What trading bots do and common bot strategies

A trading bot is a program that places trades automatically by following rules someone wrote. It watches prices, checks its rules, and sends orders to an exchange. That is all.

A bot does not understand news, does not know when the market has changed, and does not get smarter by itself unless someone changes its rules. Its strengths are speed, consistency and no emotions. Its weakness is that it will keep following its rules even when they no longer fit the market. A bot with bad rules simply loses money efficiently.