What are different type of bots and what they are good for?

[VarunAgw]

I've been learning about trading bots and so far, I have discovered these 3.

- Manual trading bots. They just provide extensions like trailing SL, trailing profit,..

- Grid bots. Good for sideway market. I am not sure what really is sideway market these days?

- Automatic bots based on signals. I don't know if they are any good at all.

- Scalper

- Arbitrage (This one is obvious and clear to me..I am not intending to use it at all)

Question:

- How is your experience with these 4?
- Are they more type of bots?
- Can I call bitcoin since yesterday, a sideway market?
- When is the right time to use which bot?

[CTEXPaul]

Hi VarunAgw,
     I think I can answer this question for you.

There are two types of bots that you've mentioned which I think are actual bots and a couple which are (IMHO) are just patches for platforms that should be built into the platforms but aren't.

scalping and arbitrage.

Depending on whether your margin trading or spot trading one will be better than the other for you.
So if your margin trading then scalping is the way to go (because you only need a very small movement to take a profit - spot trading would wipe you out with fees)
If you're spot trading, i.e. buying and selling the actual crypto instead of options or cfds then arbitrage is the way to go - because you can use the exchanges as the liquidity provider(s) - you don't get the option with margin trading.

The important thing to be aware of when doing arbitrage trading is the strategy will either be triangular (on the same exchange trying to take advantage of inefficiencies of the exchange's pricing strategy and order book) or will use multiple exchanges - in which case you also need to figure in the question of fees.

Trading based on signals is another thing altogether - we're implementing this as social trading which can be automated (or not). 
the extensions like SL/TP and trailing TP/SL are great functions but only for people who actually know how to trade and understand 'risk'.

The arbitrage and scalping models work best in markets which are pretty stable - the idea is to remove the risk and trade what is here 'right now' - so these are both methods which work best in a sideways market. A week or so back we were seeing price differences of between 10 and 15% on ETH so my favourite is arbitrage :-)
However, the arbitrage and scalping methods can go down to near zero - so you are depending on market conditions for both of these.

I hope this helps.
Paul.