Cryptocurrency Trading Bots: What Are They?

Cryptocurrency Trading Bots

The rise in the value of cryptocurrencies in 2017 attracted many new players to this market, seeking to get rich quickly. Some of them managed to earn, but most suffered losses. A cryptocurrency trading bots is a tool that will help reduce risks and achieve a stable result when used systematically.

A bot is a program configured to perform repetitive actions in the virtual world. It performs mechanical and monotonous work for a person. Cryptocurrency trading bots generally don’t differ from others: they automatically trade on exchanges following the specified parameters.

Bots buy a cryptocurrency when the exchange rate falls and sell when it rises. Since many people trade cryptocurrency passively and can’t devote enough time to analyzing the market, bots allow users to trade more efficiently without always being aware of what is happening in the market. By the way, you can try working on stoic.ai. The app works like a cryptocurrency trading bot. Thanks to it, you don’t have to constantly log into the exchange, follow crypto signals, or monitor the cryptocurrency rate. It uses quantitative research and artificial intelligence to create and balance a portfolio of crypto assets.

What Can a Cryptocurrency Trading Bot Do?

The main functions of bots for trading on the cryptocurrency exchange are:

  1. Manage risks. It is one of the primary purposes of trading bots. You set the range for the bot to operate and protect your balance. It uses volatility statistics and profitability indicators and automatically conducts risk management.
  2. Buy and sell cryptocurrency. It can place orders when the asset reaches the appointed price. It is no secret for prominent market participants that it is difficult to load a significant volume position with market orders at a favorable price. But placing a large limit order is fraught with risks. The bot can buy up and dump the asset gradually.
  3. Multi-platform. Connecting to several exchanges, bots can trade on them. So it finds better price offers, and the possibility of arbitrage opens.
  4. Notification. All actions are recorded in the database and displayed in a table or graph. Notifications about selected events are sent to the client mail or Telegram.
  5. Market analysis. It collects information via API from several sources on selected assets, saving them to the database and then displaying them in a convenient form. It uses machine learning algorithms to predict price movements.

Bots for cryptocurrency exchanges are a valuable tool for traders of all levels. Beginners can try social trading, increase their capital according to someone else’s ready-made strategy. Bots don’t require you to launch your server. All transactions take place on a regular website in a dashboard. The balance is protected: the API key is assigned the rights to trade only, and there is no risk that a bot will withdraw the cryptocurrency for itself.

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