Trading bots are legal because most major trading platforms have no problems with traders using them. Today, many brokers have more people using trading bots compared to manual traders. However, the nature of the trading world is such that finding legitimate trading bots to use is an arduous task. Are cryptocurrency trading bots legal? Yes, they are.
Trading bots are legal in the cryptocurrency market, although only some brokers allow them. Crypto bots are automated software codes that help the user buy and sell cryptocurrencies in a reasonable amount of time. The idea of having a bot do the trading on your behalf may seem suspicious, but in reality the practice is often welcomed. CryptoCurrency Facts points out that since a thin market is bad for everyone, the more buy and sell orders on the books the better, so bots are definitely encouraged.
In both the cryptocurrency and equity markets, bot trading is widespread, but not all brokers allow it. Moreover, everything that would be illegal in standard trading environments is also considered illegal in cryptocurrency trading. This means that you cannot exactly make or buy a copycat bot without causing problems; instead, priority should be given to making or selecting a bot that follows indicators. Developed to carry out trades and complete transactions on behalf of human investors, cryptocurrency trading bots are slowly entering the mainstream consciousness.
You are unlikely to make or buy a fake bot or a pump-and-dump bot without expecting problems; instead, you will want to focus on (for example) making or buying a bot that follows indicators or works as a market maker. Trading bots are programs that contain the entry and exit rules of a trading strategy translated into code. Now back to those scam trading vendors who have made a big business out of selling trading bots that promise riches to the masses. A genuine bot company will focus on showing you the numbers and highlighting what the bot can do with facts and figures.
Just because it is legal to trade with bots does not mean that everything that involves trading with bots is OK. Many trading jurisdictions around the world do not have any regulations prohibiting the use of bots. In particular, automated programs that trade on an exchange using the exchange's API are called "trading bots". Trading bots are often marketed with perfect performance reports where the equity line looks like a line drawn from the bottom left corner to the top right corner.
In short, there is nothing magical about trading bots themselves, as they are nothing more than automated trading strategies that have buy and sell conditions built into them. One of the best ways to spot strategies or trading bots that fit the curve is to trade the strategy for a while and see how it works. If you are more familiar with stock investing, you might think that a trading bot will work like a robo-advisor. The rule of thumb for finding quality trading bots online is to avoid options that sound too good to be true.
The use of a trading bot is not only legal, but often welcome; a thin market is bad for everyone, so the more buy and sell orders on the books, the better.
