How to tell when a trading bot is a scam

[Superalgos]

Good piece here:

Crypto Trading Bots: How to Choose the Right Platform

This is my take...

Be extremely careful if:

- They tell you to upload your exchange keys to their online bot.

It's an outright scam if:

- They ask you to transfer funds.

- They tell you their bots are profitable without an audited track record.

- They tell you it's easy and that you can make money while you sleep.

- They tell you that you don't really need to know anything about trading, coding or even crypto!

[Maus0728]

Be extremely careful if:
- They tell you to upload your exchange keys to their online bot.

It's an outright scam if:
- They ask you to transfer funds.
- They tell you their bots are profitable without an audited track record.
- They tell you it's easy and that you can make money while you sleep.
- They tell you that you don't really need to know anything about trading, coding or even crypto!

All of you mentioned are indeed facts. But honestly, even some scam bots can also be successful without doing those. How? They could just simply let you run their bot for free while could silently take your info on the background -- which can be way worse than getting your funds and/or be used/sold for certain reasons. Also, there are bots that can be scam in disguise - by simply letting you use it with trial mode then have successful trades then takes requires you to pay big right after and be unfunctional.

Therefore, it is really risky to engage with bots regardless of it being new or even with a little "online" reviews and positive reputation. It can still be hard to assure how can one bot be really helpful and functional without silently taking any funds nor information from you. Manual trading is still the best option, as you can have diversity of plans that could depend on both technical analysis and current situations.

[Viscore]

Stay away from trading bots. This is the only way it saves you from being scammed. 

If we have noticed now, a lot of people promoting their trading bots, showing good reviews, asking you to have some try, and you are making good friends with them. These people will find a way to trick you unnoticed, this is a common issue, and we just realize once problems arise.

Thus, as @Maus0728 said, manual trading is the best option, I could justify that one. In fact, I'd never heard successful trading saying they are using a bot to trade (or maybe I miss something, just let me know).

[thecryptogandalf]

I am using bots for a while and through my search for a realiable platform  those were the main criterias I cared about. Now I am using a platform for bots and all I had to was just sign up with my email. Actually, I do respect the work they are doing. They just offer you the service of creating your own custom bots. So you dont just use a bot that someone created and let the money rolling(which is not almost in every cases). Second thing they put emphasis on disclaimer about high risk warning. Everything is transparent and they show their platform in a realistic perspective not wrapped with lies.

Last thing I really like the content they have on their blog. So if you find a good and reliable platfrom and know the concept and mentality of bots then bots are really useful. People think like  switch on the bot and let it do the magic. Bots are just a tool for your trading skills and if you will know how to use, I think it has a great advantange.

[beerlover]

I could argue against just one of these. You "can" make money while you are sleeping, that is what bots do, they are online 7/24 so they may make a profit while you sleep.

It is not easy, but you can actually do profit while asleep, however all others are definitely scams, I know because I was a customer in many of them, I like the trading bot idea so I bought bunch of them, tired a lot of them and I can tell you there are decent ones and there are very bad ones, there is no great one because if you are not a great trader (I am not) that means no matter how "great" the trading bot is, it is useless in your hands, you need to first understand trading before you can make a profit.

If anyone keeps keys online, that is bound to get hacked so that is bad, no transferring funds so far within 10+ bots I tried so that is really not a case even in scam ones, but yeah scams are rampant around here.

[Sterbens]

Be extremely careful if:

- They tell you to upload your exchange keys to their online bot.

It's an outright scam if:

- They ask you to transfer funds.

- They tell you their bots are profitable without an audited track record.

- They tell you it's easy and that you can make money while you sleep.

- They tell you that you don't really need to know anything about trading, coding or even crypto!

yes I agree with the points you mentioned, and as a trader I have to have my own principles in managing my finances in crypto, and my big responsibility is when I reject the bot trading offer. to be honest I prefer trading alone rather than using bots, the reason is simple, for me trading bots are never up to my trading principles. In addition, indications of inevitable deception lead me to believe that trading with my gut instincts and knowledge, is much more effective and efficient.

[sheenshane]

I tend to agree with those mentioned by OP above, but IMO, I'm not against this auto trading bot, they will remain as a helpful tool in trading with proper use on it.  Why you've used a trading bot that didn't well known, didn't have a reputation, and most especially have a free service offer or very cheap subscription, they will most likely scam.

Actually, this auto trading bot tool has pros and cons that we must be considered before using it to avoid being a scam of course.  The cons might you will have a problem if you didn't aware this like, mechanical failure or system error and might be performing poorly.

However, I will not suggest if new traders will use the trading bot, which is very risky for them how to operate and this might lead to a scam.

[ethereumhunter]

You do not have to curious about that bot. What you need is the confidence to learn more about trading to improve your skills, and you will have a chance to make a profit. I am sure we can do that if we have an effort to learn because if we can have good trading skills, we can trade manual without the bot, and of course, we will have the opportunity to make a profit. The bot can work for us only if we know how to operate it, but we still need to watch the bot trade, and we need to know when we must change the strategy.

[dunfida]

Stick with known ones and dont tend to make use of those bots that had just been suggested by some random guy on the net or you dont even
know on whats the source of those bots.If you arent really good on checking things then you can anytime ask out the community.
Bots are for automation and there's no other purpose other than that.

[BrewMaster]

you are just covering the obvious cases of scam bots. there are more sophisticated ones that don't need to rob you to rob you!

for example a while ago there was a bot that was being sold to people with the promise of huge returns and a lot of fake stats. the owner simply made money by fooling people into buying his useless bot while the bot wasn't doing anything malicious, it was just useless because it failed the moment bitcoin price went up (keep in mind this was during the downtrend).

[AakZaki]

you are just covering the obvious cases of scam bots. there are more sophisticated ones that don't need to rob you to rob you!

for example a while ago there was a bot that was being sold to people with the promise of huge returns and a lot of fake stats. the owner simply made money by fooling people into buying his useless bot while the bot wasn't doing anything malicious, it was just useless because it failed the moment bitcoin price went up (keep in mind this was during the downtrend).

They only aim at promoting junk bots saying it has lots of features and can make money automatically easily. the people to target are people who do not understand technically about trading and beginners who want to get fast money the easy way. They are the right target. Such useless bots are valued at high prices and some are priced at low prices.

[teosanru]

I think one should never ever buy trading bots. If you are too keen on bot trading it's better to get one tailor-made as per your requirements from a developer who regularly develops a trading bot. About the trading strategy part, you can easily find a good working strategy on youtube. When it comes to trading it's all about discipline, traders can make profits out of any given strategy it's just about maintaining the right mindset and discipline which is slightly difficult in human trading so bot makes your life easier in that aspect. But make sure you get the code audited too. All in all it would prove to be cheaper than all the subscriptions including fake subscriptions that you purchase on the name of trading bots. If there would have been any readymade recipe for earning money no one would be sharing it for $100 a month.

[Ryker1]

Stick with known ones and dont tend to make use of those bots that had just been suggested by some random guy on the net or you dont even
know on whats the source of those bots.If you arent really good on checking things then you can anytime ask out the community.
Bots are for automation and there's no other purpose other than that.

Well, you have a point there, I saw that there is a reputable and long time running service bot. Perhaps that is good to use not that you did not know.
Bots are helping the traders but this bot will not work on its own, --so on my own, bots are still useful in trading, but we must be careful on how to use this bot. Always add a second security level in your account in exchange if you are using a bot, just like enable the 2FA upon having withdrawal of fund, so if there is a glitch of the bot, transferring fund will be rejected.

[nelson4lov]

Good piece here:

Crypto Trading Bots: How to Choose the Right Platform

This is my take...

Be extremely careful if:

- They tell you to upload your exchange keys to their online bot.

It's an outright scam if:

- They ask you to transfer funds.

- They tell you their bots are profitable without an audited track record.

- They tell you it's easy and that you can make money while you sleep.

- They tell you that you don't really need to know anything about trading, coding or even crypto!

One of the reasons why I've always steered clear of trading bots is the fact that a large majority of them usually turnout to be scams. I don't know about other exchanges but on Binance, you can actually determine the permissions for your account's API keys. I don't really know if the bots can get around it as Binance was hacked sometime in 2019 and I think it had something to do with users API keys but I'm not 100% sure.

you are just covering the obvious cases of scam bots. there are more sophisticated ones that don't need to rob you to rob you!

for example a while ago there was a bot that was being sold to people with the promise of huge returns and a lot of fake stats. the owner simply made money by fooling people into buying his useless bot while the bot wasn't doing anything malicious, it was just useless because it failed the moment bitcoin price went up (keep in mind this was during the downtrend).

At the end of the day, these bots are just a waste of time. If the bots are even legit, they might run your account to the ground with mediocre trading strategies. It's better to take time to learn trading even though it's time consuming and stressful.

[crzy]

If you’re going to use BOT better to use the most trusted one because you really have to give the details of your exchange account so they can do the trading for you. If you think that BOT is a scam then don’t use it, I suggest if you want a worry free trading bot, you go for Gunbot.

[adaseb]

The reason they don't work is the most obvious. If they worked, why would the creator be selling it for $50/month when they can just trade it with it themselves and make profits instead? These days there are high leverage futures where if you got like $1K you can easily trade up to $125K. So since so little capital is required, why doesn't the bot creator just trade himself on high leverage and eventually would make 5 or 6 figures. Probably alot less work than having to deal with finding members to buy the memberships for the bot.

I used to back test alot of these bots back in my forex days. In the end they are never reliable. I find that they either work in trending markets or only in sideways markets. Since you have no idea what kind of market we are in, then you might use the wrong strategy and end up losing money. Another way they aren't reliable is slippage, when you back-test you cant take into account slippage which is real when you are trading live.

[boyptc]

I don't use bots but it's an obvious thing if they ask you to import your private keys to their bot. That's already a red flag that you shouldn't do. No app should ask that important thing to any of their users unless they're the ones that are providing it for you.

[DoublerHunter]

I don't use bots but it's an obvious thing if they ask you to import your private keys to their bot. That's already a red flag that you shouldn't do. No app should ask that important thing to any of their users unless they're the ones that are providing it for you.

^ A private key? Who holds the private key on exchange anyway? It is through your API.
Nah, not that way, but there is a potential that automated trading software or trading bot is a scam. Just a simple question, what is the reason why they are selling this bot besides if they will truly earn from using a bot in trading. Probably the owner or creator of bots are very rich as of now, you cant buy a trading bot system as low as $30 right?

[Kittygalore]

Stay away from trading bots. This is the only way it saves you from being scammed. 

If we have noticed now, a lot of people promoting their trading bots, showing good reviews, asking you to have some try, and you are making good friends with them. These people will find a way to trick you unnoticed, this is a common issue, and we just realize once problems arise.

That really depends because not all trading bots are not a scam, there are bots out there that are open source and you can tweak them to make them behave how you are trading. I wouldn't say that to altogether reject the idea of trading bots but being open but cautious in my opinion is the best thing to do so as not to let opportunity slip right past, I do agree that some shilled bots are suspicious but if you look hard enough, you can see that there are a lot. For me, if bots were doing trades that profit me, then I will welcome them because it provides convenience.

[boyptc]

I don't use bots but it's an obvious thing if they ask you to import your private keys to their bot. That's already a red flag that you shouldn't do. No app should ask that important thing to any of their users unless they're the ones that are providing it for you.

^ A private key? Who holds the private key on exchange anyway? It is through your API.
Nah, not that way, but there is a potential that automated trading software or trading bot is a scam. Just a simple question, what is the reason why they are selling this bot besides if they will truly earn from using a bot in trading. Probably the owner or creator of bots are very rich as of now, you cant buy a trading bot system as low as $30 right?

I'm only reiterating the exchange given by op. It is a fact that there are scammers that are using the words "automated" and "profit" with regards to the usage of bots.

And newbies that don't have an idea how it works are likely going to believe that they have legit software that can make them money which they consider a money making machine.