Does Bitcoin Trading Bots Work?
Because of today’s market volatility, trading bots are now so popular for traders simply because it allows them of remaining control on the trading for all time and gives them an advantage where the bot does not sleep even when the trader is sleeping. A bot that is specified properly is going to allow trades to be executed more efficiently and a lot faster compared to traders that are doing it 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. A trading bot could likewise analyze market actions such as volumes, orders, time and price and could be programmed in suiting your preferences and taste.
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 a lot of people today who are trading bitcoins and unable to dedicate a lot of time on analyzing the market, the intention would be that bitcoin allows users to establish a more efficient trading without being on top of the market at all time.
Trading bots in fact works by reacting on the market. It is going to gather all the data necessary for executing good trades which are based on the analysis of the trading platform. In cryptocurrency, trading platforms will only tell half of the story and a lot of rises and falls based with the sources which can’t be programmed to the bot for analysis. 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 in fact many trading bots which use an exponential moving average (EMA) as the starting point of analyzing the market. EMA will track the market prices on a set period of time and bots could then be programmed in reacting to what the price do like moving on certain thresholds. Through programming the bots, traders could then set the thresholds for corresponding on its 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.