Trading Bot: What Is It For?

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Many novice investors and traders have heard of trading bots. But what are they and what do they trade? In fact, a trading bot is nothing more than software that communicates with financial exchanges.

They typically place orders to buy or sell an asset for you. Bots can make decisions about opening and closing trades. They also track changes in the market. But it is all done in strict accordance with the pre-established configurations and strategies that the trader has set up. There are also bots for trading crypto futures. But first things first.

History of trading bots

The very first trading bots can be said to have appeared at the dawn of the internet. They were quite simple and different from their descendants.

Their functionality was limited to tracking sharp price changes on the market, and then they sent a signal to the trader. The trader in his turn decided what to do with this information. Automated trading was out of the question, bots were not as advanced as nowadays.

The situation was aggravated by the fact that many people did not understand whether it was possible to make profit with the help of trading bots. It was not a question of how much profit bots can bring, but in terms of legislation it was unclear what bots can do. 

Due to the fear of breaking the law, many traders of the time simply refused help in the form of bots, thus many software developers abandoned their projects.

But soon everything changed. The United States Securities and Exchange Commission (SEC) has approved the use of trading bots during trading. This encouraged developers to return to projects and improve trading robots. 

Today, according to statistics, about 70% of traders and investors in the traditional stock market use trading bots. It makes you think that in the cryptocurrency market, this figure is probably the same.

Trading bot in the crypto industry

In the crypto industry, trading bots have emerged as well as many other things – they have moved from the traditional financial market. In that time, robots have become indispensable assistants to almost every trader. The reason is that they can be used for both automated and autonomous trading.

Automated trading is a way of trading where the trader does not have to be constantly at the monitor and watch the charts. The user can configure the bot as he or she pleases and set any strategy.

This allows cryptocurrency assets to be traded 24/7 and simultaneously with multiple trading pairs in different markets.

One of the leaders in the segment for creating trading bots is RevenueBot. With this service, anyone can create a new bot or buy an existing one. RevenueBot also has a rich knowledge base where you can learn about how the service works.

If you are new to the market and don’t know how to create a bot and select a trading strategy, you can turn to the service of a tutor who can help with any question.

Trading bots are called assistant traders, because they save the main human resource – time. In addition, robots exclude the human factor, which is important when you trade in the cryptocurrency market.