Are trading robots profitable?

Trading robots are applications that allow you to trade automatically on the financial markets. In this guide you will find out everything there is to know about these faithful allies of good traders.

Trading robots are programmable software programs that allow for the automatic buying and selling of financial assets. These are also known as "Expert Advisors". Traders particularly appreciate them for their ability to analyze statistical data from the markets. 

These software programs decide what actions to take for the trader. Moreover, they are able to open and close positions when market conditions are in accordance with the rules specified by their users.

Trading bots are usually specialized in their respective sectors.

Bitcoin Bots, for example, are used for investing and trading in cryptocurrencies.

Forex trading bots, on the other hand, are used for the foreign exchange market.

The analysis carried out by Expert Advisors are based on mathematical algorithms. These enable forecasts on the level of the markets' trends and the movements of the assets' prices. Artificial intelligence can thus detect possible investment risks and profit opportunities. 

The algorithms built into it are designed to determine the most rational decisions. These take into account general trends and short-term fluctuations according to the strategy defined by the traders. These tools are also capable of identifying specific events. They also pick up on specific patterns in economic cycles to better profit from funds and avoid losses.

Some trading software is also able to identify the most successful traders and the most profitable strategies. Thus, they can automatically reproduce them for the benefit of their users.

Robot trading: advantages and disadvantages 

Trading robots have become a must-have tool for investors of all levels. These tools offer many practical features. In addition, they allow you to take better advantage of earning opportunities by reducing the risk of investment mistakes. But these software programs also have their limitations.

The benefits of trading bots

Trading robots allow investors to spend less time monitoring their positions and the micro fluctuations of the markets. This is particularly beneficial for beginner and intermediate traders.

Time-saving trading robots

Trading software receives continuous real-time statistics from the markets. Software performs the analysis and places the orders for the investor. The investor no longer needs to be constantly behind the screen to identify risks and opportunities. 

Trading robots can also process thousands of trades in milliseconds, a much higher execution time compared to what a human could do. This time optimization increases the investor's return. 

A trading bot only needs to be connected to the internet to operate automatically. Moreover, its algorithms can work 24/7. Investors can thus let the software grow their money while they are engaged in other occupations.

Optimized investments with automated applications

Based on a logical analysis of the data flows coming from the markets, each decision taken by artificial intelligence ensures the best forecasts are obtained. It also helps to limit potential losses. 

Thanks to the speed of the operations performed by the trading robot, the investor takes advantage of the best opportunities for profit. The most profitable stocks are instantly detected by AI. 

Anticipating upward trends also allows you to open positions at the right time and close them more efficiently. This ensures that you can make the best decisions about buying or selling assets.

On the other hand, human emotions do not interfere with the decisions made by the trading robots. The funds invested are therefore not at risk of suffering the consequences of any trends linked to a collective panic.

In addition, the software automatically adapts the investors' strategies to take advantage of the offers and demands. This allows for a better valuation of the assets.

Greatly reduced brokerage fees

Trading robots can perform thousands of analysis almost instantaneously. This optimizes the time required to open and close positions. As a result, they reduce the number of orders to be placed while benefiting from the higher profitability of the invested capital. This reduces the number of transactions and the related trading costs. Thanks to the high frequency of transactions carried out by artificial intelligence, the markets benefit from greater liquidity.

Weaknesses of trading robots

There are hundreds of trading bots on the market today. This means that each bot has its own specificity. Moreover, this difference is reflected in the wide disparity of prices. For best results, it is therefore essential to make a prior comparison, to consult the opinions of users. This way, you will be able to opt only for trading bots issued by reliable entities. 

A limited period of use

Most trading robots are generally not usable beyond one year. Their basic algorithms are programmed by technicians and are not designed to evolve automatically. Hence the need for intervention by these technicians or an upgrade for the software to be effective in a new economic environment. 

Moreover, if not updated regularly, a trading bot can become inoperative and lead to large losses. In this case, it may be necessary to acquire new software.

Effective trading robots in specific contexts

In the case of a highly diversified asset portfolio, the use of several trading robots is recommended. As a reminder, each trading bot is dedicated to a specific activity. For example, a trading bot designed for Forex is rarely compatible with the cryptocurrency market. To invest in these assets, you will thus need to invest in software specifically designed for this type of investment.

Moreover, some artificial intelligences have algorithms that are entirely dedicated to short-term investment strategies. These algorithms consider mainly the micro-fluctuations of the markets to make investment decisions. 

On the other hand, some software is more effective for long-term investments. Therefore, it may be necessary to have two versions if you want to combine different time-based objectives.

Note also that the efficiency of trading robots' algorithms can vary depending on the context. Some are more reactive during periods of high volatility, while others are more effective when prices are less volatile.

It is therefore essential to understand how each trading robot works in order to benefit from all its advantages. Remember that their effectiveness depends on the environment in which they are used. 

To secure your investments, consider setting up limits with low positioning caps for stop orders. This allows you to limit possible losses due to a technical problem or a market context not supported by the algorithms.

The rise of trading robots may destabilize markets

The increase in the number of trading robots operating on the markets has led to a sharp increase in trading. This increase is felt in terms of volume and frequency. However, when the number of players on the markets is increasing, prices become more unstable. Prices are then more volatile. This makes it more difficult to demonstrate trends. It becomes more difficult to make forecasts, especially in the short term. Indeed, the market economy will tend to differentiate itself from the real economy.

Trading robots are not yet 100% reliable

Be aware that trading software algorithms cannot predict everything. Because of the many external factors that influence market movements, AI analysis sometimes results in errors. 

It should also be noted that to date, no human or artificial prediction allows real prediction of the uncertainties linked to the markets. Trading robots therefore do not fully protect against possible losses. The risk of losing all assets remains omnipresent. 

Finally, many users of trading software report errors and bugs not picked up by the platforms and the issuing companies. However, this can result in the loss of capital invested by traders. It is therefore wise to ensure some monitoring of these automatic investment tools.

How to choose a trading robot

When choosing between the hundreds of trading robots available, there are various criteria to consider. The selection should take into account the category of the software, the reliability of its developers, the reputation of the broker linked to it and its ease of use.

Choosing between trading robot categories

Note that you can choose between two main categories of software. These are distinguished by the type of algorithm used to analyze market trends.

Trading robots dedicated to technical analysis

This category of trading bots is designed to perform a study of asset prices to detect familiar economic patterns. Based on the result of the analysis, the expert advisor then proceeds to place a sequence of buy and sell orders. This operation can last several hours. 

The effectiveness of these software programs is based in particular on their ability to recognize as many patterns as possible that may trigger certain trends. The performance of this type of tool also depends on their ability to synthesize the identified patterns. This is done with a view to setting up market forecasts. The most efficient artificial intelligences can consider hundreds of different factors in the context of distinct investment strategies.

This type of expert advisor is especially suited to trading practices based on screening and exploitation of economic indicators.

Artificial intelligence for fundamental analysis

This type of trading robot is used to screen the financial markets. This software can be set up to identify the most profitable investment sectors. To do this, it relies on data received on the potential development of a company, its stock market listing and certain macro-economic contexts.

Fundamental analysis trading robots are also used for high volume trading. They are set up to take positions in the markets quickly. Specifically, when news is released that has not yet been confirmed as to its impact on prices.

The different types of binary options trading robots

All trading software performs financial market arbitrage on behalf of investors. But they can also differ in their strategies and algorithms. 

Examples : 

  • Trading bots equipped with a classic binary options system accept a time setting for taking positions and exiting the markets. Traders use them to invest automatically during the day or night
  • Fibonacci binary options trading robots work on the basis of a mathematical algorithm. The latter is known in the financial world to limit the risk of losing the investment 
  • There are also automatic trading systems for Martingale binary options. These versions perform the calculation of recommended bets based on the setting of the minimum rate of return. This probability-based technique allows, among other things, to predict and quickly bail out losses.

Compare offers and reviews of trading robots

To find a reliable trading robot, it is especially advisable to take into account the reviews of users. Some of the success rates displayed in advertisements may be far from the truth. 

You should also look at the services offered by the trading platform that developed the bot. Make sure that it offers updates for its trading bots. With this in mind, opt for subscription-based services. This will ensure that the investment software will benefit from continuous technical support.

On the other hand, it is also essential to go for trading bots affiliated with reputable investment platforms. This will ensure the reliability of the software, but also the quality of the data feeds on market movements. 

Finally, to make the right choice of trading robot, it is crucial to have some basic trading knowledge. Some parameters must be realized by the users beforehand.

Beware of scams !

Note that not all trading bots are provided by reputable companies. Many fraudulent software programs have appeared, taking advantage of the rise of trading bots. Many trading tools contain scams, malware, viruses and phishing schemes. Therefore, it is important to be informed and compare offers beforehand. 

Also avoid relying on the huge gains and incredible success rates claimed by some advertisements. Remember that trading always involves the risk of loss. However, many software programs have emerged that offer miraculous investment solutions and promise staggering rates of return. So while the idea of making huge gains without doing anything is appealing, you have to be realistic.

Some trading robots scams 

Here is a list of fraudulent auto trading sites to be wary of :

Aussie Formula, Bitcoin Pro App, Bitcoin Secret, Crypto Capital, Crypto Edge System, Cryptomatic, Crypto Robot 365, CryptoXOptions, Free Money System, iProInvestor, Kryptonex, LiteCoin Trader, Quantum Code, Zenbot, Crypto Masterbot

Note also that some trading sites use celebrity names for false advertising purposes to attract new users. However, to date, no French or foreign celebrity has confirmed his or her involvement in automatic trading software. These sites are not scams, but use unfair marketing strategies and can therefore lie about other aspects of their activities.

Is bot trading profitable ? 

Markets are uncertain, even for trading robots. As a result, there is always a risk of loss. Thus, it is impossible to give any rate of return with these tools. However, it is certain that some promises of gains reaching several thousand euros per day are just estimations, or even false advertising. Trading bots cannot make you a millionaire overnight as some ads promise.

The only certainty is that the potential gains from using a trading robot are highly dependent on the amounts invested. Market movements and the quality of the software used also contribute to your success. 

The potential losses will be even greater if the user of such software does not master the operation and the basics of trading.

How easy is it to get started with a trading robot ? 

Trading robots are almost all similar in terms of how they are set up. It all starts with a free registration on the site of your choice in order to create an account. All you have to do is fill out and validate the registration form. Then you need to make a first deposit to start trading. To limit the risks, we recommend that you limit this first deposit to the minimum required by the platform. 

Once the funds are positioned in your account, you must set up the bot. This includes specifying the amount you want to invest. You must also set the take profit and stop loss limits. 

You also need to specify the maximum number of trades that the robot will be able to make simultaneously and within a certain time slot. Then, don't forget to specify the assets you want to invest in. Once these parameters are set, you can start live trading.

Top 3 best trading robots 

Here are the 3 most popular trading robots with the best deals:

Bitcoin Trader : high performance software

This Expert advisor is associated with an automated trading platform created by Gary Roberts in 2016. It stands out for its free registration, efficient customer service, no transaction fees and fast transaction processing. The initial deposit required to trade is €250. The bot executes trades in just 0.001 seconds.

The trading bot supports Bitcoin, Ripple and Ethereum. It promises a 92% success rate and earnings of up to €1300/day. This one is affiliated with 128-bit SSL and KYC secure brokers, while being linked to CySEC. This trading bot also offers a wide range of payment and withdrawal options.

However, the promises of gains are not confirmed. Moreover, Bitcoin Trader excludes traders from the USA. Moreover, this trading software is only in web version. No mobile application is available yet. Its other weakness is its very limited offering of cryptos.

Bitcoin Era : software affiliated with reputable brokers

This trading bot was born in September 2008, but only got its license to operate cryptocurrency trading in 2016. It is affiliated with recognized and regulated brokers, including Europe FX and UFX. 

An initial deposit of €250 is necessary in order to start automatic trading, but registration is free. This application offers the possibility to use a demo account to get acquainted with the world of trading and digital assets.

Bitcoin Era promises €1,100 in daily earnings and claims to have a 92% success rate. Traders can use leverage of up to 500:1, however, they do not confirm the earnings promises. 

It should be noted that the opinions are very positive regarding the ease and speed of withdrawals. In addition, the interface has the advantage of being simple and intuitive to use. It also provides an instruction manual. The site offers a wide choice of deposit methods

Bitcoin Code : secure and no commission.

Partnering with secure brokers like UFX and Europe FX, Bitcoin Code requires a minimum deposit of $250. However, it provides a wide range of payment methods. Withdrawals are available in less than 24 hours.

This trading app promises up to €1,000 in profits per day and claims an 87% success rate. However, these claims are not proven. The big advantage of this app is that there are no fees on the services offered.

Like all trading platforms, Bitcoin Code charges commission fees on its users' earnings. However, users report very high success rates. In addition, users are supported by numerous tutorials and video courses. They can also find a calendar of events. This allows a better anticipation for crypto price movements.