Advantages of Using Bitcoin Trading Bots
Due to the volatility of the market today, trading bots are now becoming more popular to traders because it allows them in remaining control of the trading all the time and the advantage to where the bot does not sleep. Another thing is that bots which are correctly specified will be able to allow traders to be done more efficiently and much faster than trades that are done manually.
Trading bots are software programs which interacts directly with financial exchanges and places that buy or sell orders on your behalf, which will depend on the interpretation of the market data. Bots actually are the ones that will make the decisions through monitoring on the market price movement and in reacting based on the predefined and pre-programmed rules. Trading bots also will analyze market actions like orders, volumes, price and time, but they could be programmed to suit your very own taste and preference.
These trading bots also have been popular for so many years in different conventional financial markets. However, it was not traditionally available before for any average investor because it actually costs a lot of money. With so many people who have been trading bitcoin and unable to dedicate a lot of time in analyzing the market, the intention is that bitcoin allow the users in establishing more efficient trading without having to keep on the market all the time.
Trading bots actually work by reacting on the market. It will gather all of the necessary data that it needs to execute a good trade based with the analysis of the trading platform. In a cryptocurrency, trading platforms are only going to tell half of the story and there are in fact so many rises and falls which are being based on the sources which can’t be programmed for the analysis of the bot. The spread on the exchanges likewise have flattened, which actually means that opportunities on inter-exchange arbitrage are a lot lower than before.
There are a lot of trading bots that uses an exponential moving average (EMA) as its starting point in analyzing the market. EMA is then going to track the market prices over a set time period and bots can be programmed to react on what the price do such as moving on certain thresholds. Through the process of programming the bots, a trader can then set the thresholds on corresponding the risk appetites.
This simply means that trading bots works but is not necessarily for all. There’s also different advantages such as a constant interactions on the market as well as a non-insubstantial factor on removing the emotion of trading.