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Once the future price is predicted, they then place trading buy and sell orders in actual crypto markets. The closer the price is to prediction, the better the bot and crypto bot trading, as that amplifies profits. The analysis is made with the target of predicting future crypto prices, say for Bitcoin and other coins, and the correctness or exactness of the prediction is what matters.
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They then analyze this information using predefined trading strategies to derive useful and actionable metrics or conclusions called trading signals. Modern crypto trading bots do more than trade crypto – being based on artificial intelligence, machine learning, and other smart technologies means they can collect big data crypto market information in real-time using APIs. The below image shows only 38% of crypto users use bots but that figure goes up to 86% when considering the amount of money moved: Hence, using a trading bot can help you compete efficiently and successfully. Trading bots are tried and tested in stock, forex, and other digital asset trading. Most of the money dealt is by institutional traders and therefore done by bots. Although only 38% of crypto users trade with bots, that percentage rises to 86% when considering the amount of money moved.There are many types of these bots grouped as per the trading strategies – arbitrage bots, coin lending bots, margin trading or leverage bots, and market maker bots. They use automated and smart technologies like AI, machine learning, etc.
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In a nutshell, a bot lets you automate a customized or third-party trading strategy.