The stock market has been around for a long time. Traders and investors of different generations have come up with and continue to create different trading strategies in order to profit from their trades. The same thing is happening in the cryptocurrency market today. It’s no secret that much of what the crypto industry has today has been borrowed from traditional markets. This is how crypto trading bots have migrated.
What is a trading bot
The first ever trading bots started to appear almost simultaneously with the internet, namely in the early seventies. But as you can easily guess, at that time they were far from ideal. Bots reacted to abrupt changes of quotes and let the trader know everything else. So it turns out that trading robots of that time could not work independently, a person still had to watch the charts by himself.
Progress was slow and trading robots started to improve. They began to have new more complicated algorithms. But because traders didn’t know whether to legally use the trading bots and make a profit, only a small proportion of people used the robots.
Everything changed in the late nineties. The US Securities and Exchange Commission (SEC) gave official permission for trading with bots. After that bots began to spread.
Looking from a technical point of view, trading bots are software that works with financial exchanges. The robot can make its own decisions about whether to open or close a trade, but according to a prearranged strategy. As a rule, the trading bot analyses market actions, such as volume, orders, price and time. All the settings that the trading bot has, each trader adjusts as he or she wishes.
Automated trading
With the help of trading bots, users of any cryptocurrency marketplace can make their lives easier. According to studies, trading is one of those professions that keep people under constant stress. It is not surprising, because when you sit in front of the screen all day long and watch the charts, you don’t have time for yourself or your loved ones.
There are cases when novice traders are absorbed in their work and do not notice how their friends leave them. Of course, these are totally fanatical people; there are others who can separate their personal life from trading.
To prevent this from happening there is automated trading with the help of robots.
A trading bot can work 24 hours a day, seven days a week, and a user only has to monitor its activity from time to time. Of course, a lot depends on the preset configuration and strategy by which the bot will trade on the exchange.
Cryptocurrency trading bots
As mentioned earlier, trading bots have migrated from the traditional stock market to the cryptocurrency market. They are called the best trader’s assistants for a reason, because thanks to a robot, a person does not have to worry about his or her trades.
For example: you are a trader who left a position open overnight. What can go wrong? Actually a lot. A trade can get liquidated, close at a low take profit, etc. A cryptocurrency bot can give you the opportunity to mind your own business and save your main human resource – time, instead of watching the charts every minute. Also, if a trader sets the right quotes for the bot and sets a good strategy, the bot can trade more efficiently and faster than a human would.
It is logical to conclude that trading bots are really the best assistants on the exchange, it remains only to start working together with them.
