Automated Trading
Trading system managed by software without continuous human intervention.
Beginner-friendly explanation
Automated trading lets software handle your buying and selling on the markets. You set simple rules (e.g. "buy if price goes up by 5%"), and the software executes trades for you. It runs even while you sleep, helping you avoid emotional decisions.
Example: You use a platform like 3Commas. You set up a bot to buy Bitcoin if RSI drops below 30. No need to monitor the market all day long.
Intermediate-level insight
Automated trading is based on scripts or bots that execute orders according to predefined conditions. These conditions can use technical indicators (RSI, MA, MACD), price thresholds, or simple algorithms. Automation boosts trading discipline, removes emotion, and allows strategies to run 24/7 across multiple assets.
Example: A DCA (Dollar Cost Averaging) bot invests $100 in Ethereum every week, regardless of price. This strategy is automated to smooth out purchase price over time.
Advanced perspective
Automated trading involves programmed systems that react to market events in real-time, using deterministic or adaptive logic. It includes several layers: software architecture (API, server-side execution), risk management (position size, SL/TP, max drawdown), execution speed and latency (critical for scalping or arbitrage), integration of external signals (on-chain data, sentiment, volume). Advanced systems combine multiple modules (analysis, decision, execution) and may be hybrid (semi-automated with human validation).
Example: A crypto hedge fund uses an automated system based on on-chain data, price patterns, and machine learning algorithms. The system adjusts position size based on intraday volatility and applies a dynamic trailing stop.
Trading Strategies
automated trading, trading bot, automation, execution, programmed strategy, 3Commas, API, DCA, scalping, 24/7 trading, emotions