Crypto and other forms of digital trading are some of the most traded entities when it comes to the total performed exchange from around the world. Especially cryptocurrency, this entity has been the source of generated wealth and storage of value for investors and other individuals.
The automation strategy of the trading process is quickly taking over the market. Interested parties are looking for opportunities such as automation of the trading activities to outperform the market.
The automation process is possible through the existence of the products we will discuss in our trading bots guide. Understanding how these trading bots can be useful to your trading experience is crucial.
So, What Is A Trading Bot?
When it comes to everything that concerns cryptocurrency, a trading bot is a computer program that is used to initiate exchanges automatically. This completely gets rid of the manual input of each trades while using the exchange. The written trading bot is programmed to access the data gotten from a user account to trade.
The automation process that is in play with the bots carries out specific pre-programmed trading strategies. The strategies are encoded in algorithms that are made by the software developer with precision and speed in mind.
Automation Process of the Bots
The basic idea behind cryptocurrency trading bots is automatically accessing data on an exchange. This data is useful to a user’s indirect trading of the cryptocurrencies on the exchange platform. The user authorizes the bot to trade for them by providing the API attached to their trading user account.
The API secret key is also needed for the access of the cryptocurrency on the user’s account. With both information with the trading bot, it can automatically carry out automatic trading activities on behalf of the user.
Key Components Needed For Trading
- API Keys
API keys are one of the important components needed to access the data and use certain features in exchange. With the API keys made available, the trading bots can gain access to the recent and relevant information for the implementing user. The only time the trading bot has complete access is when the user grants explicit access by providing the API keys.
- API Key Settings
There are different settings associated with the API keys. This controls the amount of data made available to the bots. The main settings required the various trading bots includes Balance and Trade capability. These two parameters should be made available to the trading bots.
The Goal of Cryptocurrency Trading Bots
The main purpose of using cryptocurrency trading bots is to automate the trading process. It is also useful in reducing time-wasting and minimize complexity. With these trading bots, the implementation of the useful data gotten from the exchange is guaranteed.
When To Use Cryptocurrency Trading Bots
There are different bots for different purposes. There are those for data collection, portfolio management, balancing and rebalancing, smart routing, and so on. The best part is, they are working and providing their services all hour of the day.
To Wrap It Up
The use of cryptocurrency trading bots provides you with one of the best options to get the best yields from your trading activities. This is due to their high level of precision and the reduction in the complexity of the data gotten from the exchange platform. The automation of this process has made it easier and faster for trading parties.