What Is Automated Cryptocurrency Trading?

What Is Automated Cryptocurrency Trading?

The world crypto market is like time, it doesn’t want to wait for anyone. The price changes happen fast, and keeping up with it is the key to success. 

Cryptocurrency traders work with numerous tools and strategies, which can get confusing at times, especially for newcomers. Luckily, crypto trading automation simplifies the process. These trading bots predict trends, analyze the market, and execute orders. Some of the best crypto trading bots include RobotBulls, 3Commas, Coinrule, Pionex, Cryptohopper, Shrimpy, Altrady, Vestinda, ArbitrageScanner, and Naga.

Automated Cryptocurrency Trading Overview

Automated cryptocurrency trading refers to the process of using trading bots to trade cryptocurrencies. It buys and sells cryptocurrencies on behalf of the trader, and performs other important things like predicting future market trends.

Crypto trading bots are computer programs, designed to react and analyse market changes. Using these bots for trading comes with many benefits. It doesn’t let trading get affected because of emotions and uncertainty.

Some crypto bots use smart contracts, enabling them to operate directly on a blockchain-based platform. It offers certain advantages that manual trading doesn’t.

Types Of Crypto Trading Bots

There are many types of crypto trading bots, and it feels mandatory to know about them.

  • Arbitrage Bots

Arbitrage bots are the most common bots, and they let traders buy assets at a lower cost and sell them at a higher price. These bots are developed to maximize trading profits, by comparing price differences of various crypto trading platforms.

  • Coin Borrowing Bots

Coin borrowing bots are used for determining the maturity rate of crypto coins in future trades. It helps traders make an informed decision on whether to borrow cryptocurrencies or not.

  • Market Maker Bots

These bots are trained to trade crypto coins and generate quick profits. Market maker bots analyze the cost difference between ask and bid prices, and they execute a trade based on that information. These bots help deepen the order book and market order.

What To Choose A Crypto Trading Bot?

Crypto trading bots make profitable transactions, doing what they are designed for. Investors analyze the market conditions and curate strategies accordingly. 

In some cases, crypto bots need manual interference, especially if the market condition changes suddenly. This is the reason to recalibrate crypto bots. The crypto bots’ strategies and goals are predetermined by investors.

Crypto trading automation is a great option for newbie traders and beginners because it requires minimum effort. Once the trading bot is put to work, it will execute transactions on the trader’s behalf.