Bots or Technical Robots

The chess magnate Gary Kasparov's career went downhill when he faced his greatest nemesis - Deep Blue. And were not even talking to a human player but a chess software that made the giant fell on his knees. Truly, artificial intelligence is a force to reckon with not just with sports but with gambling, and now in stock trading. These trading robots are known as "bots."

"BOT" (short for robots) is any special and sophisticated designed machines that operate through computer protocols. In trade jargon, it's the colloquial for trading algorithms that trades directly with human counterparts. They can also serve as trading advisors who can analyse the flow of stock market and make trading decisions. One such example where bots are used is in high frequency trading.

They operate to multi-task different trading functions like market making, shares accumulation and arbitrage. The term was coined during the early Internet days when chat was just text-based using Internet Relay Chat or IRC. Back then, few servers operate hundreds of channels, each with one or few administrators with privileges (e.g. ops, kick, ban) to moderate other members' activities, the first person who created channel was automatically the Op.

Over time, some users programmed algorithms or robots (shortened to "bot") that will maintain their channel when they're logged out, giving them privileges that Ops are entitled to, like greeting new members, ban users for using offensive language, answer frequently asked questions, etc. Some of these bots are armed with sophisticated programs making them intelligent. These bots are now programmed to specialise in certain fields including trade.

In comparison with manual trading, bot trading is quicker with less margin of error than human transaction but guarantee less profit. Also, because they are mechanical, bots can work for 24 hours and can come up with "intelligent" trading decisions. They are downloadable over the internet and are compatible with trading platforms like Expert Advisers and Metatrader.

For traders who are interested to use this software, it is imperative to test first. Assess trial demonstrations and see whether the software gains profit. This will also test whether you are comfortable with the system.