A trading bot is an automated software program that executes buy and sell orders on behalf of a trader based on pre-defined rules, algorithms, or strategies. Bots can operate 24/7 and react to market conditions faster than human traders, making them popular in cryptocurrency and high-frequency trading. Common types include arbitrage bots, grid trading bots, and market-making bots. While bots can improve efficiency and remove emotional decision-making, they require proper configuration and monitoring to avoid significant losses.
Example
“He configured a grid trading bot to automatically buy and sell Bitcoin within a defined price range, earning small profits on each swing.”