Automated trading has been present in our society for quite some time and has always had its share of pros and cons. Loved by the majority of cryptocurrency traders, a trading robot can be extremely difficult to get right. If purchased properly, they can lead you to make great profits. No matter what type of business you run, you will want to make the right investment decisions.
If you do end up with a bad trading robot, you may lose every penny you’ve generated during this time. If you’re planning to purchase a trading robot yourself, here are five tips to find the most reputable one.
Do Your Research
Always look at several trading robots before finding the right one for you. Every trading robot website makes claims of making you instantaneously rich, but with no explanation as to how. You can easily get the answer to that by reading the reviews of the same models online. Apart from that, you must also check how long the system has been in for. If it not showing any positive consumer testimonials from the past two years, save your money and continue your research.
Look for Live Trading Results
Most websites possess a great winning ratio of 90-99% on their robot. This seems to be verifiable as they claim the robots are tested in the simulated environment. However, simulated environment varies a lot from the real one, as it only checks the ideal scenarios, thus producing false accurate results.
These websites conveniently only mention these simulated environments in the fine print. Therefore, you must check for the live trading results of any trading robot before investing in one.
Back Testing
Be sure that the robot you’re purchasing has been back-tested on several currencies and in different market situations. This will help you understand how the robot performs in different situations and the potentials losses and gains it’s capable of. If any seller avoids running backtests or won’t let you perform one on their robot, you should absolutely not move forward with any sort of purchase.
Keep an Eye on the Drawdown
Every trader has a different capability when dealing with a drawdown. Some of them can bear up to 25% of their portfolio while others can stay strong at 50%. Therefore, it is crucial to see that how much of drawdown your robot capable of. The drawdown also needs to be consecutive rather than a one-time deal. If the numbers produced by the robot seem excessive, it’s suggested to move on and seek out a better option. For your reference, take a look at the top 10 crypto robots here.
Check the Order Size
The order size of a robot may vary in terms of results since every robot functions better on a particular order size. Always check your robot on multiple order sizes before buying one, so that your profit doesn’t vary much with the change in size. If the difference in the probability of a gain or loss is too high for the change in order size, you should stay away from the given robot.
