A trading bot in crypto is a software program that automatically buys and sells cryptocurrencies based on a predefined set of rules or strategies. These bots are widely used to take advantage of the 24/7 crypto markets, react to price changes quickly, and eliminate emotional decision-making.

Types of Crypto Trading Bots:

1. Market Making Bots

Place buy and sell orders to profit from bid-ask spread.

Work well in sideways markets.

2. Arbitrage Bots

Exploit price differences across exchanges.

Example: Buy BTC on Binance at $40,000 and sell on Coinbase at $40,100.

3. Trend-Following Bots

Use indicators like RSI, MACD, moving averages.

Buy in uptrends, sell in downtrends.

4. Grid Trading Bots

Place layered buy/sell orders at fixed intervals above and below a set price.

5. Scalping Bots

Aim for small, fast profits on short timeframes.

Often use fast RSI or volume-based signals.

Tips Before Using a Trading Bot:

Backtest your strategy with historical data.

Start with small capital or paper trading.

Use stop-loss and take-profit levels.

Monitor bots regularly.

Be aware of exchange APIs, latency, and security.

KHALID JAVED