Cryptocurrencies continue to remain an unusually interesting modern phenomenon. They have achieved popularity very quickly – and don’t seem likely to lose it any time soon. Despite the current situation in the cryptocurrency market, digital coins continue to be an incredibly profitable investment tool that can give a huge profit on cryptocurrency exchanges or with long-term investments in these assets.
On the exchanges, you can get profit by manually opening positions after analyzing the market, examining the price chart, viewing data from technical indicators, etc. However, it is possible to carry out efficient crypto trading in automatic mode, using special crypto bots.
In this article, we will try to explain how cryptocurrency trading bots work and find out whether it is profitable to use them or not.
What Is Crypto Trading Bot
Effective trading on modern financial platforms is possible without direct participation in the trades as a speculator. This is also true for cryptocurrency exchanges, where the competent use of the capabilities of crypto bots can provide the trader a stable profit.
Cryptocurrency robot (crypto bot) is a specially created algorithm that uses different indicators, as well as a software system (scanner) to recognize market entry points and make transactions on behalf of the user.
In the crypto space, the ability to automate the trading process is in demand. Traders with coding skills and programming knowledge can create their own crypto bots or optimize existing ones for effective digital coins trading. The robot will trade crypto assets independently, providing steady income to its owner.
How to Choose Crypto Bot and Strategy
Whether you want to automate your purchases of USD/BTC or other cryptocurrencies, you need to know how cryptocurrency trading robots differ. The main difference is that some are free, while others are not.
In addition to that, you should also consider such factors as reliability, transparency, profitability, users’ reviews, ease of use, and security.
It is very important to make investment decisions yourself and not leave your bot unattended for a long time. There are some strategies that can help you to earn a profit. Let’s start with the difference between day trading and hodling investment positions
- Day trading is the strategy when you buy and sell something within one day. This type of trading depends on short-term price hikes. Cryptocurrency trading bots can be especially useful for day trading, as they can perform instant exchange operations 24/7.
- The long-term retention strategy in the cryptocurrency market is called hodl. The term comes from a typo in the word hold and carries a semantic connotation of hope for an increase in the exchange rate.
The above trading methods apply both to securities and cryptocurrencies. However, the strategies applicable to cryptocurrency transactions are not limited to this.
An arbitrage transaction is the purchase of cryptocurrency on one exchange with the purpose of selling them on another. For example, in January 2018, the price of bitcoins in South Korea was 43% higher than in the United States. That is why the simultaneous scan of various cryptocurrency exchanges using a trading bot is very useful.
Market making is another common trading strategy, a trader opening limit orders (a request to buy/sell cryptocurrency at a certain price). In fact, traders who choose this strategy try to buy cheaper and sell more expensive. They create a gap between the bid and ask prices, the difference between the maximum and minimum transaction prices.
Do Crypto Trading Bots Work?
Trading bots work by reacting to the crypto market. A lot of crypto bots use the exponential moving average (EMA) for market analysis. EMA is based on the past history of a particular cryptocurrency or the overall market. Sometimes it cannot be an indicator of future performance. However, cryptocurrency bots have constant interaction with the market. Besides, they have a lack of human factors such as emotions.
Cryptocurrency trading bots are on the market 24/7, which allows them to not lose their trading advantage. Having access to data from several exchanges and adhering to predetermined investment strategies, robots can make thoughtful transactions faster and more often than a human can.
Whether you create your own algorithms for bitcoin trading bots or choose from ready-made settings, you should be well versed in the cryptocurrency market and your own finances.
Top 16 Crypto Trading Bots
Robots that help crypto investors or traders make money in the cryptocurrency market are gaining more and more popularity, becoming in demand in modern online business. We chose X promising, stable algorithms that can help interested users earn on cryptocurrency in 2019.
CryptoHopper is a cloud robot for automatic trading on cryptocurrency exchanges: Huobi, Binance, Kucoin, Kraken, Poloniex, Bitfinex and others. The bot doesn’t charge any fees and has a lot of educational materials. However, the bot has a disadvantage, which is that its team is anonymous.
There is a free 7-day plan available to allow users to familiarize themselves with the platform’s features. There are 3 plans in total: starting, intermediate, professional. For the latter, arbitrage trading is available, the opening of 500 trading transactions with 75 cryptocurrencies, signals, etc.
3Commas.io is one of the most popular services for crypto traders. The service exists since 2017, is constantly being improved and adds new features.
In the Bots section, a huge number of trading bots and a sampling filter are presented. If you want to see bots that give 1-2% of the profit per day and have been working for 30 days, enter the necessary parameters and get a list. You can also create a bot that works on TradingView signals.
Shrimpy is a trading bot that makes it easier for traders to buy and sell cryptocurrency. It does so by automating these functions through preset signals. Established in 2018, Shrimpy works through a web-based application. Along with having a free version that offers most of its features, Shrimpy also has a premium account that gives users advanced features.
HaasBot is a comprehensive version of the trading robot, consisting of 4 separate algorithms. The robot uses up to 500 types of digital coins in trading operations. The program was developed in 2014, but there are already more modern options. There are two key features of this bot – it is paid and really effective, as many traders say.
HaasBot trades on virtually all major cryptocurrency exchanges (Bitmex, Kucoin, Binance, Gemini, BTCC, Kraken, Huobi, etc.). There are three levels of fees, each offering a different number of features to the client.
3-month license cost:
- basic access – 0.04 BTC;
- for advanced beginners – 0.07 BTC;
- professional version – 0.11 BTC.
Payment is accepted in BTC. You can compare plans and choose the one you need according to your needs.
Cryptotrader is a cloud bot for automating trading strategies without installing the software. It provides the ability to work on all popular exchanges. The service allows you to test the work of a trading robot in real-time or on historical data.
The cost depends on the chosen plan and starts for Basic+ with 0.0042 BTC per month.
Gekko is a free crypto bot on the GitHub web platform. The platform allows you to always use a unique function to create your own cryptocurrency bot with open source code. Then you just need to download the program, run it on a PC, set the parameters and wait for the earned coins.
Gekko has a lot of powerful, effective options that make it possible to optimize, correct and test trading strategies.
Gekko has some disadvantages:
- mono-currency. It is only possible to earn Bitcoin.
- a small number of cryptocurrency exchanges on which the bot works. Only following platforms are available: Poloniex, Bitstamp and Bitfinex.
The trading robot is easy to use. All you need to do is to create your own version of the Gekko bot and activate it. If there are no errors in the code and the correct settings are set, then the automated trading of crypto assets will immediately start generating income.
Crypto robot Gunbot is a paid bot for automated trading of virtual currencies. This platform attracts attention with its wide range of features that allow you to set the maximum level of trading risk, bring the cryptocurrency bot to the trading strategy used, etc. It is also important to note that Gunbot works on most currently operating digital coin exchanges, for example, at Cex.io, Binance, etc.
The plans offered by crypto traders provide for a different number of available features and cost from 0.0025 BTC (the simplest version) to 0.25 BTC (for professionals). You only need to pay the fee once.
Margin is custom trading terminal. The trading terminal presents about 20 indicators that can be superimposed on the chart. In bots only the Bollinger Band and EMA.
Bots are compatible with Binance, Coinbase Pro, Bitfinex, Bittrex, HitBTC, Poloniex, Bitstamp, Kraken, OKCoin, Huobi Pro, Bleutrade.
Bitsgap is an all-in-one platform that allows you to trade and manage crypto on over 30 exchange through one unified interface. The platform is working since 2018 and became very popular in 2019 due to its grid bot that allows traders to benefit from every market move.
The platform has a demo mode which allows you to practice trading without risking your own money. New users get a 14-day free trial on sign up.
Zignaly is a trading bot that gives you an opportunity to trade cryptocurrencies just for $12/month. The platform offers a truly user-friendly bot, which can be connected to your TradingView account and trade according to your favorite indicators. The only disadvantage is a small number of exchanges being available.
#11. Live Trader
Live Trader is a platform that gives access up to 1000 unique cloud trading bots. The bots work with the biggest cryptocurrency exchanges. The quantity of available bots depends on the plan you choose.
Zenbot is a great crypto trading robot. This bot is provided for free on the GitHub by that same name. The program can be installed on virtually all computer operating systems; it has an open-source code. Zenbot can make high-frequency transactions, and also allows you to conduct profitable arbitration of cryptocurrencies.
Cap Club is a platform for manual and automatic trading on cryptocurrency exchanges Binance and Bittrex. Tools offered on the platform make it easier and more efficient to trade:
- simultaneously working StopLoss and TakeProfit;
- setting personal signals;
- Trailing mechanisms for buying and selling;
- ready-made basic strategies.
A distinctive feature of the service is a visual editor with flexible parameter settings, which allows you to create strategies of any complexity and logic.
The free version on Cap.Clap can be used for as long as you’d like but has a limited number of strategies, API keys and notifications. In order to trade without restrictions, you can purchase the PRO version for $30 per month or $300 per year.
TradeSanta is a cloud platform that allows crypto owners to automate their trading on exchanges. Users can thus speed up their trading process, since bots can simultaneously track market changes for unlimited trading pairs and place hundreds of times more orders than manual trading.
TradeSanta has its own Telegram community and chat service, where Santa’s Helper provides support at any time of day or night. Judging by their chat, many users have already expressed satisfaction with the quick response speed of the Santa team.
ProfitTrailer is an advanced service with flexible settings for automating strategies. The domain was registered in July 2014, and the service itself was launched in September 2017. It includes dozens of fine-tuning options for trading – selecting coins by volume, changing the price in 24 hours, the maximum number of pairs to be traded, a coins blacklist, setting a percentage of the deposit that the bot cannot trade, trailers for buying and selling, DCA and others.
Traded pairs can be set manually or allow the bot to select pairs on its own in accordance with the settings: the bot analyzes the entire market and enters the position with a positive buy-strategy signal.
Botee.Trade is an advanced service for automating trading strategies of any complexity. What are the features? When you click on any bar, the side menu displays the values of indicators and signals for buy and sell strategies. Margin trading with leverage (Bitfinex). Strategies Take Profit, Stop Loss, Cross (price, indicator & indicator), Spread (StochRSI). Trailing buy and sell stops. The price of the bot is about $65.
Trading Bots for Leading Exchanges
Due to their decentralized system, cryptocurrencies cannot be faked. The Internet has made many exchanges world famous. If you don’t like Kraken, no one is stopping you from going to Coinbase.
If you are not ready to spend months to learn all about the world of digital currency, then a trading bot is the best investment for you. The payback period should be from 1 to 3 months if you choose the right strategy. Modern technology promises sound competition to appear as more people trade crypto, and as the cryptocurrency market grows, there will be even more opportunities for trading.