Article Summary
The crypto industry emerged relative to traditional stock markets not too long ago. It’s no secret that much of what the crypto market has today was taken from traditional markets. This includes futures contracts, spot trading, leverage, etc.
Because of these similarities, many traders from the stock market are gradually moving into the crypto industry.
However, this is not all that has moved from traditional markets to crypto. Along with many useful updates, the trader’s helpers – trading bots – have also migrated.
Trading bot
Trading bots in the stock market have been around for a long time. The first ones date back to the seventies. However, at that time they were rather primitive. Traders used them only for signals during price changes on charts. After that a trader decided what to do with the asset, buy or sell it.
Of course, over time, robots became more perfect. Trading bots started to get more advanced features and algorithms. But not everyone wanted to use such a handy assistant. It was not quite clear whether it was legal to make profit using trading robots, so most traders tried to avoid bots.
All this continued until the late nineties. At this time, the SEC officially allowed the use of trading bots during trading. This permission gave a second life to trading robots and their developers started working harder and harder on new algorithms.
Since then, in the traditional stock market, more than 70% of traders have started using trading bots. The advantage of trading with a bot is hard to overestimate, as it works entirely according to a preconceived strategy and configurations laid down in it by the trader.
In the cryptocurrency market, trading bots are also in high demand. What is their convenience?
- Automated trading. The user sets in advance the strategy and configurations by which the bot will execute trades. A person can then go about their business, while the bot in turn trades autonomously.
- The bot can trade multiple trading pairs simultaneously and on multiple crypto exchanges. It would be quite difficult for a human to do that.
- The human factor is eliminated. Any trader can, at one time or another, make a mistake without even noticing it. And this mistake in its turn can bring losses to a person. In addition, people are prone to emotions and unreasonable actions, for example, during stress, which will surely lead to financial losses. In a bot, these factors are excluded.
- Trading without stopping. Sleep is vital for everyone. While trading, rest is especially important. Besides, it is necessary to devote time to family and friends and it is not possible to trade during these times. The crypto bot can continue trading 24/7 without interruption, which is undoubtedly one of the most important advantages of the robot.
