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There is no doubt that cryptocurrencies are highly volatile and that prevents traditional traders from taking any risk. Such an inability to make smarter predictions is one of the major roadblocks in the mission to make it mainstream.
Subsequently, crypto exchange software owners felt the need for a mechanism that would help investors in buying and selling crypto assets at the most appropriate time. To solve this dilemma, blockchain developers embraced artificial intelligence (AI) enabled apps that can take crucial decisions on behalf of investors. This mechanism is known as a crypto trading bot which is based on crypto exchange scripts.
A Crypto Trading Bot is a coded program that self-executes once a pre-defined condition is fulfilled. It analyzes the current market prices and checks them with the rules set by the investor. If the condition matches the criteria, it executes the transaction.
For example, if an investor wants to buy the cryptocurrency when its value goes below a certain level, the trading bot executes the transaction as soon as it reaches the downfall benchmark. It is still possible that the currency might go down further, but at least the investor will be able to buy the currency at the desired price.
Data processing at hypersonic speed
Cryptocurrency buying and selling decisions rely on current and historical data which requires analysis to determine the best time and place for the transaction. No human can calculate the data at such speed and they can miss the best opportunity to sell or buy. Crypto trading bots integrated into cryptocurrency exchange software solve this problem as they analyze the data and the trends at hypersonic speeds and execute the transaction at the best available value.
Since these bots are built on high-end analysis and use quality coding for predictive analysis, crypto exchange owners and investors can trust them. If an expert developer is involved in building these crypto bots, they deliver a seamless experience and accurate results.
Since the bots are built on rules and conditions, there is no scope for any emotional influence or human error. These bots work only based on criteria that are approved by the user and administrator. They only make decisions based on data analysis, which leads to profitable transactions.
Depending upon the strategy and purpose, given below are the types of crypto trading bots that are popularly used in crypto market transactions –
• Arbitrage Bots
These bots compare cryptocurrencies and their values on various crypto exchanges and transact only on those exchanges that offer the best value for investment. The only condition is that the user needs to log in on each platform and should have parked the required amount within the platform.
• Market-Making Bot
A market-making Bot creates both buying and selling bids in the market and it executes the transaction only if both buy and sell conditions are matched. For example, if someone is selling a digital asset for $1, the bot will offer the price of $0.99, and at the same time bids for the same asset at $1.1. If both the conditions are matched in the market, the transaction will take place and we will make a profit of 0.2 $.
•Algorithmic Trading Bots
These bots execute transactions when they receive a particular signal from the market and data analysis to either buy or sell a particular quality in a particular market at a particular price. Big investors generally use the trading bots who deal in big chunks of money. This type of trading bot transacts in lots.
• Portfolio Automation Bots
These crypto trading bots typically work in a situation where the investor wants to continue investing in the market and not looking to exit with profit-making. These bots help the investor in maintaining the desired portfolio. This type of bot is not used for active trading and is instead utilized for long-term investment.
• Technical Trading Bots
Technical Trading Bots are the most popular ones used on crypto exchange software these days. They are also known as conservative trading bots since they work on the principle of the past performance of the currencies. They predict future trends based on a comparison between past and current data and make decisions based on assumptions.
• Automated Crypto Trading Bots
Automated Crypto Trading bots are built over the algorithm of GRID distribution. It distributes investment proportionally within a trading range predefined by a trader. Each time a buy limit order is placed, a sell limit order above that price will also be placed. This results in faster transactions and quick profits. The only condition is that there should be enough buyers and sellers in the market. Till the time the prices remain under the predefined trading limits, the bot will keep trading with each transaction making profits.
Today, many crypto exchange development and consulting services are helping exchange owners tap the nerves of the market and the investor. Moreover, the exercise nowadays is to run and remain ahead as a crypto exchange with a large number of investors using the platform.
Crypto trading bots are an essential need for not just the platform owners but also the investors. Those who understand this, keep their venture and investment ahead of others with these small intelligent bots in crypto trading.
If you are planning to integrate bot trading into your exchange or want to create new cryptocurrency exchange software integrated with bot trading, Antier Solutions can help. We are known for our business-oriented crypto exchange development solutions that help start-ups and established organizations to launch crypto exchange software fortified with different industry-leading modules like spot trading, margin trading, derivatives trading, bot trading, and more.
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