Human Traders Vs Trading Bots: Which Is Better?
With cryptocurrency being a volatile market, trading robots, or bots for short, have gained quite a bit of popularity due to their automated nature of trading. The biggest advantage of a trading bot over a human is that, unlike humans, bots don’t need rest and can trade 24/7. According to the 1k Daily Profit review, it is one of the most powerful crypto trading apps on the market trusted by thousands of professional traders. The world-class trading algorithm manages to make detailed technical analyses of the crypto market to generate profitable trades. However, let’s take a look at the similarities and differences between a human trader and a trading bot to gauge which is better.
Criteria to Evaluate Trading Accuracy
It can get tricky to evaluate trading accuracy. The best way is to consider the four points that are mentioned below.
It can be accessed through a bot platform. A majority of such platforms are only one Google search away. You get numerous results that meet your search requirement.
- Proprietary Trading
This category is better supervised by a professional who excels at being a statistician or a financial expert. Bots have been considered to be superior to humans trying to catch up.
Humans continue to rule the Investment sector. The position of Fund Manager is far from being given away to a bot. They are known to adapt better to unfamiliar situations.
- Retail Investors
A retail investor generally marks his or her presence on the trading platform. The high intense environment is what they thrive on to earn a lot of incentives.
Why Human Traders?
Humans may have looked a bit weak till now, but they do have a few advantages on their side.
- Less Vulnerability
Humans are less vulnerable to fall for a manipulative tactic. They have a reasonable perspective to analyze a situation or breaking news.
- Nature of Analysis
Certain scenarios require an in-depth analysis. The capability is possessed by humans only as they can go beyond the first-degree thinking point.
- No Bugs
Unlike bots, humans don’t crash or get involved in a massive movement of money. They require a bit of a rest to get back to work.
- Face Rare Events
While bots can only tackle the events for which they have been programmed, humans can work under any circumstance. They can even dare to seize it as an opportunity to get an advantage.
Why Trading Bots?
Trading bots offer a lot of long-term commitment. Let us analyze if all of it is worth it.
A bot has been known to have higher potential than a human. They perform every task efficiently. This applies especially when the trading firm has a lot of workloads.
- No Emotions
Lacking emotions gives the bots an advantage over humans. Bots do not get attached to a position or a result. They simply analyze the given data and a range of events.
Once programmed, bots can perform all the tasks without any human supervision. The function of a given set of logic is to predict the outcome. The skilled programming makes it easier for bots to conclude a favorable outcome.
Once the trading firm expands, it can rely more on a bot. Bots can process data in less time no matter what the size of data is. Where humans take hours, bots take only a few minutes.
Certain situations require a similar response. Instead of humans wasting their time on it, bots can be programmed to perform those functions. This would further lower the level of risk.
While humans get tired and set out to take a break, bots continue to function 24/7 unless a scheduled repair work comes up. The trading firm gets more opportunities to expand its areas.
- Risk Management
A trading firm tests more than one strategy together. Bots make it easier to backtest as to what strategy worked. Hence, making it convenient to manage the risk.