What is a cryptocurrency trading bot and why do you need one?

What is a cryptocurrency trading bot and why do you need one?

March 9, 2022 0 By Maxim Hayden

A trading bot is a piece of software that can automate a trader’s buy and sell orders, limiting the manual intervention that is needed, and the time spent on monitoring, to make these trades.

It’s estimated that over one-third of all trades are currently made using a bot, showing that investors who trade manually are truly in the minority.

While bots can execute orders, they should not be seen as a substitute for a solid investing strategy and are by no means a ‘get-rich-quick’ solution. Continued groundwork, in terms of the time and effort required of any investor, is still needed when it comes to putting a bot to work.

A bot can be used by every type of investor, whatever their strategy is. Whether it be for grid trading, combo trading, auto trading, DCA (Dollar Cost Average) trading, or accumulation trading.

Bots have been used as early as the Mt. Gox days, back in 2014, for buying and selling Bitcoin (BTC), with the intent of making a profit.

However, as time has gone on, and more coins have come to market, bots have been developed to work with these other coins. Whether it be Ethereum (ETH), Litecoin (LTC), Ripple (XRP), Dash (DASH), Doge Coin (DOGE), Ethereum Classic (ETC), Stellar Lumens (XLM), or Bitcoin Cash (BCH), a number of the bigger coins can also be traded with the aid of bots.

With this said, although most of the bigger coins are covered when it comes to trading with bots, there are a lot of the coins with a smaller market cap that can’t be traded this way. This is because bots are designed to only work on certain exchanges, and no exchanges list every coin, even behemoths such as Binance or Huobi.

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If you aren’t a programmer and don’t think you have the expertise to develop your own trading bot, this isn’t an issue. There are a number of platforms out there that give access to a plethora of trading bots, whatever your needs. Bots can either be obtained for free, with a number of limitations in place, on a fixed monthly or annual basis, or on a pay per transaction basis.

Our partner, BOTS.io has everything you need to get started with trading bots, whether you’re a programmer, or you want to use a tried and tested bot, that’s already ready to go.