A trading bot is a program that uses indicators to recognize trends in the price. Such a software program communicates directly with the exchange you use and makes decisions through the price movement. Typically, a trading bots analyzes market actions such as volume, orders, price and time, although they can generally be programmed according to your own taste and preferences. This can be a big advantage, because when you are trading yourself, you can be carried away in your emotions, after which you start buying or selling. Because many people passively trade Bitcoin and are therefore unable to spend large amounts of time analyzing the market, it is intended that Bitcoin bots will allow users to act more efficiently without ever having to be at the top of the market But you can actually see it as a disadvantage, because a trading bot does not take current events, such as news or elections, into account.
Trading bots work by responding to the market. It collects the data it needs to execute a
transaction based on analysis from the trading platform. With cryptocurrency, however, the
trading platform tells only half of the story, with many increases and decreases based on other
sources that cannot be programmed in the bot for analysis.
Many trade bots use what is known as an exponentially moving average (EMA) as a starting point for analyzing the market. EMA follows market prices for a certain period of time and bots can be programmed to respond to what that price does, such as exceeding certain thresholds.
The trade bots are particularly useful to make your work light, just like robots in factories. For example, consider the following situations:
It can be quite exhausting to stare at a screen all day long and analyze data. Moreover, it can certainly be tough as a starting trader to keep an overview. Or what do you think of the period that you sleep and are unable to analyze trends at all? In these cases it would be nice to have a little helper
In a world where everyone can enter the online investment market, but not everyone has the time and the desire to keep an eye on all trends, trading bots offer a handy solution to make work easier. However, trading bots are as good and successful as the institutions and the insight of his or her maker. In particular when used for a specific market in a specific period, they can create returns while the maker leans back.