Crypto trading without emotions, or how trading bots work

Trading bots are a popular and effective tool in crypto trading. It automates the trading process and minimizes investor intervention. We will tell you how such bots work and what their advantages are.  

Cryptocurrencies provide many opportunities for earning money. Someone buys coins and holds them, hoping for multiple growth (holding). Someone invests in equipment and mines them using computing power (mining). Someone buys and lends it at interest (landing). There are other options.

But one of the most popular was and remains trading - trading cryptocurrencies in real time. Traders are attracted by the high volatility of this market, which makes it possible to make much greater profits compared to other trading assets (although it also carries increased risks, which are also worth remembering). But trading is not an easy and largely routine job. To make it easier, there are tools such as btc 6.0 avage and special trading bots.

What are “trading bots” and how do they work?

A trading bot  is a program that monitors the market around the clock and automatically makes trades on behalf of the user or simply recommends that the user do so. She monitors the market and decides when to enter and exit it, based on how she is configured. In other words, this is software connected to the terminal that automates work with the market and takes on most of the trader’s routine work. The goal of the bot is the same as that of any trader - to buy crypto cheaper and sell it more expensive.

Bots that are used in crypto trading can be divided into two main types:

Followers are those who monitor the market and give recommendations on opening/closing transactions. The trades themselves are carried out by the trader at his own discretion.

Automatic - programs that operate completely autonomously. They independently open and close transactions, without the participation of a trader.

Both of them can be either easy-to-use software with a minimal set of settings, or more advanced programs with flexible settings. The latter are more suitable for experienced traders who can “adjust” them to their strategies.

This is how a simple trading bot that uses a grid trading strategy works. For example, a trader configures it to place buy orders for L itecoin  every $5 below its current price, and sell orders every $5 above it. That is, a grid of orders is created with a gradually rising or falling price. The program will automatically buy a coin every time its price drops to the desired level, and sell it if it rises. That is, it will take on the routine work of placing orders at the specified prices, saving the trader from it.

The algorithm can be much more complicated. Smart bots can take into account dozens of factors when placing orders: indicators, market data for the period, changes in the exchange rate and other conditions.

Advantages of trading bots

There are enough of them:

• The main advantage of using such programs is that they can save the trader from routine and eliminate the human factor from the trading process.
• Bots, unlike people, trade without emotion or fatigue. Trading is a skilled, complex job that requires knowledge and skills. Anyone who is engaged in it seriously and is focused on results is forced to devote a lot of time to this activity. Therefore, traders become physically and psychologically tired, which can affect trading results. Bots do not have these disadvantages.
• They constantly scan the market, see and take into account even information that a trader might have missed while outside the market.
• They can simultaneously work with a large number of assets, while a trader, in order to make a balanced, reasonable decision on a transaction, can pay attention to only one (or several).

Where to get a bot for crypto trading

There are 2 options: do it yourself or use a ready-made solution.

Obviously, the first one is suitable for people familiar with programming. Bots are written for specific exchanges, which provide developers with their API - a software interface containing information about trading and the functionality of the site. The code can be written by the trader himself or hired by other people. Both require time, effort and possibly money.

It’s much easier to use a ready-made solution. There are free bots. Their obvious advantage is that you don't have to pay for them. But there are also risks associated with them. After all, the user cannot be sure that there is no “bomb” in their code and the bot will not suddenly, for example, transfer all earnings to the accounts of those who wrote it.

Perhaps the best option would be to use ready-made solutions, but from proven platforms. Platforms that value their reputation and want to develop do everything to ensure that their clients can trade safely and  comfortably. Bots are one of the tools that allow this.

Conclusion

Trading bots can make a trader’s life much easier. Of course, you shouldn’t place high hopes on program trading alone. Using bots is not passive income. Trader intervention will still be needed. And before using them, you need to understand how the market works and the algorithms that are embedded in them. Well, and most importantly, the bots must be from a site with a reliable, proven reputation. This is the only way to be sure that they do not contain malware.