My Bitcoin Bot Review – Top Trading Bot or Scam? – Binary Option Sheriff

However, using bots to trade on the financial markets is a long-established and legitimate activity — and it’s easier than anywhere in the cryptocurrency markets. So, how do these bots work, and can they really make you money?

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Trading bots are software programs that talk directly to financial exchanges, and place buy and sell orders on your behalf. They make those decisions by watching the market’s price movements, and reacting according to a set of predefined rules.

Joseph Lee is living proof that they can make money. Lee, who founded derivatives exchange BTC. While that seems astonishing, the devil is in the detail, of course: Market maker Lee’s first trading bot used inter-exchange arbitrage, noticing differences in prices between orders on different exchanges, and buying on some exchanges while selling on others.

Gox dominated the market, and other exchanges had poor pricing because their supply of bitcoins was limited. Gox and sold them to other markets. I bought a lot of bitcoin into tertiary markets. Established practice Lee may have written his own bots, but today, the bitcoin trading bot market is far more established, with several available off the shelf. Examples include Butter Botwhich offers an online trading bot accessed via a Google Chrome plug-in, and Haas Onlinewhich sells a Windows-based personal trading server.

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CryptoTrader offers a trading bot marketplace, which allows people to develop bots using different trading strategies, and then rent them to others. Trading by algorithm isn’t new in the financial world: Lee said, however, that the bitcoin exchange community is one of the first where exchanges grant customers’ computers direct market access DMA.

This enables individual traders to have their computer access the exchange’s electronic order books directly. That’s a service normally only available to brokers and investment houses in the conventional markets. So, why isn’t everyone doing it? Pablo Lema, founder of Butter Bot, says that bots aren’t a ‘fire and forget’ technology that enable dilettantes to make money without trying: The situation — while still needing improvement — is at least a little better now.

Opportunities for inter-exchange arbitrage still exist, but he recommends using technical analysis bots. But trading isn’t necessarily based on technical analysis alone.

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