I've just poured some well-deserved love into the LocalBitcoins API, bumping it to version 3.0. Here's the beef (change log):
- Trade contact messaging, both reading and writing are now supported by the official API
- Trade contacts can be canceled and disputed when eligible
- Together with mark payment complete support recently these features complete the actions that can be done with existing contacts
- Ability to create new contacts with API is coming soon!
- Wallet API support. Balance can be read and recent transactions can be inspected. Bitcoins can be sent from the wallet using a special permission. Existing access tokens will not have send access, but new tokens can request this permission from the user.
- Ad editing API now has equivalent fields to the website form. There is a new ad creation API.
- Authentication code was overhauled
Read up about the entire API and how to start using it at the up-to-date API documentation.
With the new LocalBitcoins API it is possible to automate ad-driven Bitcoin trading. In the future there will also be an official API to automate contact making.