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What are the risks of trading with a bot?

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1. Trade risks in the spot market
A negative result of the work of bots on a spot market can be attributed to the fact that the price of the traded cryptocurrency has changed a lot and for a long period of time. As a result, all insurance orders were executed, and it turned into the situation of an "investor" waiting for the price to return to a level where the bot will be able to complete the cycle with a profit. It turns out that the value of the original deposit allocated to the bot was reduced by buying an asset that was too expensive during a prolonged and severe price drop (the LONG algorithm), or by selling the asset (the initial deposit) too cheaply in a prolonged and high price increase (the SHORT algorithm) and now one must wait for the desired price to return.
The "investor" situation can be the result of too aggressive bot settings as well as a wrong choice in the trading pair.
For detailed recommendations on how to reduce trading risks as well as on what is the trading strategy that best suits RevenueBot, please read here.

What do you do when you’re in the "investor" situation?
This situation is not to be feared:

  • Usually, the desired price will return if a good cryptocurrency is chosen for trading. A price fluctuation of +-30% is essentially the norm, so do not use the percentage of overlap of price change (Overlap of price change %) of less than 30-40%.
  • You can calculate the price of the final order cycle in such a way as to exit from the trade with 0% profit or with a small minus. We have a convenient calculator of profit for such cases (a control button in the menu for bot statistics and control "Move take-profit order").
  • You can use the resulting cryptocurrency to start trading in the other direction (by reversing the bot’s algorithm), so that the deposit does not stay idle until the desired price returns in order to exit the original trade with a profit.

2. Risks when trading on the futures market with leverage.
The main risk when trading futures with leverage is the elimination of the entire margin balance in the futures wallet in your exchange account (receiving a margin call).
You need to use money management and assess the bot’s settings so that this does not happen.
Read more about how to reduce risks when trading futures with leverage here.

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