The market provides many solutions for automating cryptocurrency trading. Which trading bots to choose, from the maze of available offers? Many of them can bring you huge profits, but it carries with it a proportional degree of risk. Don't forget to follow your risk management and also our profile 🙂
WHAT ARE TRADING BOTS?
Trading bots offer market participants in the cryptocurrency sector much more than may seem at first glance. Available options include not only the timing of specific transactions but also opportunities in data analysis, efficient portfolio management, the use of AI-based solutions, and many others.
This article attempts to answer the question of what trading bots are and what they can do, as well as to suggest some of the most well-known and frequently chosen platforms by traders. This is not a sponsored post and does not contain affiliate links. The review was based on sources available on the internet and research conducted by well-known and respected entities in the field, primarily Coinmonks.
If during reading you find that you know of a platform that was not included in the list and would be worth having here, please let us know."
TRADING WITH ROBOTS IN ACTION OR WHAT CAN YOU ACHIEVE WITH THEM?
Automation of repetitive tasks
Performing a large number of repetitive tasks can be quite frustrating and time-consuming. A cryptocurrency trading bot allows you to virtually "copy and paste" specific tasks and easily execute trades.
One of the best ways robots can help with this type of recursion is by regularly rebalancing your wallet. Rebalancing means maintaining a constant composition of the portfolio in the originally chosen allocation, which is optimal for the purpose and risk of each investor's portfolio according to the strategy they use.
If you want to perform such a procedure every hour, you must be systematic and remember to do it. Using robots, you can program them to rebalance for you - of course, within clearly defined criteria and time.
Timing
Timing, understood as the ability to achieve a high degree of accuracy, is crucial in trading. Each individual transaction can have a huge impact on your potential earnings.
Assume that the price of Bitcoin is falling and you want to sell your position when BTC reaches the price threshold of $59,000. If you were to do this manually, you would have to patiently and carefully monitor the price chart and still may not hit the trigger at the right time. A trading bot can be easily programmed to monitor the market and execute trades at the right time instead of you.
The simplest possible
Consider the example of "smart order routing".
Imagine you wanted to process transactions across many trading pairs (sometimes simultaneously, sometimes not). Each pair must be precisely defined according to its time, the number of assets, and trading price. The entire "tour" must be completed within a certain time frame before market conditions change.
Seems clear and simple, right? However, executing these types of trades may not be possible for you here and now when you are sitting in front of the monitor and analyzing price charts. This is just one example of the many complexities you might encounter when trading. You can quickly conclude that some strategies are practically impossible to implement through manual control.
Trading robots can be used to easily automate these complex and seemingly impossible strategies."
HOW DO TRADING BOTS WORK?
The algorithm of crypto bots uses complex calculations. The algorithms used rely heavily on financial functions. The program collects data and evaluates the most profitable transactions for the investor based on that data. The trading bot practically continuously monitors cryptocurrency rates.
Properly programmed rules determine the platform's reactions to price changes. The trading bot can use default settings or user-defined preferences and instructions. Based on the market situation, the system decides whether to buy, sell, or hold the cryptocurrency. Each transaction is executed automatically and in the blink of an eye.
The goal of each bot is to provide the user with the highest possible return on investment. However, it is important to remember that predictions from these types of systems can be incorrect. This is due to the volatility of the cryptocurrency market. Even the best algorithms cannot predict all price changes with 100% accuracy.
In analyzing crypto bots, past data, and their averages are taken into account. Commercial decisions are made based on that data. The system for calculations does not use any rumors or unconfirmed news. It only follows the analysis of trends in individual cryptocurrencies."
HOW NOT TO BE DECEIVED?
There are many cryptocurrency providers on the web. These platforms may differ in the type of algorithms used, features, or available payment methods. Unfortunately, choosing the most effective system can be quite difficult.
Some trading robot providers operate fraudulently. Therefore, it is worth trying out any system before making a larger deposit. Most platforms offer access to a demo account.
Individual crypto bots are also advertised in a similar way. Platform owners promise investors high verifiability and high profits. However, it is always worth reading the software's contractual terms and conditions. This allows you to assess the risk of investment loss in advance.
Using the platform is usually free. However, investors must pay fees for trading and depositing. There is also a fee for account management. When planning a larger investment, it is worth analyzing all expenses.
Before choosing a crypto bot, it is worth finding out the opinions of internet users about it. The experience of other investors can be very useful in investing. The platform should also have the required licenses and operate fully legally. Finally, it is worth reviewing regulations and checking the fee amounts.
TRADING BOTS FOR CRYPTOCURRENCIES
Here is a list and a brief commentary on various options of bots for cryptocurrency trading.
PIONEX
Pionex is an exchange with an integrated bot for trading cryptocurrencies. Pionex does not try to offer customers risky trading products with high leverage but instead encourages them to limit their leverage and think like investors, not gamblers.
This approach is also evident in the trading robots offered by Pionex. They are not supposed to be similar to most advertised trading bots, they do not promise artificial intelligence algorithms that will bring you huge profits.
The trading bots on Pionex are automated tools designed to help smart traders execute their strategies. In total, Pionex offers a dozen trading robots, each built for a different market and situation:
Grid Trading Bot, Leveraged Grid Bot, Margin Grid Bot, Infinity Grid Bot, Reverse Grid Bot, Leveraged Reverse Grid Bot, Dollar-Cost Averaging Bot, TWAP Bot, Trailing Take Profit Bot, and Spot-Futures Arbitrage Bot."
BITSGAP
Bitsgap is best known for its unique mechanism for automatic trading.
The algorithm implemented in Bitsgap is based on a simple and effective technique called GRID. The investment is proportionally divided within the trading range set by the trader.
Each time a buy limit order is filled, the bot places a new sell order just above that price. Conversely, a new buy order is placed below each completed sell order. As long as the price stays within the trading range, the bot will trade continuously.
The Bitsgap algorithm is designed to maximize its profit from buying low and selling high whenever the price fluctuates. Automated robots have all the risk control features such as Stop-loss, Trailing UP, Take Profit, and some nice exit strategies.
The solution runs in the cloud, so you don't need to download anything.
Trading bots are based on transparent and efficient logic.
It offers a risk-free trading simulator in DEMO mode
14-day free trial version
CRYPTOHOPPER
Cryptohopper is a paid bot for trading BTC and other cryptocurrencies. However, before deciding to purchase a subscription, the tool offers a 7-day trial period.
One of the well-known trading bots on Cryptohopper is the market-making bot. It is similar to the Grid Bot on Pionex but is more focused on distributed profits in the order book.
QUADENCY
The best thing about Quadency is the backtesting feature, which allows you to do it based on specific data and numbers instead of groping in the dark. That is also the most important feature of this robot. It is always good to know the performance of historical data before using real money.
MUDREX
Mudrex makes investing using crypto bots as easy as investing in a mutual fund. They provide very transparent information, have a wide range of bots based on the level of risk appetite, and have a very attractive pricing model.
The Mudrex platform has over 7,000 users trading on the platform with an average trading volume of over $400 million. They are backed by well-known VCs and angel investors and have a very active and engaged community.
Mudrex does not create its own bot. Instead, it has a curated bot marketplace created by professional traders. The best thing about this platform is that all information about robot performance is public and easily understandable even for novice users.
COINRULE
Coinrule is a great choice for beginners. The bot allows even less advanced traders to build their trading strategy within minutes. The user-friendly interface guides the user through the process of creating a trading bot step by step.
The library of templates includes more than 150 predefined algorithms that help beginners operate a trading system tailored to their needs. The platform allows the use of different trading strategies along with defining stop loss, taking profit levels, and integration of the most famous technical indicators. The list of trading strategies that Coinrule allows is endless, and the company regularly publishes new ideas to the platform's knowledge base.
Another interesting feature is the demo version built into the platform. Traders can test their trading systems in a secure environment with virtual coin allocation. Demo rules are based on prevailing prices on the Binance exchange.
3COMMAS
3Commas is one of the most well-known bots for cryptocurrency trading. The user interface is designed more for a professional trader.
The platform has two subscription levels - Basic and Pro. The basic level costs $25/month, while the second level costs $84/month and, of course, has many more features.
The 3Commas bot can implement multiple strategies based on technical indicators.
The community is very active.
TRADESANTA
TradeSanta can be used on eight major exchanges, including Binance, Bittrex, HitBTC, Bitfinex, which can help you trade with many of them at the same time. Depending on the package, the price for accessing the tool ranges from $14 to $70 per month.
One of the more interesting features of TradeSanta is the Grid Bot. Pionex and BitUniverse have already provided the same function for free, so if you're here to use the grid bot, there's no need to buy a package.
HAASONLINE
HaasOnline is a paid cryptocurrency trading platform that is unlike any other. Like the other mentioned trading bots, it offers standard trading bots for strategies such as arbitrage and market making, and other tools.
With the release of HaasScript, their scripting language, you can create very complex trading bots with an easy drag & drop scheme or an Intelli-Sense editor. You also have the ability to backtest your strategies before making live trades on over 25 exchanges.
SHRIMPY
Shrimpy is a paid service offering a trading bot that is great for rebalancing. This is also the feature that sets it apart from other bitcoin trading bots. It helps you automate your portfolio and balance it to a certain ratio.
It is a bot specifically designed for portfolio management, indexing, rebalancing, and strategic backtesting. It supports more than 10 cryptocurrency exchanges.
In the case of Shrimpy, it only makes a few trades per day.
CRYPTOHERO
CryptoHero allows easy and free automation of transactions directly from your phone. No coding knowledge is required to use this solution. With CryptoHero, you can trade popular cryptocurrencies like Bitcoin or Ethereum almost 24/7 based on a wide range of technical indicators.
CryptoHero supports multiple exchanges, allowing you to track the results of all cryptocurrency trades individually or aggregate them across exchanges through one app.
Bots can be configured using technical indicators. You can enter a trade based on one indicator and exit based on another, all without writing a single line of code. CryptoHero also offers predefined settings for popular technical indicators and allows collaboration on multiple preset rules.
You can also test your robots with historical data before deployment. You will get a rough idea of the performance of your trading robot based on real data with different trading frequencies over different time periods, in intervals of up to 12 months.
BOTSFOLIO
Botsfolio conducts a risk assessment in the form of a questionnaire and then recommends the best cryptocurrency investment strategy that you can automate. Trading bots are predefined, and strategies are recommended based on your financial goals, risk appetite, and financial situation. This makes it easy for users to trade cryptocurrencies without any trading experience or coding skills.
The tool has robots for 5 different investment styles:
Value investing
Hedged trading
Futures trading
SIP index
Fixed income.
They have automated various investment styles used by professional hedge funds and investment banks.
The most well-known is the Hedged trading bot, which ensures active trading while reducing potential losses by using certain protective measures.
The setup is very easy because all you need to do is connect your Binance account and Botsfolio will do the rest automatically.
It offers a 1-month free trial version, and the cost of robots ranges from $1 to $85 per month.
TRALITY
Despite being a relatively young solution, Trality has been included in the list due to its strong focus on the bot development process and professional nature of the platform. Unlike most other solutions, it does not provide ready-to-use bots, but instead provides everything you might need to develop a professional algorithm on your own.
One unique feature of Trality is its in-browser code editor, which allows you to write even the most complex and creative strategies in Python with lots of unique order types. However, if you are not a professional trader or Python developer, this is not a limitation. Trality has another product called the "Rule Builder," which helps you create a bot without the need for programming skills. Simply connect your trading logic with a simple drag and drop interface and you're done.
The platform also comes with a fast and competent backtesting tool that helps you fine-tune parameters and verify your ideas. Once the bot is ready, it can be configured to trade live on popular exchanges like Binance, Coinbase Pro, Kraken, and Bitpanda.
Lastly, it's worth noting that the platform has a fair pricing model that caters to users of all experience levels. The starter plan is completely free and unlimited.
SUMMARY
Using crypto bots is not difficult. First, you need to create an account on your chosen platform. After registration, you can use the demo option or deposit directly. For most providers, the minimum initial amount is 250 EUR.
After paying for the robot, you can run your own software.
All crypto bot transactions are processed by the bot itself. It works according to a predetermined algorithm and decides automatically. Users only need to routinely check the system's activity and change settings if necessary.
Some trading robots allow traders to set a limit at which point automatic trades will be completed. Such a function can protect potential profits and prevent excessive losses.
Some platforms also allow you to trade manually. This feature is recommended, especially for experienced people. Manual trading can be turned off at any time and returned to automatic trading.
Crypto bot providers usually provide an overview of the cryptocurrency market on their platform. It gives you an idea of the coins that are currently popular. It also allows you to familiarize yourself with investor recommendations.