What is Algorithmic Trading?
Don't let the complicated name scare you. At its core, algorithmic trading is simple:
It's the practice of using a computer program to automatically buy and sell assets for you based on a pre-defined set of rules.
Think of a trading bot as your personal assistant who works 24/7. You give it a specific strategy (the "rules"), and it executes that strategy tirelessly, without emotion, day or night.
For example, a simple rule could be: "When the price of Bitcoin drops by 1%, buy $100 worth. When it rises by 1% from where you bought it, sell it."
The bot follows these instructions precisely, allowing you to take advantage of market opportunities even when you're asleep, at work, or on vacation.
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