Trading bots have been around for almost half a century. During that time, they have made their way into the financial world and have become the best assistants to traders around the world. Of course, at the beginning they were quite simple. They used to send signals to traders that the price of an asset had changed. After that the person did the rest of the work. Trading robots have evolved with progress. They have become increasingly sophisticated and nowadays a person can do automated trading instead of following price quotes at all. So what is a crypto-trading bot, what is it for and who uses it?
What is a trading bot
A trading bot or trading robot is software that interacts with the financial markets. The first bots originally appeared in the traditional stock market. But traders did not fully understand whether it was legal to use them. Doubts were dispelled in the late nineties, when the US Securities and Exchange Commission (SEC) gave official permission for trading bots.
When the cryptocurrency market came into existence, it was still a matter of time before the assistant traders moved into a new space. And so it happened, now virtually any top cryptocurrency exchange has the ability to automate their trading with software.
Trading robots may seem to be trusted by a small proportion of traders, but this is not the case. Statistics show that bots are used by almost 70% of traders in the stock market. Hence, we can conclude that the percentage may be the same in the cryptocurrency market.
The popularity of bots is due to the fact that they can be used by an experienced trader as well as by a newcomer to the market. It is just a matter of mastering them. However, almost anyone can master the trading bot and put the right settings and configurations. As a rule, a normal service will have a detailed instruction on how the trading bot works, how to configure it and set the right settings to suit you.
Why do you need automated trading?
Automated trading greatly simplifies a trader’s life. If you trade manually, you should always be as attentive as possible, because you might make some silly mistake which will inevitably lead to losing your deposit.
Also, a person should vitally need to rest and sleep. If you do not take the time to sleep, you may start having problems with your nervous system and it will also have a negative impact on the trading.
Trading bots need no rest and neither can they make human errors. The entire trading process takes place according to a predetermined trading strategy and configurations that the trader has set up.
An added advantage of trading bots is the fact that they are multitasking. You can trade several trading pairs in different markets, and the bot will be able to do it, while a human could not do it perfectly.
In addition, services offer to buy a ready-made bot with proven configurations. This is a good option for those who do not want to spend a lot of time figuring out the settings.
