What is algorithmic trading for crypto?

Simply put, “algorithmic trading” refers to using a computer program or system to trade on the market according to a specified set of rules. Algorithmic trading often makes use of mathematical models and formulas to decide when and how to trade assets on an exchange.

What is a crypto trading bot?

Crypto trading bots are a type of algo trading tool. While algorithmic trading, in general, can be applied to any financial market, crypto trading bots are specifically built for cryptocurrency markets to utilize crypto platforms, like decentralized exchanges, and other crypto-native features, like MEV protection.

Is cryptocurrency algo trading a good option for retail traders?

While cryptocurrency algo trading has become more competitive in recent months, there are still interesting opportunities for retail traders to take advantage of. Even though the arbitrage opportunities are being gobbled up by the HFT firms, you can still develop your bot to trade on technical indicators and well-established trading patterns.

Can trading algorithms go haywire?

Often bots can perform in unexpected ways and trading algorithms can go haywire. The last thing that you want is for your system to place wayward trades that could liquidate you. There is a great deal of open source code that can be used to develop and run crypto trading algorithms.