History of Trading BotsWhat we know today as bots or automatic trading system (ATS) has been around in its most basic form since the 1940s when Richard Dunchian used set rules to purchase funds. However, modern bots as we have these days came to limelight in the 1980s when a popular trader, John Henry applied a similar strategy in trading stocks. Since the 1990s, fund managers have increasingly used automated trading algorithm to manage the funds of client but the increased attention that bots have received in recent years is mainly due to advancements in IT. Private automated trading has been used in the forex market and most recently in the coin market. Automated trading platforms are becoming common as primary cryptocurrency exchangers are giving traders more room to explore the market and electronic order book. It is important to understand that bots are mostly projects in development as eloquently captured by the Codex. According to them,
“An automated trading solution contains at least THREE main components: – indicators – configuration – trading engine People often say “bot”, but mean “solution”. “bot” and “solution” are two different terms. A “bot” is a tool. A “solution” is a system that uses tools, bots and others (!), to gain. It is important to see the difference, and not to judge a bot using the criteria of a solution. There is no “the best choice” because the bot or bots that is/are the most profitable to use is/are the result/results of a complex function. More often than not, people who say, that they would like to get a setup, really need a solution.” Codex, BitcoinTalkIn essence, a good bot would do a lot in the right hands since they mostly are just tools that perform based on the expertise of the user. Over time, as AI controlled bots are developed, this narrative could change. But what is obvious is that such bots would not be readily available to public since the owners would likely take advantage of the edge it gives them over the market.