What is Bot Trading?
Most cryptocurrency traders have used manual methods to buy and sell the cryptocurrency of their choice, however as of 2018 this is beginning to change.
The use of automated trading programs known as bots is become more commonplace in the cryptocurrency world. Traditional markets have been using automated trading for decades, so this use of bots isn’t new, it is just new to cryptocurrency trading.
A bot works by following the criteria that has been set by the trader to trigger buy and sell decisions. Some have argued that bot trading can introduce unneeded volatility into markets, especially around critical areas where many different bots are triggered by certain criteria.
This has been seen from time to time in traditional exchanges, when certain levels are reached and a large number of bots are triggered to buy or sell at the same time. Advocates of bot trading insist that the market provides equilibrium eventually, even during periods of extreme volatility.