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Crypto Trading Bot

Cryptocurrencies are famous for their high volatility, with values fluctuating dramatically even within minutes. Traders may participate in cryptocurrency trading from anywhere in the globe and at any time of day. In many aspects, the cumulative effect of these variables reduces the efficacy of human bitcoin trading. 

In many situations, investors are unable to respond rapidly enough to price fluctuations to make the best investments. Investors are unable to devote as much time to the cryptocurrency markets as is required to consistently make the best investments. This would need 24-hour surveillance of trading exchanges all around the world. This is where cryptocurrency trading bots come into play. They are nothing more than automated trading and transaction execution systems that work on behalf of human investors.

What is a Crypto trading bot ?

Crypto Bots for bitcoin trading are a set of trading strategies AI-powered programs that automate cryptocurrency trading on your behalf for the study and interpretation of the market condition. They are able to acquire market data, evaluate it, measure and monitor market risk, and purchase and sell bitcoin assets in a user-friendly interface.

It’s like hiring a professional to handle your crypto trading while you sit back and watch your profits increase. For example, you may program a bitcoin bot to buy or sell Bitcoin when the price falls below a certain level. Using crypto bots may save you a lot of time and money compared to hiring human professionals.

How a crypto trading bot work?

In terms of software and hardware, each bot has its own set of needs. An investor must understand how to best use a bitcoin bot in order to optimize its influence. 

For example, investors must have their accounts set up on one of the various supported exchanges with funds in it. They must still make investing decisions, such as when to purchase or sell, in many situations. 

The following are the main components of most crypto trading bot:

1. Monitor the Market Data

This module will collect raw market data from many sources, evaluate it, and determine whether to purchase or sell a certain cryptocurrency asset.

2. Prediction of the Market Risk

This module utilizes market data to determine the market’s potential risk.

3. Purchasing/Selling Assets

This module makes strategic purchases and sales of cryptocurrency assets using APIs to avoid buying tokens in bulk, and to make quick purchases in some cases.

The 5 Crypto Trading Bot types?

Crypto trading bots come in a variety of shapes and sizes and many algorithmic trading strategies. The arbitrage bot is one of the most popular. Arbitrage crypto trading bots are programs that compare prices across multiple exchanges and trade appropriately to take advantage of price differences. Because the price of a cryptocurrency varies from the multiple supported exchanges to the next, crypto bots that can move rapidly enough can outperform trading exchanges that are slow to update their values. 

Only a few other forms of crypto trading bots employ past price data to evaluate trading methods, possibly assisting investors. Other crypto trading bots are built to make transactions in response to certain indications, such as trading volume or price. 

Here are a few examples of trading bots that may be used with API integration:

Market Making Bot

A service that quotes constant passive trading prices in order to offer liquidity while also making a profit in the process.

Arbitrage bot

Takes advantage of minor market discrepancies. It is a type of trading that generates money by taking advantage of price discrepancies between identical or comparable financial assets traded on various marketplaces.

Basket Orders Bot

Using this bot, you may conduct transactions on many coins at once, with the option of hedging against other coins.

Smart Order Routing Bot

The trader can use the Smart Order Routing bot to discover the optimal price for your order across all crypto exchanges and execute it.

VWAP Bot

A trader can get the best price by dividing a large order into many smaller ones during the trading day with this bot.

Price Mirroring Bot

This bot makes money by using liquidity and hedging opportunities from other marketplaces. 

A trader might utilize the Triangular Arbitrage bot to take advantage of the arbitrage opportunity between three distinct FX currencies or Cryptocurrencies.

PROS and CONS Crypto Trading Bot

The following are some of the most important features, benefits and disadvantages of crypto trading bot:

Crypto Trading Bot Benefits ?

More Influential

Crypto trading bot can easily process large amounts of data and come to reasonable conclusions.

Efficiency

There are no delays or, more crucially, human errors to worry about. As long as the bot obtains accurate data and uses appropriate algorithms, it will be able to trade assets with a higher probability of profit 24 hours a day, seven days a week.

Emotionless

Every choice made by a crypto trading bot is based on the perceived risk. It has no fear of losing or hunger for profit, unlike humans. A crypto trading bot, on the other hand, always removes emotion from the equation.

User-friendly interface

If you’re a novice, a straightforward design and simplified layout combined with a good smooth onboarding process reduces your chances of being confused and overwhelmed.

Most of the trading bot offer free trial plan or paper trading which give you time to take the leap smoothly. Ones you ready you can utilize it when your trailing stop.

Crypto Trading Bot Drawbacks ?

Situations like the continuing Covid-19 epidemic can have a surprising influence on the market condition, and it’s impossible to forecast how these occurrences will affect the economy. To keep piling up the profits, you’ll need a psychologically-driven plan. 

Because crypto trading bot are unable to do so, this is one area where you must rely on your intuition. Crypto trading bot efficiency can also be harmed by programming mistakes.

You’ve chosen your bot, configured its trading strategies, and kept track of its progress. You now have to file by yourself cryptocurrency trading taxes on your transactions to finalise with your tax reporting.

Which exchange for your Crypto Trading Bot ?

1. Crypto Trading Bot for BINANCE

Binance is an exchange that can be used with all the trading bots based plateforms like: Pionex, Napbots, Trality, Cryptohopper, 3commas, Quadency, Coinrule, Bitsgap, TradeSanta, Shrimpy, Kryll, Zignaly… etc.

2. Crypto Trading Bot for KRAKEN

Kraken is a very popular cryptocurrency exchange. With support for nearly 30 cryptocurrencies, 5 fiat currencies, as well as related deposit and withdrawal methods, Kraken offers the kind of flexibility that isn’t often found with other exchanges. That’s what makes it a great fit for trading mechanisms, including crypto bots like Bitsgap, Napbots and Cryptohopper.

3. Crypto Trading Bot for FTX

FTX is one of the newer cryptocurrency derivatives exchanges on the market  which is a quantitative trading and cryptocurrency liquidity provider. The ability to integrate and automatically trade on FTX is available with most crypto trading bots.

4. Crypto Trading Bot for OKEX

OKEx is one of the major cryptocurrency exchanges, with over $1.5 billion in revenue from its futures trading platform alone. These are the top 5 crypto trading bots based for okex: Napbots, Cryptohopper, Bitsgap, 3commas and Shrimpy.

5. Crypto Trading Bot for COINBASE

Coinbase provides a digital currency wallet service and a platform where users and consumers can transact with multiple digital currencies, that’s what makes coinbase one of the main Cryptocurrency spot-trading exchanges out there that fit all crypto trading bots.

Are Crypto Trading Bots profitable?

Trading bots are just software, therefore profits aren’t guaranteed. Additionally, automated trading platforms and trading bots come with a slew of dangers. Trading bots are generally built for traders rather than investors, so keep that in mind.

How to make Crypto Trading Bot?

The following are the stages to create a crypto trading bot: 

Backtesting: It is important to backtest your crypto bots against previous market condition data before trading. You must also acquire access to the exchange APIs key in order to collect high-quality market data. 

Implementation of the Strategy: The next stage is to define the formulas that will help your bot decide when and what to trade. You should backtest your approach when you’ve done designing it to evaluate how well it performs. 

Execution: At this point, your logic will be converted into an API key request that can be understood by the bitcoin exchange. You may practice your approach with fictional money with several crypto bots. 

Task scheduler: It’s now time to automatically trade by setting a job schedule.

What is the best crypto trading bot?

1. NapBots

NapBots is a cloud-based trading platform that allows you to automatically trade. This means that transactions can be conducted based on the crypto strategy you choose. Napbots primary database is price, including both trend-following and mean reversion algorithms (weekly, daily, and hourly). 

Features: 

  • It provides a secure trade environment. 
  • More than 15 trading methods are available. 
  • Allows you to easily manage your funds. 
  • Using an API key, you can keep your money safe. 
  • Non-technical traders can switch off “Bot Only mode” and place trades without using the bot’s automated algorithms. As the only bitcoin bot that combines trading strategies. 

Cost: NapBots pricing packages are separated into three distinct price levels based on transaction volume, from 19$ to 99$. Each plan has a trading limit that may be extended.

Binance, Kraken, Bitfinex, Bitmex, Bitstamp, OKEx, Bitpanda, and Phemex are the supported cryptocurrency exchanges.

2. CryptoHopper

Cryptohopper is a cloud-based trading tool that allows users to manage several cryptocurrency assets across eight main (legally recognized) exchanges. 

Cryptohopper’s users will be able to employ a variety of semi-automated trading tools. Cryptohopper also offers social trading, which lets traders pool their resources and make money together. 

Pricing: 

Cryptohopper offers a three-tiered price structure for their trading fees, the lowest of which is free for a week. 

The Pioneer Plan Explorer is available for a free 7-day trial. Starter Subscription ($19/Month) 

Cryptohopper’s Hero Hopper plan, which costs $99 per month, and the Adventure Hopper plan, which costs $49 per month.

The following exchanges officially support Cryptohopper: KuCoin, Binance, Coinbase Pro, Bittrex, Poloniex, Kraken, Huobi, and Bitfinex.

3. 3Commas

3Commas  connects up to 23 major cryptocurrency exchanges, allowing you to manage all of your accounts in one location. It includes a sophisticated trading terminal that allows you to build your own trading strategies and replicate those of great traders. 

Pricing: 

3Commas does not provide a free account, and the STARTER plan costs $14.50 per month. Monthly trading fees for the PRO and ADVANCED programs are $49.50 and $24.50, respectively. Only PRO and ADVANCED account users have access to the trading bot. 

4. Stackedinvest

Trading bots developed by top coders are available from Stackedinvest to assist you assess risk and leverage. They are able to open both long and short positions. They also have risk management built in for greater control. You can do so by establishing a take profit or stop loss order.

Pricing: subscription price ($99-$250)

Exchanges: Bybit, Binance, FTX.

5. Kryll

Kryll.io is one of the finest crypto trading bots that can help you create a strategy even if you have no prior experience with crypto trading. It connects to exchanges directly without requiring API permission. This app is available on both a tablet and a smartphone. 

Features: 

  • Technical analysis is simple to do with the technical indicators. 
  • Available seven days a week, 24 hours a day. 
  • With just a few mouse clicks, you may customize your approach. 
  • You may perform as many backtests as you like (the process of applying a strategy to historical data). 

Pricing: free

Exchanges: Binance, Binance.us, Bittrex, KuCoin, Bitstamp, Kraken, HitBTC, FTX Liquid, Liquid.