Cryptocurrencies as an asset class are volatile, very volatile. Now, as a buy and hold investor, volatility isn’t what you want.
Imagine the pain of losing 20% of your entire hard-earned money in one day or even worse 23% in 15 hours — ouch!
However, for a trader, volatility is great. Being able to invest at lower prices when the market is having a tantrum and offloading risk when the market is in euphoria is literally the life-blood of a market maker at an Investment Bank.
If we could apply the same principles to create algorithms and then automate the whole set up, well that would be just fab now wouldn’t it? Cryptocurrency trading bots are computer programs that automagically buy and sell various cryptocurrencies at the right time with the goal of generating a profit.
That’s literally it. It’s important to note here that not every bot is profitable, in fact, most aren’t. It is trivial to make a working bot, less so to have a profitable one.
So, ideally the bots actually generate a profit and ideally that profit is greater in risk-adjusted terms than had you have just bought the same coins and held them throughout.
When I say risk-adjusted, what I mean is that your positive gains relative to the negative gains you’ve suffered whilst being invested is better. To demonstrate this have a think about the following,
Which would you rather have:
- Daily returns of 1% every single day with zero negative days, with a total return across the year of 250%.
- Returns of +10% Monday, -5% Tuesday, +3% Wednesday (and so on) with a total return across the year of 500%.
Hopefully you picked the first one.
See, the first example is consistent. And when something is consistent it becomes a lot less risky.
In fact, you should still prefer the consistent returns of the first example even if the second one ended up at 1000% over the course of the year.
The key is in compounding. The point here is that given the option of consistent (strong) returns and a rollercoaster ride, you should almost always pick the consistent option even if the rollercoaster ride may land you with higher returns in future.
Cryptocurrencies as an asset class are highly volatile and non-reliable. If you want to buy and hold investments, volatility is not what you want. Imagine the pain of losing 20% of all your hard-earned money in a day.
However, a highly volatile asset is great for traders. The ability to invest in lower prices when the market is panic-stricken and reduce risk when the market is high-up is literally the lifeline of trader.
Wouldn’t it be nice if the same principles could be applied to generate a crypto trading algorithm and automate the entire process? That is what phpTrader has done.
Cryptocurrency trading bot is a computer program that allows you to earn money by automatically buying and selling various cryptocurrencies in a timely manner. It is important to note that not all bots are profitable, and most are not. Creating a practical bot is a minor task. The main task is to create a profitable one with consistent yield.
So, ideally, your bot will make a profit, and ideally this profit is more risk-adjusted than if you bought the same coin and held it all the time. When we say risk-adjusted, we mean that the positive gains outweigh the negative gains from investments.
To illustrate this, consider the following:
Which do you prefer:
- 1% daily returns without negative days, 0 days with negative days, 250% annual total return.
- Yield + 10% on Monday, -5% on Tuesday, + 3% on Wednesday (e.g. 450% annual return).
The first example is consistent. And if something is constant, it becomes much less dangerous.
In fact, you should prefer to return the first fixed sample even if the second sample ends at 1000% of the year.
The keys are getting worse and worse. The point is that if you are offered the option of the rollercoaster ride and the consistent yield even though, roller coasters may give you higher returns in the future, it is always best to choose an option with a consistent yield.
High returns are not enough, high-risk custom forms are required. And this is what really makes a cryptocurrency trading bot an interesting proposition. We can find a way to get the most out of our cryptocurrency, but without the usual punch, that would be a far more attractive investment proposition than the roller coaster option should offer.
PhP sets is in the process of developing two versions of its autotrader to boost consistent yield
phpTrader’s trading bot analyzes the price difference of cryptocurrency between exchanges or within the same exchange to close the transaction and generate profit. The main investment resources consist of the investment assets of general customers and major shareholders, and profits are redistributed according to the ratio of the investment amount. Basically, phpTrader aims to maintain stable profits rather than high risk, high returns, and this method is receiving great response worldwide.
phpTrader is preparing two versions of trading bots: This is a method in which the trading bot provides investment timing and expected rate of return centered on exchanges and wallets opened by individuals, rather than recruiting investment assets at the head office and distributing them to the exchanges directly at the head office.
Compared to the current system in which this type of trading bot even closes the actual transaction, there may be problems such as delays in trading timing due to the difference in processing speed, and the yield may be slightly lower. Nevertheless, from the standpoint of investors, the reliability of investment is expected to increase in that they can manage their own investment assets. Another is to open up the tradingbot’s API.
As of now, it will be a format that provides a license and API to operate a trading bot directly from the phpTrader headquarters and access the trading bot from outside. From the customer’s point of view, you will be able to freely select and invest among various cryptocurrency investment companies that utilize the trading bot developed by phpTrader in addition to phpTrader.
This method has been proposed by various cryptocurrency investment operators through various channels and has been reviewed in depth at the headquarters. The schedule of development for such a new trading bot is thoroughly classified as confidential, and it is expected that it will not be known to the outside until at least the beta test is over.