make the task any easier. For most people, it is not feasible to spend 24 hours in front of the screen to track every small change in all of these cryptocurrencies.

Retail traders stay away from the crypto market for this very reason. The amount of work that goes into it can be inhuman. At the same time, small mistakes can lead to significant losses. Beginners are often discouraged from entering the crypto trading space for these reasons.

The role of automation in crypto trading

Automation has impacted every aspect of human society. From simple tasks like sending emails to complex programming, automation has made everything easier. The same applies to crypto trading.

Automated crypto trading bots are at the cutting edge of technology. These bots are more capable than manual traders in every sense. Unlike humans, automated crypto trading bots are not susceptible to biases, sentiments, or errors in judgment. 

However, automated crypto trading bots are not a one-size-fits-all solution. They are highly customizable depending on your risk appetite, capital, goals, crypto assets and exchanges you want to trade. For example, you can easily tune a Binance trading bot  for yourself, so your cryptos will be automatically traded. Overall, trading bots work for retail traders of all sizes and backgrounds and make trading significantly simpler.

How automated crypto trading bots work

The three main stages in the functioning of automated crypto trading bots are as follows:

●      Signal generation

●      Risk allocation

●      Execution

In the signal generation phase, trading bots notify traders about any fluctuations in price. The parameters of notifications are customizable. That means you can determine when the bot should generate a signal. You can choose a price fluctuation of 1% or 10% or any given percentage. As soon as your selected tokens undergo these changes, the trading bot generates a signal. Depending on the preset parameters, it either proceeds to the next step or waits for manual intervention.

In the risk allocation phase, the trading bot invests a stipulated amount into the trade. Users are given the option to customize risk allocation depending on their risk appetite. In some cases, the risk is diversified, i.e., invested in different tokens. Depending on your approach, you can choose between a given number of tokens.

The third and final stage is execution. In this step, the automated crypto trading bot finalizes a trade and executes it. It works for both buying and selling, and users are given customization options in this stage as well.

Automated crypto trading bots follow an algorithm and trade accordingly. While they do not guarantee huge profits, their margin of error is zero and they offer a better chance of making profits. For retail investors, automated crypto trading bots are a game changer. They have enabled retail traders to approach the market with confidence and not lose sleep and money in the process.

Why retail traders should make the most of automated crypto trading bots

As we mentioned earlier, retail and institutional traders approach the market differently. With their low risk-taking ability, retail traders are almost always better off with an automated, error-free solution. Trading bots give retail traders the much-needed security that a fool-proof, customizable algorithm offers.

Take sentiment out of the equation

Sentiment is a make-or-break factor in trading. Traders would often rely on their intuition and sentiment to make a call. If and when it works, it can give amazing returns. Unfortunately, it can also lead to very expensive mistakes. Most retail investors are advised against relying on intuition because their risk-taking abilities are much lower than institutional traders. Sentimental moves can leave them astray resulting in repeated missteps.

Automated crypto trading bots completely remove sentiment from the trading equation. Since they are based on preset parameters, traders cannot make impulsive decisions whenever they feel like it. While that seems like a drawback, it indeed protects retail traders from potentially losing significant amounts of money.

Enter the market with confidence

For all their volatility and uncertainty, cryptocurrencies have been life-changing for many investors and traders. HODling is definitely a safe strategy for investors, but traders do not have that luxury. For this reason, many people stay out of the market altogether and miss out on huge potential gains.

Automated crypto trading bots make it easy for anyone to enter the market with confidence. These bots take the stressful decision-making parts out of the trading process and offer a great chance to earn big profits. At the same time, they protect traders from volatility, making them perfect for the average retail investor’s risk appetite.


Automated crypto trading bots have changed the way retail traders interact with the crypto market. They have made it possible for anyone to enter the market and reap big bucks from it. If you want to take your trading game to the next level, automated trading bots might be what you are looking for. 

Photo by Anna Nekrashevich from Pexels