Trading Bots 101: What Bick Wants You to Understand First

Moving into Part III of How Not to Get Scammed by AI Trading Apps, Felix Bick shifts focus from AI trading apps specifically to the broader world of trading bots — and Chapter 19 establishes essential groundwork before diving into specific bot types and their associated fraud patterns.

Bick’s definition is straightforward: a trading bot is software that executes trades automatically based on predefined rules or signals, without requiring a human to click “buy” or “sell” in real time. He’s careful to note that legitimate bots range from simple rebalancing tools used by retail investors to sophisticated institutional systems executing thousands of trades per second — the technology itself is neutral, and its legitimacy depends entirely on whether it does what it claims, and whether the operator is honest about performance and risk.

The book acknowledges genuine variation in quality among retail-facing bot products marketed for cryptocurrency trading. Some connect legitimately to real exchange APIs and execute real, if often unremarkable, strategies. Others, Bick notes bluntly, are pure marketing wrapped around a random-number generator or a strategy so simple — buying and holding — that the “bot” adds no real value beyond what a manual investor could do for free.

Bick identifies the core evaluative question that carries through the rest of this section of the book: can a bot’s historical performance be independently confirmed through exchange trade records, or does it rely solely on the vendor’s own reporting? The latter, he notes, carries the same fabrication risk described throughout the AI trading app discussion earlier in the book.

This chapter’s real value is connective — it links the verification principles established in Part II directly to the bot-specific chapters that follow, showing readers that the same fundamental due diligence questions apply across every category of automated trading product covered in How Not to Get Scammed by AI Trading Apps.