📊 What are trading bots on the Binance platform?
Trading bots are automated tools that execute buy and sell orders in cryptocurrency markets on your behalf, according to a set of rules and strategies that you define in advance.
🎯 Their primary goal is:
To execute trades faster than human capability.
To reduce emotions in decision-making (fear/greed).
To take advantage of market opportunities 24/7.
🔧 Popular types of trading bots on Binance:
1. Grid Trading Bot:
Buys and sells cryptocurrencies within a specific price range. Excellent for volatile markets.
Example:
If you set a range from $25,000 to $30,000 for Bitcoin, the bot will buy at $25,000 and then sell at $26,000, then repeat based on fluctuations.
2. Dollar-Cost Averaging (DCA) Bot:
Buys small amounts regularly regardless of market price to reduce the impact of volatility.
Example:
Buying $100 of BNB every week, regardless of its price. This helps build a position gradually without worrying about price fluctuations.
3. Arbitrage Bot:
Exploits minor price differences for the same cryptocurrency between different markets (e.g., between futures and spot markets).
