The original question here was: How risky is Bitcoin and if this currency is traded by Robot, do you think it is still very risky.
GBG: So here is the two-part answer.
Bitcoin trading is very risky.
Cryptocurrency is very volatile because the major factor affecting it’s price is speculation. We saw this in cryptomania last year, where the price spiked significantly then dropped as a flurry of traders rushed in and then got stung…
Bitcoin, however, could be described as a slightly more stable cryptocurrency for traders as there are on exchange futures contracts provided by the CME. Which means that banks and institutions can trade and hedge positions. But as an unproven asset class with limited liquidity and providers, it will still be more volatile than other established currencies.
So, yes, Bitcoin trading is very risky and you should go into it with your eyes wide open and accept that you are taking massive risks and may lose all your money very quickly.
The second part of the question was about crypto robo trading.
Bitcoin Robotraders are pretty much all a 100% scam!
There is a huge amount of misleading marketing out there and the majority of it advertises high returns for doing nothing. This is of course a scam and should be avoided at all costs.
There are lots of robo trading programs developed for Forex and Index trading through MT4 brokers, but to be honest, I’ve never seen one available to private traders that has generated returns in the long run, or even the medium term.
They are all based on highly liquid markets with tight spreads and are based on recognising charting patterns. However, the more volatile a market, the less effective they are. And as cryptocurreny is very volatile and has wide spreads, crypto robos are very ineffective (that is of course if they are not a complete scam to begin with)
If you are interested in robo trading, read Flash Boys by Michael Lewis, it will give you an insight to exactly how complex automated trading is and highlights exactly how improbable successful cryto robo trading schemes are.
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Richard founded the Good Money Guide (previously Good Broker Guide) in 2015 and has been a broker for 20 years most recently at Investors Intelligence and previously a multi-asset derivatives broker at MF Global (Man Financial). Richard started his career working as a private client stockbroker at Walker Crips and Phillip Securities (now King and Shaxson) after interning on the NYMEX oil trading floor in New York and London IPE in 2001 & 2000.