Crypto trading bot is a set of computer programs or software that picks trends and trades on financial markets for the user. They complete the trading process; hence simplifying work for traders although they are not entirely perfect.
There are various types available for both the novice and experienced users; however, even the most popular crypto trading bots vary in profitability, usability, and quality, so the user needs to come up with a trading strategy and the method applied.
How do Trading Bots Function?
Crypto trading bots talk directly to Exchanges and automatically place selling orders for the clients.
By observing market prices and movements, they decide on actions to take.
Crypto trading bots work in different ways, some through OS clients, browser plug-ins, trading servers or those infused in crypto exchange software. Some are available with no costs, and others can be bought or rented as well.
Regarding a trading strategy, some use EMA- Exponential Moving Average as starting point; it tracks markets over a stipulated time and bots are programmed to react to the change in price or react when the price moves beyond a certain threshold.
Bots like DEMA- Double Exponential Moving Average, TEMA- Triple Exponential Moving Average respond more quickly than EMA-bots.
Other bots have reliable indicators and analyze regression. This can be useful considering how unstable markets can be.
CryptoTrader, as an example of a bot market platform, allows people to either rent or sell to others their developed bots that utilize different trading strategies.
In the Bitcoin exchange community, customers often get direct market access (DMA), and investors typically have access to exchanges’ electronic order books.
To efficiently use trading bots, traders need a bot trading strategy, and they should understand that trading at crypto exchanges does not rely solely on technical analysis. Bots cannot read underlying market conditions and trends like rumours and market forces that are a basis for price changes.
Examples of Crypto Trading Bots
Butter-Bot allows clients to trade via Google Chrome plug-in.
Haas Online is a Windows-based personal trading server. It works on Bitfinex, Bitstamp, Bitmex, Gemini, Huobi, Kraken, Nova Exchange, OkCoin among many other exchanges.
