What Are Trading Bots?
Understanding Trading Bots
We can start by simplifying it even further and just identify what is a bot in general. Put simply, a bot is an automated program that operates on the internet and generally performs repetitive tasks more efficiently than humans.
Crypto trading bots operate under the same basic principle. They are software programs that execute buying and selling functions based on preset parameters. This allows traders to take the emotions out of trading or miss an opportunity for a trade.
Crypto bots allow you to automatically buy, sell or hold an asset in an automated manner, regardless of time of day or market conditions, if your bots preset parameters trigger, so will your buy/sell position.
One common misconception about bots is that you will get rich quick or every trade made will be a winner. Just like with any trader, nobody is hitting 100% of the time. Another common misconception is that all bots are created equal or do the same thing. Each bot is created with a different set of parameters or based off different indicators or trading patterns. You want to make sure before jumping into a bot that you have previous results of the bot so you can get an expectation of how the bot will perform, how many trades it makes and how often.