Algos Rule the Market: Who They Are and Why the Average Trader Loses

Algorithmic traders are not just bots. They are high-frequency machines capable of making decisions, buying, selling, and exiting positions in milliseconds. In the crypto market—where liquidity is fragmented and data is public—they are especially effective.

Example 1: Front-running Orders

You place a buy order for a low-liquidity token. An algo bot "sees" your order in the mempool (before it's confirmed) and instantly places its order ahead of yours, buys cheaper, and sells to you at a higher price. You get the token — but at a premium.

Example 2: Liquidation Hunting on Futures

Bitcoin's price hovers near a major liquidation level. Algos push the price into that zone, triggering a cascade of liquidations. Prices crash, panic hits, and the bots scoop up assets at bargain prices.

Example 3: Pattern Manipulation

You spot a classic triangle forming on a chart and prepare for a breakout. The algos see it too — but they trigger a fake breakout, hunt stops, and only afterward let the price move in the "real" direction — without you.

What Can You Do?

Understand that most patterns don’t play out like they used to

Avoid low-liquidity tokens and exposed limit orders

Be cautious when using limit orders on DEXs

And most importantly — don’t overestimate human reaction in a game of milliseconds

The algos are already in the game. Play smarter.