What Is a Crypto Trading Bot
Trading bots are widely available programs connecting to the cryptocurrency exchange of a user and doing business on their behalf.
They work with a variety of indicators and signals, including moving averages and indices.
The idea is simple: to help users in the markets make money while not wasting much of their time.
The underlying assumption is that computers are much better than humans when trading.
Because of market volatility, trading bots have become increasingly popular among traders by allowing them to stay in charge of their trading at all times, with the bot not sleeping even as the trader is.
Since most cryptocurrency exchanges allow you to use an application programming interface (API), through a program, usually automated software called trading bots, you will be able to use this to pull information from the exchange and make specific changes to your account.
In addition, a properly configured bot allows for faster and more efficient execution of trades than the trader would be able to do manually.
Such decisions are taken by bots by tracking the price movement of the market and by responding in compliance with a collection of pre-programmed laws.
Usually, market behavior such as size, orders, price, and time will be analyzed by a trading bot, although they can usually be configured to match your own tastes.
How Do Crypto Trading Bots Work?
That’s where we’re predicting.
Some data will go into the signal generator, and from the other side a buy or sell signal will pop up.
If you see any bot’s using “technical indicators,” then it’s probably a good idea to try not to make contact with your eyes and slowly return.
This takes the signal to buy or sell, then decides how much to buy.
As in, should we devote everything or just a portion of our resources to this trade?
Do we have to buy everything in one go or do we have to average it?
So now we know the direction, we know how much we want to buy or sell, next to that is the part that does the trade.
See, if you have a lot to buy in one go (say you’ve got to buy a total of $5,000,000 for 250 customers), then you probably don’t want to do all this in one trade because you’re unlikely to get a good price.
If you’ve got the exact same bot as 500 other people and you’re all running in disjoint instances (i.e. they don’t communicate with each other), this will really give you unfavorable pricing.
All three parts, signal, risk, and execution, need to apply their own separate algorithms and processes of optimization.
If you have a bot that fudges or worse through any of these parts, it will not hold you in good stead for profitability.
Top 10 Best Bitcoin Trading Bots in 2020
Most of the crypto trading bots are capable of doing what you configured them to do. However, in a market as volatile as the crypto market, one needs to be ready to adapt to the sudden change in market conditions. This is where one would need a smart trading bot like the 3Commas trading bot.
You might think that no trading bot can be smart enough to adapt to the changing market conditions. However, the 3Commas bot comes with a unique feature called the trailing loss and trailing profit. When using any other trading bot, you would be able to set stop losses to avoid the overall loss and take profit to secure the profit that you made. However, if the coin goes on to perform better after the bot sold your position, there is no going back.
The trailing feature offered by the 3Commas bot helps to achieve exactly that. The bot will analyze the market conditions and will make sure to sell your coins at the right time. Thus, ensuring the maximum return of your investment. This feature that allows the bot to act quickly to the changing market conditions makes the bot special.
Apart from this, the 3Commas bot provides all the features that you can see on a normal trading bot such as stop loss, take profit, automatic trade, etc. The bot is hosted online which makes it available always. You can access the bot from any internet-connected device by visiting your account on the website.
The bot can be paired with 13 of the most popular crypto exchanges including Binance, Kucoin, Bittrex, etc. The bot offers three different packages with the cheapest one costing you $22 per month and the most expensive package costing you $75 per month. You will, however, be able to use the bot’s services for free if you have an account on the Huboi exchange.
Given the current bearish trend in the crypto market, it has become very hard you anyone to make money. So, why not give the 3Commas bot a try and see how it can help you generate income even in a bear market.
Cryptohopper is a newcomer to the automatic trading scene but has been rapidly growing in popularity for several reasons. For one, they are the only cloud-based cryptocurrency bot on the market, meaning their bot continues trading when the computer is off.
Their bot is also very easy to pick up for new users, due to the fact that they are the only trading bot to embed external signalers, allowing inexperienced traders to let their bot trade on autopilot under the expertise of these signalers. Traders with more experience can also take a manual approach, by configuring sales based on multiple technical indicators.
Next, to this, Cryptohopper offers to backtest, trailing stop loss (including features to let your bot only sell with profit), ability to trade using multiple exchanges and generally pleasant user interface.
Cryptohopper is also the only bot to offer a free trial for a month, with the ability to upgrade to Bunny ($19 p/m), Hare ($49 p/m) and Kangaroo ($99 p/m) if users feel like sticking around.
Gekko will always be among the top of the list. It is by far the most popular – probably because it is a free Bitcoin trading bot. It can be downloaded from the GitHub platform (relax, you do not need to be a tech guru to navigate this platform. But if you need some help, there are numerous YouTube videos to show you how to go about it).
Gekko is an open-source piece of software that is constantly being improved upon by talented developers all around the world. This trading bot is supported by most cryptocurrency exchanges including Bitstamp, Poloniex, and Bitfinex.
Gekko is easy to use, fully automated and straightforward. For newbies in the bitcoin industry, learning the ins and outs of this trading bot will be the least of your worries. The software comes equipped with essential trading features. These features include a web interface that is designed to monitor your trading strategies and data. Also, the bot can run on some backtested data and help you visualize the trade results.
The bot is designed to run on most major operating systems including macOS, Linux, and Windows. The bot can also keep you updated through telegram, email and other social platforms. However, you should bear in mind that Gekko is not a high-frequency trading bot and as such, it does not execute the so-called arbitrage trades.
The cryptocurrency market is subject to high volatilities which makes it difficult to predict the right time to invest. Kryll.io is an automated trading bot that helps to find a way around this problem.
Launched in 2018 by a team comprising of Luca Benevelo, Philippe Longere, and Paul Collorafi, it consists of some of the most advanced features for creating your trading strategy which can be used by people without any prior programming experience. The platform will provide you with simple and powerful tools that will enhance your creativity. A very flexible editor, Infinite possibilities!
Drag and drop condition or indicator blocks, connect them and create basic or advanced automated strategies. All this can be created without any line of code!
Kryll.io offers various blocks that can be linked; such as logical operators, market indicators, value triggers, improved technical analyses, information and notification blocks. As the platform evolves, new functionalities will be added, such as risk analysis tools and new blocks, some of which are based on Artificial Intelligence such as Sentiment Analysis and trend prediction by Deep Learning.
You can test your strategies on the entire history of cryptocurrencies up to 4 years with 1min candles and improve them with a few clicks.
You can also use the marketplace if you don’t want to create strategies.
The marketplace connects the creators and users of the platform. Simply select the strategy that suits you based on the pair you want to trade on and let it do the work for you!
- Visual Strategy Editor, no need to learn to code. Simple and powerful Drag & Drop Editor with top indicators such as (MACD, RSI, ICHIMOKU, SMA…). The editor also includes TradingView Charts with all technical tools available.
- Free and unlimited Backtesting on more than 4 years history at a 1-minute candle. This allows the Trader to test his strategy on the different histories of a pair and make the most of it.
- Low fees. 1% per month of strategy initial capital, plus Holding program that can reduce this cost up to 95%. (ie: 500$ strategy capital will cost 5$/month or 0,5$/Month with Holding Program)
- Its API keys don’t need deposit or withdrawal permissions.
- Affiliate program. Users can refer friends and earn up to 45% commission on their platform-related fees.
- Publisher mode. Users can publish their strategies on the Kryll marketplace and receive significant passive revenues.
Although the cryptocurrency trading bots are still in its initial stages of development, there is a free beta version of the trading bots available for use. Even though it is quite new in the market, people have readily opted for the Zignaly bot. The completed version will be available to the users for a chargeable fee.
One amazing thing about the Zignaly trading bot is that it can be integrated seamlessly with TradingView. Even though the bot is in the beta stages of development, the users haven’t found any issue with the above-mentioned integration, meaning that the developers have designed the software keeping in mind the ease of access for the users.
TradingView has an API that works on the Binance trading exchange. Thus, the Zignaly bot can be used to execute the various trading strategies directly on Binance. While the current support for the exchange on the beta version lies only with Binance, there are plans to include other exchanges in the near future.
According to the developers, there are plans to include exchanges like KuCoin, Bittrex, Poloniex, and CoinBase Pro in the list of the supported exchanges for the API integration of the Zignaly bot.
There are some unique features that have been integrated into the trading bot by the developers. These include no limit on the pairs that you can operate on and an option to edit the positions as and when you choose. These have made trading quite a lot easier since there is no need to upgrade to any Pro version to enjoy features such as the ones mentioned above.
The Zignaly bot also prides itself on transparency. On the official website for the Zignaly cryptocurrency trading bot, there is detailed information about the founders and the rest of the team along with their various social media profiles so that the users can connect with them directly.
The aim of the developing team is to provide users around the world with a trading bot that is available on all major exchanges. The developers have created a user-friendly ecosystem on the bot, offering quite a lot of features in the beta versions and bringing a lot more in the complete version.
This is a new trading bot that is being supported by Huobi, OKCoin, Bitfinex, Bittrex, and Poloniex. Its developers are constantly making changes to the trading bot, and you should expect it to be supported by multiple other exchanges as well in the future.
This bot comes with two trading strategies including Margin Maker and Ping Pong. So far, Leonardo is the best-looking trading bot regarding design and graphics. It also is fully customizable.
Initially, the bot cost about 0.5BTC every month. Now, however, it is available for about $129 (a lifetime license).
This Gunbot features lots of inbuilt strategies which includes Bollinger Band, Ping Pong, and Step Gain. Most of its users think that the BB strategy is the best and will rake in huge profits for them.
This trading bot, however, comes with 3 package plans that vary in price. The prices range from between 0.1 Bitcoins to 0.3 Bitcoins (note that these prices are subject to change).
Gunbot is on several cryptocurrency exchanges including Poloniex, Kraken, Bittrex, and Cryptopia.
When using this trading bot, you are advised to pay keen attention to your trade. Why? Well, the trading bot is configured to deal with the volatility in the market. In case of the volatility spikes, you should turn it off.
Gunbot is our go-to trading bot and is for sure the best bitcoin trading bot!
This is yet another free bitcoin trading bot. Like Gekko, it is an open-source bot. It is available for use on all major operating systems and can be modified to fit every user’s preferences. Zenbot has been created using artificial intelligence. As such, unlike Gekko, it can exploit arbitrage opportunities and execute the high-frequency trades. Additionally (and this is a huge plus for this trading bot), the software can perform multiple cryptocurrency trades at the same time.
The trading bot is supported by Bitcoin exchanges with the likes of Kraken, Gemini, GDAX, Bittrex, Quadriga, and Poloniex. The developers of this trading bot maintain that they still are working to improve on the bot and in the future, it will be supported on all exchanges available.
This is a trading bot that was created by HaasOnline back at the beginning of 2014. The trading bot is supported by many Bitcoin exchanges including Bitfinex, Poloniex, BTCC, Huobi, Kraken, Gemini and GDAX. It not only trades Bitcoin but altcoins as well on the various exchanges.
While this trading bot is designed to analyze the market information on your behalf, it requires some input to act upon regarding the trade execution. The bot is customizable and comes equipped with some technical indicator tools. With these tools, Haasbot can ‘predict’ trend patterns which can prove invaluable to Bitcoin trading success.
To get the best results, all who decide to use Haasbot should be fully committed to the course. This trading bot costs about 0.32 Bitcoins every 3 months.
- Crypto Trader
This is by far one of the most popular Bitcoin trading bots among traders. It is for the most part cloud-based which means that it does not require installation on a physical computer and can be modified by its user for ample and rewarding results. Algorithmic trading modifications can be made to the bot in a few minutes. The modifications are simple to make, and any newbie with a little guidance can hack the process.
It is worth pointing out that the Crypto Trader comes with a strategy market feature. This feature allows you to trade strategies with other traders. Another cool feature includes a backtesting tool that enables users to test the trading strategies against the backtested data as well as the prevailing market conditions. Crypto Trader is supported by exchanges like Bitstamp, BTCC, and Coinbase.
GET STARTED WITH CRYPTO TRADER
- BTC Robot
This was among the very first Bitcoin trading bots in the industry. It is among the pioneer trading bots. The bot can be downloaded on the major operating systems but comes at varying prices for each platform. Generally, you should expect to pay more for it on a MacOs than on Windows OS.
The trading bot has proved easy to install as well as use. However, some individuals have gone on record to state that there are some technical bits that prove challenging to grasp. Nonetheless, most have managed to make substantial profits. The BTC Robot features a trial period with a 60-day refund policy – how cool is that?
Cryptocurrency is the thing right now and will be for the foreseeable future. Bitcoin trading can be done by literally anyone who has got the interest. It might be confusing for newbies at first, but they soon get the grasp of things. Given the presence of many trading bots, it is imperative that you do your due diligence. Do your research and read reviews to ensure you are dealing with a reliable and trustworthy trading bot and company.
Are Free Bitcoin Trading Bots Real?
While most of us, you included, might be skeptical when you hear of free things that can generate profits, there are a handful of open-source bitcoin trading bots that indeed can be classified as a free bitcoin trading bot. Zenbot and Gekko being the favorite two of the free crypto trading bots offered, they are for sure great. However, they do require some technical skills to set up and use, thus, we would rather encourage you to try a free month of Cryptohopper, since it is beginner-friendly, yet suits the advanced trader, and is cloud-based, meaning you won’t have to have a machine (computer or VPS) constantly running to be able to day trade. There is no doubt it as to why it has deserved the spot as the best crypto trading bot on our list. And since it offers a free trial, why not sign up and try yourself?
Advantages of Bitcoin Trading Bots
With the increased use of the cryptocurrency trading bots, human error is eliminated or minimized, which results in improved accuracy. Trading bots offer constant interaction with the market, which means that you can go to sleep or go about your day and have it do all the work for you. Not only that, but you can adjust it to monitor, analyze, and trade multiple different assets in different markets.
These bots can analyze as many cryptos as you will indicate in their algorithms and work with the number of exchanges you want them to cover. In short, trading bots maximize the profit potential by employing a mechanism that is responsive to market shifts around the clock.
While a human can take up to a few minutes in order to calculate and recover various formulae, a bot can calculate much faster, sometimes even nanoseconds with accurate results. This feature is of great use when the price of a currency is subject to frequent change. Automated systems have the ability to generate orders as soon as trade criteria are met.
Sometimes, changes in prices are very quick since the prices are constantly fluctuating and investors are often unable to effectively deal with these changes. The advantage of bots is that they can work twenty-four-seven and make it a much faster process, while a trader would have to spend hours together for trading alone.
Automated trading systems minimize or sometimes even completely eradicate emotions, as bots do not possess any emotions, unlike humans. By keeping the emotions in check, traders basically have an easier time sticking to the plan. Besides, trade orders are executed directly after the trade rules have been met, so traders can’t undo or question the trade based on emotions.
Trading Bot Strategy Types
Although the cryptocurrency market is much less mature than other financial markets, the digital nature of the market has meant that, despite the fact that it had significantly less time to integrate algorithmic trading, the technology did not slowly catch up with its competitors in providing a trading bot service, enabling investors to access a wide range of trading styles.
One of the key techniques that investors used to make profits in the early days of cryptocurrency trading was arbitration – i.e. purchasing assets in one market and then selling them in another at a higher price, thereby making a gain on the difference.
Since cryptocurrency exchanges have been decentralized, there have often been large differences between rates offered on different exchanges, which means that gains can be made by arbitration.
Trading bots can also allow investors to make use of the strategy of market-making.
This strategy provides for “continuous buying and selling prices on a variety of spot digital currencies and contracts for digital currency derivatives” in an effort to “capture the spread between buying and selling price.”
To adopt market-making techniques, it includes both buying and selling limit orders close to the existing market position.
When prices fluctuate, in order to profit from the spread, the trading bot must automatically and continuously position limit orders