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Trading bot
A trading bot is software that places buy and sell orders automatically according to programmed rules, without a person approving each trade. Some run on your own exchange account through an access key; others are sold as services that trade pooled customer money.
What it means for you. The CFTC warns that fraudsters tout AI trading bots promising huge returns, sometimes described as guaranteed, and that AI cannot predict the future or sudden market changes. A bot holding an exchange key with withdrawal permission can move your funds out. Fees, spreads and subscription costs come out of any returns.
Sources: CFTC Customer Advisory: AI Won't Turn Trading Bots into Money Machines, CFTC press release 8854-24: advisory on AI scams · checked 4 October 2026
Copy trading
Copy trading is a service that automatically repeats another trader's trades in your own account, usually in proportion to the money you allocate. You pick a trader to follow, often from a leaderboard, and their buys and sells are copied without you approving each one.
What it means for you. You take the full loss of the trader you copy, plus fees, and you may not see their trades until they have happened. Leaderboard returns can be short-lived, selective or boosted by leverage, and the copied trader may be paid by the platform for attracting followers. Check how long the track record is and what the trader earns from you.
Source: ESMA Supervisory Briefing on Copy Trading (2023) · checked 4 October 2026