How Trading Bots Work

At its simplest, a trading bot runs a loop: fetch current market data, evaluate the strategy's rules against that data, and if the conditions are met, submit an order -- then wait for the next cycle and repeat. Everything sophisticated about a serious bot is in the details of each step, not the loop itself.

The evaluation step typically checks far more than the signal alone: is there already an open position on this asset? Is the account within its risk limits? Is the exchange connection healthy? A bot that only checks the signal is incomplete.