What is a trading bot?
A cryptocurrency trading bot is special software or application that trades cryptocurrency based on prearranged conditions. As a rule, crypto trading applications work this way —first, you authorize the bot to buy or sell an asset when it reaches a definite price rate. Then, your bot keeps an eye on placing and executing your order, so you do not need to monitor your platform the whole day to watch how prices are changing and what points they are reaching.
That’s important that you can set your crypto bot to execute orders according to your own trading strategy. Imagine you want to sell some coins at a price of $15 and repurchase them if the price falls back to $13, so you can earn on the price difference. Cryptocurrency bot providers usually
charge a monthly or annual fee for using the bot’s services, but here are free options, as well.
The main aim of this software is to increase income and eliminate losses and risks. These applications empower you to manage all your crypto exchange accounts in one place.
Types of crypto bots
The cryptocurrency market's trading strategies can run automatically using trading bots.
Such bots are built based on buy and sell strategies and are a usual thing in traditional and cryptocurrency markets:
- Trend trading bots
- Arbitrage bots
- Coin lending bots
- Market making bots
There are cloud-based and bots you can download and integrate with the most popular exchanges.
Crypto trading bots differ so that you can find the one built for both newbies and crypto experts. As it’s one of the hottest trends in crypto now, how is it possible to make the right decision and choose the best bot fitting your demands? Let’s have a look at various options and find the greatest.
Trend trading bots
This bot considers that very moment when an asset is on its pick and, after analyzing it, decides to buy or sell it.
If the trend shows the price is high, the bot will enter a long position. On the contrary, it will enter into a short place if the price goes down.
Trend trading bots indicate that an asset will be moving in the same direction as it is currently doing, and the trend trading bots make this fact work for them.
How do they understand whether the asset is in trend or not? They use price action or moving averages, momentum indicators, trend lines, and chart patterns.
This type of bot uses the concept of arbitrage. Arbitrage is a trade that utilizes price imbalance in different markets or forms. In inefficient cryptocurrency markets, this is especially relevant. You can benefit from the existing imbalance by purchasing and selling an asset.
That’s why arbitrage crypto bots are designed to find the difference between the coin’s price in different markets. Why? To buy the coin where the price is lower and to sell where it is higher afterward.
Coin lending bots
Another exciting way of earning crypto involves lending coins to margin traders who will later return you the loan with a percentage.
Honestly saying, it’s quite a difficult one in terms of setting the parameters manually every time a margin trader returns your money, and you need to set up a new loan.
That’s where coin lending bots can massively help you automate the whole process, save your time looking for the best interest rate, and take advantage of possible spikes when lending.
While setting up such a bot, you can configure your strategy, withhold lending until the current interest rate reaches a certain threshold, choose a currency and a date you want your coins back.
Some of those coin lending bots are free; some of them you can even find right on top of the exchanges that do margin funding.
Market maker bots
Once the asset is traded actively, if it spreads widely, more profits market maker bots might return. The main principle here is to sell to investors at a higher value than a selling price and do it as often as possible.
The market maker bot places an order with a price different from the market price and, thus, making a market, earns money for the software owner.
The bot scans markets with a wider spread 24/7, which gives a trader an advantage of time, volume, and price.
How does the technology work?
Automated crypto trading bots ask for access to the wallet and exchange you want to trade on. So you are supposed to link the bot to the platform you’ve chosen with its API key.
Crypto trading bots analyze market performance and the potential risk of a trade and only then decide. It will perform on low-risk trading and avoid high-risk deals unless you think differently.
Investors can try free bot programs to enhance their crypto trading. But in most cases, many bots have user fees, some of which are pretty high. Each bot includes particular software and hardware requirements.
Bots can be super handy, although some doubt whether they should be allowed in cryptocurrency trading. To maximize the benefit of a bot, an investor must know how to best use this tool. For example, they must have the proper accounts set up across cryptocurrency exchanges. They must supply the accounts with cryptocurrency assets. Anyway, it’s impossible to be a serious investor without making your own investment decisions, such as when to buy or sell your crypto. A crypto bot is not a solution for an investor who doesn’t want to put in the time and effort essential for success.
Tips on how to pick the best crypto bot
- That’s important to try before buying anything, especially when you’re not sure about the product. A high-quality project isn’t scared to give you a try. The free period can massively simplify you an answer Crypto trading bot yourself before purchasing it.
- Once you are unsure about your trading talents and are still doubting, there is a solution. A good trading tool has a strategies marketplace that can simplify you to choose from different options and should be cost-efficient and easy to get profit.
- Check whether a crypto bot has backtesting features or not. It helps you test trading strategies against historical data to see how your strategy acts under market conditions.
- Trading bots usually provide portfolio crypto automation, and it is crucial to check how they have created their indices. A proper tool has information on which coins are sampled and how the market cap is weighted in the index.
- Trading communities is a vital part of any trading and investing story. You have to compare how active and involved the trading communities are on Discord, Telegram, Reddit, and Twitter.
- It’s a usual story that crypto traders share their training modules, guides, tutorials, blogs on Medium, YouTube, and other platforms to educate their users and followers.
In case you are a newbie in trading, you can find the most interesting and useful content, go through it and get a better idea of the tool you need to trade effectively. This strategy saves your time and, thus, money.
Top 10 crypto bots in 2022
As crypto trading bots are in the trends now and traders are searching for the best one, we must try to rank the most exciting and helpful opportunities for the sake of your future success.
Description: Pionex is one of the biggest and most popular crypto trading bot providers with over 18 free trading bots for their investors. These bots aggregate liquidity from Binance and Huobi Global and support the Pionex, Huobi, and CoinbasePro exchanges. The bot is free and available on both Android and iOS.
It is approved by FinCEN’s Money Services Business, which is suitable for those seeking some validation of its authenticity. Pionex is a good choice for those wanting a comprehensive bot service with the range of bots offered.
- comparatively low trading fees at 0.05% for makers and takers
- the bots have Grid Trading Bots that lets users buy and sell at specific price ranges:
- a leveraged Grid Bot with up to 5x leverage
- a Spot-Futures Arbitrage Bot helps facilitate earning passive income. You can buy at low risks.
- a martingale bot for dollar-cost averaging to catch fluctuation profit
- a rebalancing bot for long-term safety that helps you to hold the coins.
- KYC is optional and doesn’t influence the services the users can use, only on withdrawal limits.
- There’s an app Pionex Lite that was launched that supports buying Bitcoin and Ethereum using the U.S. dollar.
- A limit of 30 bots per pair is possible.
Price: 0.05% of your total trade value
Description: TradeSanta is a crypto trading bots platform launched in 2018. They have more than 27,000 registered users and over 4 million accomplished deals.
Thanks to its UI design and its customer support that is 24/7 available. You can watch their video tutorials for a better understanding of automated trading.
If you’re an advanced trader, you can enjoy a great variety of features that can be used for setting a trading bot such as flexibility to set the bot as you need, trade spot and futures market, connect any TradingView signal that you set yourself, and a lot more.
There is a mobile app for iOS and Android. The mobile app has all of the same features as the full-fledged version.
- Risk management tools such as stop-loss, trailing stop loss, and trailing take profit.
- Broad choice of signals to enter and stop the deal at the best time.
- Spot trading is available.
- Grid and DCA strategies, long and short strategies you can run simultaneously.
- The trading terminal you can use to place orders on different exchanges.
- Demo trading option to test the strategy before investing real funds.
- Accurate time tracking and telegram notifications to be constantly updated.
- TradeSanta has an unusual and creative UI.
- It connects to exchanges via APIs, so it doesn’t have access to your funds.
- It also has Technical Indicators that can be set up from Volume filter, Daily filter, and Bollinger signal or use these three filters simultaneously.
Price: Basic $15 per month, Advance $27 per month, and Maximum $35 per month subscription plans are available. + you’ll get 20% of each plan purchase made by the person you’ve invited to join the trading bot.
Description: CryptoHero is a cloud-based crypto trading bot that places trades 24/7 on crypto exchanges. CryptoHero trades off your crypto exchange account using API. It is an app platform that does not require users to deposit crypto. CryptoHero is available on the web and as a mobile app for Android and iOS. It accepts cards for the web platform, Apple Pay and USDT.
- Users can connect to multiple exchanges.
- Automation Strategies: Trade Parameters: Set parameters to perform trade 24/7. Long Strategy; AI Optimized Bots: Run bot simulations and copy the best bots created. Short Strategy, Entry and Exit Conditions: Set rules to enter/exit positions.
- It has a visual interface; no coding is required.
- A backtesting option.
- 24/7 technical support.
- Risk-free Paper Trade.
Price: Basic plan for free, Premium for $11, 66 per month, and Professional for $24, 99 per month once you're going to pay annually. It would be a bit more expensive if you pay monthly.
The bot utilizes cloud storage. The Cryptohopper bot is always connected to the Internet and analyzing the market, even when you’re not online.
Newbies can follow public trade signals. Those who are more into trading can program their own signals and cryptocurrency strategy for the bot to follow.
- Cryptohopper has an Arbitrage tool that works without having users transfer funds between exchanges.
- Market-Making bot for market makers who use the spread to manage illiquidity.
- Mirror trading as a service gives a mirroring strategy from advanced users by letting you purchase templates, strategies, or signals.
- Algorithm Intelligence (A.I.) provides the best fit options for your strategies according to ongoing market trends. It is an AI bot for your strategy, which means you can add trends, signal strategies to this algorithm.
Price: There is a free trial period and different plans are possible – $19, $49, and $99 per month.
Description: It was founded in 2017 by the U.K team. It can be linked with different cryptocurrency exchanges, including such celebrities as Binance, Huobi, Bitfinex, OKEx, and HitBTC. You can create various trading rules-based, that empower you to take advantage of over 7,000 strategies. It does not have Technical Analysis (TA) but allows traders to use a nice feature called TradingView to share trading tips and strategies. You can trade different cryptocurrencies, as well. The team also has a YouTube channel where you’ll find interesting content.
- MACD, Bollinger Bands, RSI (Relative Strength Index), and other indicators.
- Emails, live telegram chats, webinars support.
- The Pro version has trading templates.
- Available on the web and as a mobile app for Android and iOS.
Price: Starter plan for free, Hobbyist for $29.99 per month, Trader for $59.99 per month, Pro for $449.99 per month.
Description: 3Commas empowers users to build automated trading bots while trading with them on 22 crypto exchanges. You can do dollar-cost averaging strategies and also integrate TradingView to get signals from third parties.
There is an opportunity to do portfolio analysis and copy trading, the last being recommended for newbies and experienced traders. The bot has about 3,000 users, and it transacts more than $10 million in trading volume every day. You can pay with Credit cards, PayPal, and bitcoin.
- Smart Trade trading panels help users buy or sell many pairs of digital currencies using risk management tools.
- The bot supports setting different order types, including limit, trailing, market, take profit, stop loss, and other orders.
- Mobile app for iOS and Android.
- It has 2FA for security and does not hold your funds on its platform.
- There is a dynamic trading terminal, an interface that allows the management of multiple exchanges.
Price: Starter plan $14.50 with no trading bot option, Advanced plan $49.50, and Pro plan for $24.50. For trial purposes, it provides a 3-day full access trial period.
Description: With this bot, you can connect to over 25 crypto exchanges to trade automatically. There is a 14-day free trial, and you can sign up or log in via Google or Facebook accounts. There is a possibility to try out the features through a demo exchange and then buy a more advanced plan.
You can sample arbitrage across exchanges, and by getting the right market signals in time, you can make the right trading decisions. There are portfolio tracking features, as well. You can pay for the service via Card, Paypal, Bitcoin (BTC), Litecoin(LTC), Ethereum(ETH), and altcoins.
- The backtesting option is available.
- Arbitrage trading option across various exchanges.
- Portfolio management and tracking.
- No iOS or Android devices, only a web-based version.
- It supports 10,000+ trading pairs.
- The platform has RSA 2014-bit encryption. It does not have access to your funds. The funds remain with the exchanges you use.
Price: Basic plan is $19 per month, advanced $44 per month, and pro plan $110 per month.
Description: With Botsfolio you don’t need special knowledge of how to start, it’s automatically deployed with professional investment strategies. You can withdraw all your assets as it's in your Binance account whenever you want. Botsfolio has risk management intelligence incorporated in its bots. There is an option to diversify your digital investment into a blend of long-term and short-term strategies based on your financial goals and the risks you want to take.
- It accepts ETH, BTC, BCH, LTC as payment.
- The platform doesn’t have access to the user’s funds.
- Botsfolio Strategies used by the platform: Value Investment Strategy, Hedged Trading Strategy, Futures Trading Strategy, Fixed Income Savings Account.
- All popular tokens are supported for trading.
Price: The pricing depends on your portfolio value, and varies from $ 5 to $15 per month.
Description: Trality gives you really nice tools for crafting a bot that you can deploy for trading on exchanges via APIs. You can also build trading strategies for selling or using bots to trade crypto in various markets. The Rule Builder empowers you to build a trading algorithm without serious coding skills. Trality accepts ETH, BTC, BCH, LTC as payment.
You can try backtesting to test how efficient the Trality bot is.
- The platform is super secure, so it doesn’t have access to users’ funds. All trading strategies are fully encrypted.
- Paper trading via virtual accounts.
- Ways to create a Trality trading bot :
The Code Editor: Users who are good at Python, can create their strategies with already existing python libraries.
The Rule Builder: Users can build their bots by using prearranged strategies
Price: Different funny named options are available — Free Knight for €9.99/month, Rook for €39.99/month, and Queen for €59.99/month. Plus, 20% discount for yearly subscriptions.
Description: NapBots is a trading bot platform that designs profitable trading strategies and makes them available in a unique marketplace. It also provides automated execution for users on major crypto platforms such as Binance Future, BitMEX, Bitfinex, Kraken, Bitstamp, OKEx, or Bitpanda Pro through API connection. Alongside NapBots, Napoleon Crypto fully owns and operates, Napoleon AM, one of the first regulated asset managers in France that are dedicated to crypto solutions. Napoleon Crypto was launched by experienced quant traders who formerly managed several billion worths of assets under management at their one financial group.
- It connects to exchanges via APIs and doesn’t have access to users’ funds.
- It accepts cards and some crypto as payment.
- Its intuitive design is perfect for beginners.
- Platform’s indicators follow two main strategies:
- Users can use various strategies within a single platform.
- The platform offers long-only and long-short strategies.
Price: Silver for € 19 per month, Gold for € 49 per month, and Platinum for € 99 per month.
Crypto Bots Pros
Maybe you’re a kind of an emotional trader who’s often driven by impulse and impatience, so a crypto trading bot might be incredibly helpful for you to enhance your trades and make them more ordered. These are the main advantages that come with using a crypto trading bot:
- Investing is automated: From FUD and FOMO to a bad day, there are many reasons why a person might choose to make a trade that causes them to lose their crypto. When you have an automated investing bot, these factors are hugely eliminated.
- It’s speedy and more efficient: It takes ages to thoroughly scan the whole cryptocurrency market looking for the best opportunities. By the time you find a potential opportunity, the market could ‘run’ in the opposite direction.
Crypto trading bots give you more efficiency, scanning all sections of the cryptocurrency market within a minute. Your crypto bot can also enter and perform orders faster than you can do manually. If you’re not satisfied with the speed and efficiency of your trading, joining a crypto trading bot might be the right move for you.
- 24/7 market presence: The cryptocurrency market operates 24/7. It’s just impossible for investors to spend 24 hours trading. Crypto trading bots give you additional hours of exposure without asking you to actively monitor, your positions.
Crypto Bots Cons
Cryptocurrency trading bots can’t cure all diseases. Let’s uncover some of the disadvantages that you can meet using a trading tool:
- knowledge: Though many cryptocurrency trading bots come with predefined settings and templates, you’ll need to know how to set these templates and when each template will be executed. If this is your first time trading cryptocurrencies, changing the settings on your trading bot can result in fast losses.
- Monitoring is a must: Trading bots aren’t a “set-it-and-forget-it” solution to cryptocurrency trading. The cryptocurrency market is volatile, and trading bots can result in losses during periods of high volatility. If you don’t have the skills or knowledge to monitor the market, a trading bot may not be the best choice for you.
Trading bots are becoming more popular thanks to their usefulness. It’s a great tool once you have some tasks you want to delegate, which will save you time. For better or worse, the one who wants to try a bot must be armed with a profound knowledge of the cryptocurrency markets and a good investment plan.
That doesn’t seem to be a brilliant idea to get a trading bot just in the hope of getting rich right away without having any idea of how the crypto world works. Automated bots are usually used to make small profits. The profit varies based on the bot and how you program it.
Don’t blame a bot if something goes wrong while using it, but reconsider your investment strategies and find the gaps in your understanding of crypto if there are some.