Research: Do BOTS really act better than people?
Professional cryptocurrency traders have known it for years; bots invest better than people. That's why RevenYOU has developed the BOTS app so that you too can automate your trading. The question that remains is: are the professional traders right? To answer this question we will compare the returns of the AEX and four bots during the first quarter of 2020 and the week of 11-15 May.
The AEX opened on 2 January at 612.87 points and closed on 30 March at 512.92 points. This means that the AEX was down 99.95 points overall, a drop of 16.31%. In the same period, the Bots have of course not been idle either. I have used bots from multiple builders to display a detailed and extensive image. The Bots originate from Boosting Alpha BV, Altrading BV and Team QVA Trading BV, Amsterdam. These four bots separately achieved an efficiency of 51, 13, 36 and 13% over the first quarter of 2020. A small calculation shows that the average efficiency of these bots amounts to 28.25%. The returns achieved by the bots are many times higher than the negative returns of 16.31% achieved by the AEX in the same period.
The bots outperformed the AEX index in the first quarter of 2020. Were the bots able to maintain their high yield in the week of 11 May, or did the AEX recover from the shock of the coronavirus? The AEX opened on 11 May at 522.95 points and closed on 15 May at 499.45 points. The AEX made a drop of 23.50 points, which means a negative return of 4.49%. During the same period, the bots achieved an average yield of 7.06%. Once again the bots achieved a higher efficiency than the AEX. However, the difference is considerably smaller than the difference in the first quarter of 2020.
Looking at the above figures it can be concluded that professional cryptocurrency trading is right. But why do Bots invest better than people? As is generally known, people need peace of mind in order to get maximum results. On average, people already need 7 to 8 hours of sleep per day. A bot does not need this rest and therefore bots can continue to invest. A bot therefore makes a 'working week' of 168 hours, where the average Dutchman works 40 hours a week. In addition, bots are great at arithmetic. They can look up data, calculate numbers and view millions of fact-based options and return the best option within seconds. In other words, bots process data and numbers faster than the human brain.
Of course there are many more factors that play a role in the conclusion 'Bots trade better than Humans'. Janny Kul from Credium, for example, has written a blog in which he gives a few examples of why bots are better at trading than people. He discusses, among other things, the consistency of a bot and the built-in back testing of bots in order to argue the thesis.
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