Trading without a major fuss is a situation we all want to be in. To be able to trade easily, we can employ a Trading API platform. The platform gives the trader the ability to develop their own computer programs or even use third-party platforms for trading.
Automation of trading helps to increase profitability and also reduces the time taken trying to predict the market. It leaves you stress-free most of the time.
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What is API?
API is an application programming interface. With its help, users can interact with external program components, which also have their own API. Nowadays API interfaces are found almost everywhere. And even when developing applications from scratch, companies and individuals use internal APIs that are responsible for reusing components.
Application programming interfaces are a set of program code that works on the principle of requesting data and, analyzing responses, issues commands to software platforms.
Some developers create it for others as a set of ready-made classes, functions, procedures, structures, and constants in a certain format. So as a result, a user on another site or in an application can get information that is easy to understand.
Forbes says machines need to be able to communicate seamlessly and easily with each other to enter the era of AI-driven applications.
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Benefits of API platform in trading
If we talk about trading, we use the API to link between auto-trading algorithms and the trader’s own brokerage platform. This enables the trader to have the most up-to-date information on:
- price information of a particular cryptocurrency;
- high and low prices;
- data on the volume of trades;
- historical data on trading in certain cryptocurrencies;
- rating of coins by trading volume;
- newsfeeds reflect the situation in the cryptocurrency market.
Having received such data, you can use it to optimize trading manually or using bots. Moreover, you can use it for other purposes, for example, to post information on your website. It’s a great tool to use as a passive income as well as сrypto signals.
Trading bots can also use the API, for example, to place trades. Here are some examples of use:
- Arbitrage bots
Their goal is to research the market for arbitrage opportunities to generate profits and place trades. For example, a bot can recognize that a certain cryptocurrency is undervalued. After this, it can signal the need to complete a transaction and make a profit due to the difference in exchange prices.
- Trading bots using the alternation rule (not showing the same behaviour twice)
In this case, the API is a tool for calculating the average price over a certain period of time. If the price deviates too much from this level, then the principle of average value recovery tells the bot that the price will return to the average value. And thus that it is time to place the corresponding deal to make a profit.
- Impulse trading bots
The use of the application programming interfaces is necessary here to calculate the strength of the momentum of the price movement of the cryptocurrency.
Moreover, it’s important to pay attention to the interface of the bot itself. Like the cutting-edge management interface, ofkucoin trading bot attracts a lot of attention, and many traders choose it for this reason.
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With all the variety of offers on the market, cook up the products, find something good, often, not such a simple start-up, ready to go.
- Coinbase is famous for cryptocurrency exchange services. Besides, it is also known for its powerful API functions like Wallet notifications, Coinbase Exchange API and Toshi, Merchant Checkouts etc.
- Another popular exchange is Kraken. It allows you to receive actual information about transactions, assets, balances and so on. Their application programming interface is suitable mostly for those developers who are building price ticker or currency converters. As a result, a huge data bank of statistics about a great number of cryptocurrencies will be available.
Some smaller brokers also provide API access. In addition to functionality, some brokers also provide access to documentation about their APIs. This documentation is very useful as it helps you understand what data is available. Moreover, you learn the many technical aspects that are important when embedding components in your code.
In addition, you may notice that several brokers even provide libraries in different languages. This is to make them more commonly used and easier to implement. Brokers are trying to promote their libraries and ready-made solutions to also draw attention to their products. Thus, the advantage of libraries is that ready-made solutions save you from having to write something from 0. This reduces development time and saves resources.
All in all, the API carries one of the key functions in software development. With their help, applications can easily exchange data between each other and bring great benefits to traders.