SimpleTrade
What Is an API Key and How Does It Connect an Exchange to SimpleTrade
You choose your bot’s settings, start it, and trades appear on the exchange. But how does the software send instructions to your account without you placing each order manually?
This is where API comes in — a way for software applications to exchange data and instructions. Through an API, a trading service can retrieve account information, submit orders, and check their execution.
What is an API key used for?
Market prices are often available without connecting a user account. However, balances, open positions, and order management are specific to each account.
An API key helps the exchange identify which account a request belongs to. It is usually paired with a secret key used to sign requests.
This allows a connected service to interact with the exchange without requiring your account password.
What permissions does a bot receive?
The connection’s capabilities depend on the key’s permissions and the features supported by the exchange.
- Read access — retrieving balances, positions, orders, and trade history. Useful for analytics and tracking results.
- Trading access — submitting and cancelling orders, and managing positions within the available functionality.
- Withdrawal access — a separate permission that a standard trading bot does not need to place trades.
An API connection does not necessarily grant trading access. For example, an analytics service can collect statistics without opening or closing positions.
How does a trade work through an API?
Imagine a bot receives a signal that matches your chosen settings.
- Checks the entry conditions. The software determines whether the signal meets its rules and limits.
- Submits an order. It sends the trading pair, direction, size, and order type to the exchange.
- Receives the exchange’s response. The service learns whether the order was accepted or rejected.
- Monitors execution. The software checks the status of the order and position.
Submitting an order does not mean a trade has been executed. For example, a limit order may remain open until market conditions allow it to fill.
That is why trading automation depends on both signals and the correct handling of exchange responses.
Do you need to transfer money to the bot?
When you connect your own exchange account directly through an API, funds remain in that exchange account. The connected service interacts with it according to the permissions you grant.
Funding a platform’s internal balance is a different setup. Before getting started, check which method applies: connecting your own exchange account or using a balance held within the platform.
Do you need programming skills?
Connecting to a ready-made service usually does not require writing code. You create an API key on the exchange, set the necessary permissions, and enter the credentials in the service’s connection form.
The service handles requests, status checks, and order management. The exact setup steps depend on the exchange and the tool you choose.
Does an API make trading more profitable?
An API is a connection method, not a trading strategy.
It allows software to automate actions and send instructions to an exchange. On its own, it does not improve signal accuracy or determine which trades will be profitable.
Results depend on the strategy, settings, fees, execution, and market conditions. Even a key without withdrawal permission can allow trades that result in losses.
What matters when connecting an account?
Grant only the permissions the service needs. Read access is enough to view statistics, while a trading bot requires trading permission.
Do not share your secret key in chats or expose it in screenshots. If the key’s credentials are exposed, revoke it through the exchange.
Revoking a key stops access through that key, but it should not be treated as an instruction to close trades. Check open positions and pending orders separately.
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