It is evident that no human attempt is as effective as a bot when it comes to trading. Hence the need to seek that extra advantage using them. To use automated bots effectively, a good knowledge of how they work and the best ones on the market currently is necessary.
Crypto Trading Bots
These are simply automated programs that execute trades based on predefined conditions and other elements depending on build. These bots significantly ease the efforts required for trading, monitoring the markets day and night without pause, an impossible feat for the average trader. Since bots have no emotions, they are invulnerable to trading related biases and human error.
Different trading bots are built to execute various strategies along with unique features. When considering employing the use of a bot, it is best to assess the aspects of crypto trading that seems the most tasking for you. This could be repetitive tasks, the need for precision, or simply monitoring markets while you focus on other things. Whatever the case may be, there is a bot with a strategy to ease every tasking aspect of crypto trading.
Common Crypto Bot Trading Strategies
Crypto and forex bots share similarities when it comes to trading strategies. Certain strategies are present in both markets. Bot strategies are an important consideration as they determine the level of automation needed for more successful trades. Some common crypto bot strategies:
Arbitrage Bots: These are bots hardcoded to function based on the arbitrage strategy. Based on the idea that an asset can have two different prices simultaneously, they examine prices from various exchanges and take advantage of variation. For instance, a particular token has a price of $4.02 in Exchange A and $4.05 in Exchange B. An arbitrage trading bot simply buys the coin at Exchange A and sells it at Exchange B at the same time, resulting in a profit of $0.03 per coin.
Mean Reversion Bots: Bots employ this strategy based on the idea that an asset will eventually revert to its average price. This assumption has its roots in the overall market psychology. For instance, If the price of an asset X increases from an average of $1 to $1.75, there would be a mass sell-off, which in turn will bring down the price back to the average of $1. Alternatively, if the asset experiences a dip in price to $0.75, this will be viewed as a bottom by the market and through accumulating as much of the asset as possible, the price will climb back up to $1.
Momentum Trading Bots: Just like the name implies, these bots employ a strategy based on the current trend. The objective is to buy when there is a positive momentum and then immediately sell when the market momentum is in reverse. The Idea behind this is that the price of an asset will surpass its average and eventually run out of momentum causing a dip in price. For effective momentum trading, buy-in and sell-off timing is critical.
Top Bots to match every Crypto Trader
Best all-purpose trading bot: Cryptohopper provides an automated bot to cater to the needs of every trader by offering a variety of options depending on your trading style. Cryptohopper has options for the seasoned trader seeking to design their own strategies, also for newbies looking to copy the best strategy templates.
The platform currently supports eight popular exchanges. This includes the likes of Binance, Coinbase Pro, Bitfinex, and KuCoin. Pricing options range from a free plan $99 monthly.
Best bot for Python devs: Trality was created with Python developers in mind. The platform offers a state-of-the-art Python API with the option to fully design and implement their own strategies using Python. Although a heavy focus on Python devs, Trality also caters to users with no coding background. Its graphical user interface allows users build their bot’s logic by simply dragging and dropping indicators and strategies.
Trality currently supports Binance, Coinbase Pro, Kraken, Bitpanda. Pricing options range from a free plan €60 monthly.
Best bot for Coders: Gunbot is a special tool aimed at the advanced trader. It gives traders the opportunity to code their own strategies into the bot’s script, allowing full customization freedom. The platform also offers a number of innovative pre-tuned strategies for a cutting-edge automated trade experience.
Gunbot supports major exchanges such as Binance, Bittrex, Coinbase, Poloniex, Coinmama, EXMO, Huobi, KuCoin, Bitfinex, Cryptopia, Kraken, and CEX.io. Gunbot offers a lifetime licenses fees ranging from $99 or .002 BTC to .0175 BTC.
Best bot for the advanced Trader: 3Commas is a platform equipped with a highly visual interface providing advanced traders all necessary information to curate the perfect instructions for their bots. Users can also copy trading strategies and signals from successful traders. The 3Commas dashboard provides in-depth analytics, giving users good insight on how well their trades are performing in real time.
3Commas boasts of support of 18 exchanges including Binance, Coinbase, Poloniex, Coinmama, Gate.io, Huobi, KuCoin, and Bitfinex. Pricing options range from a free plan to $99 monthly.
Best bot for beginning traders: CryptoHero boasts of a user-friendly interface and affordable pricing, making it easy for newbies to create and employ their bots with simple instructions. The platform is available on Web and mobile (iOS and Android). Cryptohero currently supports popular exchanges like Binance, Bittrex, Huobi, Okex, Coinbase Pro, FTX, KuCoin, and Bitfinex. Pricing ranges from free to $29.99 monthly.
Best bot for the social Trader: Shrimpy’s bot is focused on automated portfolio management and social trading which allows for users to copy successful trading strategies employed by other traders. Trading success could earn one a good spot on Shrimpy’s leaderboard. The platform also provides insights to help users track their performance and monitor the market.
Exchanges supported by Shrimpy include Binance, Bitfinex, Bitmart, Cex,io, Coinbase Pro, FTX, Gate.io, and KuCoin, amongst others. Fees range from $19 to $299 per month.
Best free trading bot: Ichibot describes itself as more of a free-to-use CLI (Command Line Interface) than a bot. Users are given complete freedom to design their automated trading strategies; 100% manual control. Since Ichibot requires coding experience, it will be mostly preferred by coders. The platform is only available on PC via its web console and options for a Windows or Mac download.
Ichibot currently supports Binance, FTX, Bybit, GlobeDX.
Crypto trading bots have proven to aid trading efficiency but with a variety of them currently on the market, the decision requires consideration of a few factors—features, cost, and ease of
use. Also, depending on your technical ability you could prefer a bot that allows for more in-depth customization of its code, or one with the simplest interface and tools. The good part is there is a bot out there for everyone.