Is it possible, or even worth trying?
9 min read · Aug 19, 2021
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To answer this question I’ve spent a lot of time thinking and investigating neural science, algorithmic trading, crypto trading and found something really interesting.
Disclaimer: if you are reading this article, I assume that you’re acknowledged about stock/crypto markets and have basic understanding why you need a bot or you’re just interested in their theory. This article won’t contain any code parts and it’s for educational purposes.
Let’s start with facts. Trading bots are not new and there are plenty of publications about it, they are used by financial structures, but are they really helpful? I think so, but if you are a programmer or you acknowledged basic concepts of scripting, you are able to write your own bot in few hours. But will it earn enough money for you? Will it have stable earnings? Will it ever hit 100,000$ annual return? I’m going to answer these questions in this post and give you some shots to move forward.
1.What is a trading bot?
A trading bot is an algorithm that turns specific market conditions into order decisions (usually buy, sell or hold). That’s it, nothing special.
2. What types of trading bots exist?
All types that any trader could take, as the bot is an algorithm written by programmers, they could put any logic in it.
In general, we have different types of traders:
• Long-term traders — investors;
• Swing traders — those who place orders on a week, month, or year basis;
• Day traders — those who place few orders through the day without moving them overnight;
• Scalping traders — those who place many orders per day, an hour, or even a minute.
All these trader types could be implemented in a bot.
3. Where trading bot could place orders?
Anywhere you want and could get to broker’s API or through reverse engineering. But you may even…
I’ve spent significant time exploring the realms of neural science, algorithmic trading, and cryptocurrency markets. In the context of the article you mentioned, the integration of these fields underscores the potential of trading bots in financial markets. Now, to break down the concepts used in the article:
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Trading Bots: These are algorithms designed to execute specific actions (like buy, sell, or hold) based on predefined market conditions. They're extensively utilized by financial entities.
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Types of Trading Bots: The variety of trading strategies adopted by different traders can be translated into algorithmic bots. These strategies encompass:
- Long-term traders: Focused on long-haul investments.
- Swing traders: Engaged in transactions on a weekly, monthly, or yearly basis.
- Day traders: Execute multiple trades within a single day without holding positions overnight.
- Scalping traders: Conduct numerous transactions throughout the day, sometimes within minutes.
Each of these trading styles can be programmed into a bot, allowing automation of these diverse strategies.
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Order Placement: Trading bots can interact with broker APIs or use reverse engineering techniques to access and place orders in the desired markets. Essentially, they operate wherever there's access to a broker's API or a means of interaction with the market.
This amalgamation of algorithmic trading principles, neural science insights, and cryptocurrency markets showcases the adaptability of trading bots across various trading styles and platforms. The efficiency and profitability of these bots depend on the intricacies of the implemented strategies and the market conditions they encounter. The article seems to explore the potential of these bots in generating stable earnings and achieving substantial annual returns, a topic that requires a comprehensive understanding of market dynamics and strategic implementation within trading algorithms.
