The main types of trading robots include the following:
First, a trading robot is a piece of software that directly interacts with exchanges (usually using APIs to obtain and interpret relevant information), and conduct trading transactions on behalf of users based on the interpretation of market data. The robot makes these decisions, tracks market price changes, and reacts according to predefined and pre-programmed rules.
Generally speaking, although robots can usually be programmed according to user tastes and preferences, trading robots still analyze market behavior, such as transaction volume, orders, prices, and time.
Second, the trading robot trades on a cryptocurrency exchange, buying currency at a lower price, and then selling it at a higher price to obtain income.
Third, arbitrage robots are also the same trading robots. They only trade on a few exchanges. They make a profit by buying currency on an exchange with a lower exchange rate and selling it on another exchange with a higher exchange rate. Although the exchange rate difference between exchanges is now much smaller, arbitrage robots still appear from time to time. These trading robots can help users make full use of
Use these exchange rate differences.
In addition, traders can also use arbitrage robots to incorporate futures contracts into their trading strategies, compare and analyze futures contracts traded on different exchanges, and earn profits through the differences between the futures contracts and their underlying assets.
Fourth, create a market-in order to implement the strategy of creating a market, we must set a limit order for buying and selling near the current market price level. When the price fluctuates, the trading robot will automatically and continuously issue limit orders to profit from the spread. Although this strategy may be profitable at certain times, the fierce competition surrounding this strategy may make it unprofitable.
Especially in the case of low liquidity.
What are the advantages of robots?
1. Eliminate the psychological pressure of some transactions. Although, the person who uses it still needs to know when to intervene and when not to intervene, this is still psychological pressure/skills.
2. Robots react faster than humans. When there is a trading signal (enter or exit), you will not hesitate. On the other hand, humans may freeze or question transactions. Its rapid response time is conducive to rapidly changing market conditions.
3. The quantitative trading system is currently a relatively hot product in the market. The development of the quantitative trading system can provide you with more specialized platforms.
4. Automation software can monitor more markets than humans. At any time, users can only effectively monitor some markets, but it can monitor hundreds of markets. Once released, opportunities can be found in all markets monitored by its programming. Can take advantage of more opportunities than human operations.
5. Even if the trader does not do this, he will adopt a suitable trading strategy. If the strategy proves that you can make a profit, of course this is a good thing.
6. Force traders to simplify their strategy to a programmable level. This process allows traders to gain insight into their strategies. People who buy robots will not get this benefit, and usually do not know the details of their profits.
7. Although some intervention is required, once a trading program is created, it may take a long time to maintain. This means that during certain time periods, automated trading procedures may be less than manual trading.
8. Automated trading is the most true test of whether the strategy is feasible. Manual trading has too many variables, and the program just does what it says. Automating and testing strategies is a good way to understand whether the strategy is feasible under current market conditions.
9. Once the strategy is automated, it can be easily tested under different market conditions (using current or past price data). This will reveal the weaknesses and strengths of the plan. For example, it may perform well in trending markets, but not perform well in different markets. This data can then be used to change the program, or when appropriate intervention and closing or opening of the program
Show to traders.