You often ask us in our Telegram channel, if you should buy a greater number of trading bots or fewer, to make a difference in gains.
Indeed, is there a connection between the amount of crypto bots and your profit?
Actually, no. There is no visible connection between the number of bots you run across exchanges and your gains. Bots are neither magic beans nor a recipe that will help you make a killing in trading overnight.
Here is why.
They are just a piece of automated software that can trade crypto across multiple cryptocurrency exchanges on your behalf while you sleep, work or spend time with your friends.
Crypto markets are incredibly volatile, with prices fluctuating in a matter of minutes, day in and day out. Sometimes it’s simply beyond human limits to keep up with the tempo 24/7 and react quickly enough to achieve optimal trade goals.
This is what bots can help you with. They give you an advantage of time and speed. It’s just that with more bots you spend more time to pet them, with less bots, you spend less time.
Also, depending on the functionality of the platform where you buy crypto bots, you can program different features into it.
Overall basics include a trading strategy of your choice, say, long or short, a trading pair, take profit targets, order volume and signals, such as Bollinger, your cryptocurrency bot considers when choosing entry or exit points.
So you might make some profits or, let’s face it, lose your money regardless of the number of your bots.
What really defines your overall result is your trading strategy, the crypto you put your money into, volatility ranges and the initial amount of your investment. If you invest $10 and set a 10% profit target, you will gain $1. If you invest $1000 and set the same profit target, you will make $100.
In other words, you achieve your trading goals not through the number of crypto bots but through other important components.
Why do some people run multiple trading bots?
There is one important aspect that impacts the number of bots traders use, and that is portfolio diversification.
The rationale behind this technique, according to Investopedia, is a risk management strategy where a wide variety of investments within a portfolio yields higher long-term returns and lower the risk of any individual holding or security.
To have a diversified portfolio, basically, means to invest your money in different assets. In a way, crypto bots help you with that because the more bots you have the more diversified your portfolio is.
But does a diversified portfolio promise more gains and a reduced risk? Not always. You might be a crypto expert on just one trading pair, use one bot to track this pair and still show gain.
So there are no guarantees in life… and trading. You might make money or lose money, either you have a greater or fewer number cryptocurrency bots.
The thing is that bots can only work financial magic if you can work financial magic made possible by your knowledge, skills and experience.
Is there a connection between the amount of crypto bots and your profit?
There is no visible connection between the number of bots you run across exchanges and your gains. Bots are neither magic beans nor a recipe that will help you make a killing in trading overnight. They give you an advantage of time and speed. It’s just that with more bots you spend more time to pet them, with less bots, you spend less time.