Automation is transforming traditional processes as we know it, even when it comes to trading. While automated trading applications and services still make up only a small fraction of the crypto market, the proposition sounds good – 24/7 non-stop trading with the help of useful, perhaps even customizable bots that are a combination of price oracle and platform aggregators all at once. However, this segment of the sector has not taken off, according to finance research analyst Adam Cochran, who conducted a survey with 10,388 respondents and found that 93% of these respondents abandoned the use of automated trading bots after a month.
The survey showed that casual, active traders are more likely to use trading bots, but it is challenging for the rest of market participants to trust in the use of a trading bot. The quality of the bots offered in each service is questioned, and companies either provide a bot that is too simple, or too complex to use and understand. All these contribute to how at ease traders are in leaving their trading to a bot.
Other issues raised were bots not providing enough exchange options for aggregation, the bot being too technical and too high risk, too costly, and also just a lack of features for flexible and adaptive trading. The report also highlighted the lack of equal support across top exchanges in the world, with Binance supported by 83.3% of bots, 66% for Coinbase Pro, 41% for KuCoin, and Bitmex at 33%, just to name a few.
“At the time of the report, with 150 spot exchanges and 40 cryptobot providers, only 20 exchanges (1.3%) had coverage from at least one bot, and the average bot covered 7 spot exchange markets. This meant huge arbitrage for custom/private bots,” Cochran said.
There is no lack of demand for automation in trading, but the consensus reflected by the above survey states that current offerings are simply insufficient for traders to leave sustaining and earning wealth on their assets via trading bots. Users want to use a trading bot created by brands they trust and know and pre-built modular scripts.
The trick to popularizing trading bots is to find a balance between sophistication in technology and features, but simplicity in user functions. This is, however, incredibly difficult to achieve.
“I’ve found you either get set and forget bots with built in strategies (ultimately the desired product) which lose money….or very flexible bots where you can apply all manner of strategies that you just stop using as you can never find something that works long or medium term,” commented Twitter user MrSaltyBoi.
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