Trading bots and Market Manipulation

Trading has changed ever since technology started strongly influencing it. There are many ways in which technology is used in trading. It is used to study the market and obtain market news instantly, to view real-time prices of the assets, to perform technical analysis and to place orders from anywhere at any time. Trading bots have been a revolutionary new addition to the trading scenario. There are various benefits to using trading bots but they have their downsides as well.

Cryptocurrency market – growth and the obstacles

Cryptocurrency trading is identified as one of the most profitable investments to make in the recent times. The crypto bot market is thriving as there are many investors who now switch to using bots for the convenience. But this has caused a lot of trouble for the other investors and the market itself.

Market manipulation is said to be the biggest threat that the cryptocurrency market is now facing. Most of the market manipulation is achieved with the help of rogue trading bots. This is a big problem that is worrying crypto investors around the world.

Trading bots and the market manipulation issue

There are several trading bots that are directly available for use by the traders. But there are also other cases where you might be using trading bots without even knowing about it. There are some online trading platforms that offer bot trading under the guise of broker based trading. There are scams and there is a pump and dump bots. Many believe that the crypto market works in cycles. So trading bots like Infinity App are is known to be able to quickly identify patterns to take decisions. In gambling card counting is illegal in some places. In the same way trading, bots that can manipulate the market with its number games are considered to be bad for the market. Bots are dangerous for the market in two main ways-

If there are too many bots placing the trader then an average trader might have a tough time in keeping up. Bots place multiple trades in one go. This cannot be done by a trader. And bots have no delays in placing orders. But for the trader, even the slightest delay might end up to be costly if there were multiple bots that placed trades at the same time.

The other major problem is the presence of trading bots that can manipulate and artificially change the price of any cryptocurrency. This might be due to a simulated demand. It might make the demand pattern difficult to study for the traders.