In the simplest of terms, these are scripts or platforms that run on specific rules that you set so you don’t have to manually do the buying and selling. The basic idea is to buy low and sell high. But trading platforms and bots do more complicated calculations to make a profit for their users, so it’s not just simply “buy when the chart is red, sell when it’s green” kind of thing.

There are also several strategies (from real human traders and automated through bots) that can be employed through these trading bots. For example, the most common ones are Grid Trading and Arbitrage Trading.

For grid trading, it’s literally buying when the price is low and selling when it’s high. For arbitrage trading, it is when you play with different market price differences.

For example, if you can buy BTC for 1% cheaper on Marketplace A over Marketplace B , of course, you’ll buy it where it’s cheaper… and then sell it where it’s being traded higher for a quick and small profit.