Crypto trading bots are developed to run specific tasks with little to no human intervention. In the cryptocurrency space, crypto trading bots act as automated trading systems that initiate trades on behalf of the trader — usually trading one or multiple cryptocurrencies on an exchange platform. The question now is, do these bots really work?
In this article I will make it clear for you to understand the total concept of Crypto Trading Bots and how they work.
Key Takeaways:
- Crypto Trading Bots are time saving and costs saving
- AI ( Artificial Intelligence ) is a huge part of crypto trading bots
- There are different types of these bots
What are Crypto Trading Bots?
Crypto trading bots are automated systems that help traders buy and sell cryptocurrencies at a defined period. In other words, crypto trading bots are codes developed to execute trades. Instead of keeping tabs on market analysis and then deciding on which time to buy or sell, crypto trading bots do all this work and perform the analysis. Typically, a crypto bot can analyze and interpret the market to evaluate potential market risks.
You can think of these bots as outsourcing a task to a trader capable of trading the markets for you 24/7 while you proceed to do your other work. You can instruct a bot to carry out certain tasks for you. A common example is setting up a crypto trading bot to buy Bitcoin when the price drops to a certain point.
Crypto trading bots often save time and are more cost-effective than hiring human experts. And its main objective is to minimize loss and increase profits. A plethora of automated software allows traders to trade different crypto assets, including Bitcoin (BTC), Ethereum (ETH), Solana (SOL), and much more.
How do Crypto Trading Bots Work?
Crypto trading bots are designed to predict the flow of the market. Bot studies the previous flow and the current records, and analyzes this data to predict the most probable, profitable choice. But of course, they can’t guarantee you all wins. They are loaded with artificial intelligence and do what they are programmed to do, rendering them incapable of thinking outside the box.
The bots work in these ways;
Market Risk Prediction
Based on the details obtained from analyzing the market, trading bots can allocate risks. Traders can input specific codes and parameters, usually involving trading capital and stop limit.
Trade Executions
Crypto trading bots use APIs to automatically buy or sell cryptocurrency assets. These bots are able to execute multiple buy and sell orders within a short time.
Types of Bots
There are different types of crypto trading bots. In fact, some bots are developed for specific crypto trading strategies. A widely-known example is the arbitrage bot — used in crypto arbitrage trading. Arbitrage bots essentially analyze asset prices across multiple exchanges and execute trades in order to benefit from the market differentials.
There are other types of bots executing buy/sell orders based on indicators such as price and volumes. Additionally, some bots implement past information to execute trades.
Crypto Trading Bots to consider are:
1. Pionex
Pionex has 16 free in-built trading bots
By trading in cryptocurrencies on your behalf, Pionex’s bots assist you in making money for a tiny trading charge of 0.05%
The Grid Trading Bot, which enables you to sell high and purchase low, is one of its most well-liked bots
Contrarily, the arbitrage bot uses the future market supported by the broker system Binance in order to assist you in receiving a payout every eight hours
2. eToro
You may imitate other cryptocurrency traders’ deals, trading insights, and, of course, trading feelings using eToro’s copy trading tool
You have the option of paying to follow cryptocurrency traders or doing so for free
The platform has the advantage that you may view the portfolios, earnings, and other information of users you are following via their feeds
There is no specialized trading bot software available on eToro, nor is it possible to utilize bots to trade on the site
The dedicated cryptocurrency trading platform known as eToroX provides features for both retail and institutional traders
3. NAGA
This enables anyone to create automatic copy trading to copy experienced traders, NAGA is one of the top cryptocurrency trading platforms
After making a deposit of at least $250, this is done
Additionally, the NAGA copy trading bot makes it simpler for traders without trading expertise or bot development expertise to profit from investments with predictable or fixed returns
This is made possible by automatically imitating traders who use methods with fixed or predictable returns
4. CoinRule
A team in the UK runs the cloud-based trading bot, which was established in 2017
Binance, Huobi, Bitfinex, OKEx, and HitBTC are just a few of the cryptocurrency exchanges it may be connected to
There are no fees associated with trading
It enables you to take advantage of more than 7,000 methods by allowing you to develop multiple trading rules-based
Although it does not offer technical analysis (TA), users are still able to discuss trading advice and tactics using TradingView
5. CryptoHopper
The CryptoHopper is a cloud-based cryptocurrency trading bot that uses an algorithmic, programmed trading strategy and enables users to use outside signals to make smart trades
With nine different cryptocurrency exchanges, including Coinbase, OKEX, KuCoin, Binance, Kraken, Huobi, and many more, users can connect and use it
You can use it to take advantage of both free and paid signals from various sources
It is owned and run out of Amsterdam, Netherlands, and employs more than 30 trade indicators and more than 90 candle patterns
It trades more than 75 cryptocurrencies in addition to Bitcoin and is operational around-the-clock
6. TradeSanta
Although TradeSanta operates around the clock, you do not need to be using it to generate income
It is suitable for both novice and experienced traders
It can be connected to a variety of cryptocurrency exchanges, including Binance, Huobi, and others
It enables the employment of both long-term and short-term strategies, a variety of indicators, and an attentive support staff
Buy tokens at a discount and sell them high with lengthy trade
7. Shrimpy.io
Users may trade and keep track of their portfolios across many exchanges with Shrimpy, a portfolio management and trading tool, from a single interface
16 exchanges are available for asset management and trading
On the platform, trade automation or cryptocurrency bot trading is also carried out using a variety of indications and tactics
You can instantly copy the accounts you are following by beginning the automation button to automatically rebalance your portfolio
When the portfolio of the person you follow changes, your portfolio will automatically sell or buy when necessary
8. Zignaly
This cryptocurrency trading bot, despite being very new, gives you the option of creating your own trading strategy from scratch or using pre-existing ones
Because it is free to use and doesn’t reduce profits, it is among the best cryptocurrency trading bots
For those just getting started with crypto bot trading, it is a fantastic option
Crypto-bot trading operations can be automated partially or completely
It has several traders who can give you trading indications to use, there are just a very small number of exchanges you may link the bot to, including Binance, KuCoin, and 8 other cryptocurrency exchanges
9. Botsfolio
By linking a cryptocurrency exchange account and configuring your investment ideas, Botsfolio enables you to make cryptocurrency investments
No prior knowledge of trading is required
To design and implement trading bots, you don’t require programming expertise
It functions by exchanging your money, on the dashboard, you may then keep an eye on your trading activity and your gains or losses
For users with accounts on the cryptocurrency exchanges Binance, OKx, and Coinbase Pro, it offers automated trading
10. HaasOnline
One of the oldest and most famous trading bots for cryptocurrencies is HaasOnline
It is well-liked by seasoned traders who come from the stock and currency markets and aim to increase trading effectiveness and profitability
By employing the bot, you can access platforms, locate crypto exchanges using API keys, and connect to exchanges
You may thoroughly design, test, and improve trading strategies using your HaasScript programming language
As a result, even the most complicated trading strategies are possible to create
Advantages
Emotional Security:
Trading volatile cryptocurrencies come with a lot of emotional investment, and with emotions come mistakes, no wonder many crypto traders lose money to several common emotions such as greed and fear. The trading bot essentially eliminates emotions from trading and prevents traders from making biased trading decisions.
Speed:
Another advantage of trading bots is speed. Time waits for no man. These automated bots can instantly carry out thousands of trades across various time zones and markets. Since it is automated, trades are executed in a matter of seconds — way faster than trading manually.
Disadvantages
Volatile :
You can lose as these Bots aren’t immune to losses
Poor Designs :
Most of them are poorly designed overall
Marginal Return :
Bots provide only a marginal return which being highly technical
Conclusion
For many day traders, automated crypto trading bots can be a useful tool in trading the markets. However, it is important to treat crypto bots like any other tool with caution and knowledge. And with the frank admission that they can only ever be as perfect as the trader using them.
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