The trend for Bitcoin trading leads toward trading robots. While we might consider this a threat, it can be the saving force for Bitcoin. Bitcoin suffers from high volatility or Beta as explained earlier. Trading robots can reduce this volatility.
Trading robots, or software, that tie into trading exchanges via Application Development (Programming) Interfaces, will make frequent small trades when there is movement in the market either up or down.
Trading robots, or software, that tie into trading exchanges via Application Development (Programming) Interfaces, will make frequent small trades when there is movement in the market either up or down.
These frequent trades for small gains (and losses), are called scalping trades. They steady the market considerably because price movements immediately result in buys or sells against the move.
Mtgox.com has automated trade platform API's with two forms:
- HTTP API
- Streaming websocket API
All relevant trade information can be accessed through these protocols for trading.
There have been a few free trading bots written in PHP, but they were pulled off sites quickly. A robot that is consistently profitable is worth a fortune. The essence of what makes the robot work is being able to spot the price trends instantly, execute instantly, and avoid significant losses.
There are downsides for trading software robots. They can crash a market when they gain too large a market share. This is partly what happened in the famous Oct 1987 Black Monday crash. Mutual funds triggered excessive selling with computerized trading platforms.
0 comments Blogger 0 Facebook
Post a Comment