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We all know that stock markets always close early but this is not with cryptocurrencies which never closes and sometimes become stressful to traders and investors. Imagine waking up to news that all your crypto investments have crippled overnight.
What would you do in such a scenario? Due to the volatility and the nature of such situations, there has been an uprising of trading bots which have become so popular allowing traders to control their trading. There are other bots that are developed to allow trade to be executed faster and more efficiently than what the trader would do manually.
With the explosion of cryptocurrencies in the world, there has been an influx in trading bots either for free from open source platforms or licensed to users. We will try and look at what trading bots are and whether they work for bitcoin trading or not. On a simple level, a trading bot will analyze market actions such as volumes, orders, price and time even though they can still be programmed to suit your needs. Can you imagine that trading bots have been popular for so many years though in other financial markets?
The only challenge that has been faced is that not so many investors have been able to access the bots due to the fact that they cost a lot of money. The crypto craze has enabled the world to witness a large number of people investing in various coins with the largest being Bitcoin. Bitcoin bots have been created to allow users to establish more efficient trading without having to keep on top of the market at all times. The cryptocurrency market has not matured yet like the financial markets but the nature of the market has meant that despite the fact that it is has had significantly less time to integrate algorithmic trading.
The technology is progressively catching up on its rival in terms of providing a trading bot service and hence investors accessing to a wide range of trading services. The nature of how trading bots work is easy, they simply work by reacting to the market. The bot gathers data in order to execute a trade based on analysis of the trading platform.
Many bots use what you call as an exponential moving average EVA as a starting point for analyzing the market. By programming the bots, the traders can set their thresholds to correspond with their risk appetites. The question as to whether trading bots work has one answer which simply is that they work. Trading bots offer a number of advantages which include constant interaction with the market and also removing emotion from trading.
What are trading bots? Types of Trading Bot Strategies The cryptocurrency market has not matured yet like the financial markets but the nature of the market has meant that despite the fact that it is has had significantly less time to integrate algorithmic trading.
Do Trading Bots Work?