Dependence on automation: Bot performance relies on their code and parameters, and a poorly designed bot can result in inaccurate signals and financial losses.
Technical glitches: Bots, like any software, can suffer technical issues, impacting portfolio outcomes during important trades.
Limited adaptability: Some bots have a narrow range of strategies, making them less adaptable to unforeseen market conditions, potentially leading to subpar performance.
Absence of human intuition: Bots lack human intuition and cannot respond to unexpected factors, potentially leading to suboptimal trades or missed opportunities.
No guaranteed profits: Trading bots are not profit guarantees; success depends on parameters, market conditions, and code quality, requiring risk management, awareness of limitations, and readiness for losses, with diversification and responsible investment as risk mitigation tools.