In this article we will be looking at some of the different types of bots available to us today and how they can help us in our trading.
We will start with the very basic form of trading bot which is simply a software program that you can download onto your computer and run on a schedule. This is basically the most basic type of bot that can be used for trading and the reason why it is so simple is because it only needs to follow the trends of the market, it does not have to think about anything else. The problem with this type of bot is that it has no intelligence whatsoever, it simply follows the trend.
Next up we have what are known as expert systems. These are programs that have been designed by traders who have experience in the field. They are usually written in a programming language such as C++ or Visual Basic. These programs are generally more intelligent than the first type of bot, they use algorithms and other methods to try to predict future price movements.
The next step up from an expert system is the semi-expert system. These are also programs that have been written by traders who have experience in their field. The difference between an expert system and a semi-expert system is that the latter has the ability to take into account past data and then make a decision based on that.
Finally we come to the fully automated system. These are the most sophisticated of all the bots available today. These are programs that are completely self contained and do not need any human intervention to work.
So now that we have looked at the various types of bots that are available to us today, let’s look at the pros and cons of each one:
Expert Systems
Pros:
1) These are generally written by experienced traders and therefore are likely to have more accurate predictions than the other types of bot.
2) Some of these programs can be programmed to automatically adjust the parameters in order to improve accuracy.
Cons:
1) They are usually very expensive to buy and maintain.
2) It may take several months before you see any profits.
Semi Expert Systems
Pros:
1) These are cheaper to purchase than an expert system.
2) You can get them fairly quickly and install them yourself.
ons:
- 1) They are less accurate than an expert system.
- 2) You may need to tweak the parameters manually if you want them to perform better.
Fully Automated Systems
Pros:
No Cons
As you can see, there are pros and cons to each type of bot. If you are new to trading you should definitely consider purchasing a semi-expert system. This way you can get started trading without having to spend a lot of money.
