The world of modern crypto trading is quite unpredictable, so wise traders should take care they choose a reliable strategy for their activity that will help them not to lose money and increase their funds. Trading takes place absolutely always, without stopping, and humans due to their nature are physically unable to precisely track all the market fluctuations and develop unique trading strategies aimed to avoid potential risks. This is exactly what distinguishes crypto trading from the ordinary stock market, where everything is quite simpler.
However, do never despair and perk yourself up! Fortunately, there are many excellent cryptocurrency trading bots that can be of assistance to you and help you overcome this problem.
Basic Overview
Today, most of the existent traffic on the web is generated perpetually by automated programs, bots, and not real human beings. It is a program that can efficiently and quickly perform many repetitive tasks and makes life much easier for many people who earn money online. The tasks performed by bots include scanning content, interacting with web pages of Internet users, etc. A reliable and solid cryptocurrency bot can simply conduct various functions for you: data collection, portfolio features management, rebalancing process, and so on.
Nurtured crypto traders use the help of the best trading bots for organizing trading processes and making bots complete repetitive tasks on their behalf. In other words, a bot is software that can trade crypto as people do, but with better efficiency and performance levels. Buy, sell, and hold user assets 24/7 under any circumstances without being seated at the computer.
Major Bot Types
There are four major categories of the software in question:
1. The bot that trades trends
The function of trend-trading bots is straightforward: to analyze the particular asset’s momentum of an in a particular direction track and capture any possible gains off the bat. Nurtured traders know that these useful, automatically functioning programs can significantly help them gain profits or prevent considerable losses as the trader-bots can implement provisions to magnify wins and minimize losses.
2. Lend coins with a bot
Should you want to lend some crypto—and at favorable interest rates, too— and at the same time, not expose your assets to the huge risk concerns, use the so-called coin-lending bots. They genuinely automate and simplify the trading procedure by reducing the renowned interest rates of high volatility and loan repayments paid by borrowers. Risk less, win more crypto.
3. Arbitrage-centered bot
You can find out the difference in prices of cryptocurrencies, as well as discover inefficient trends by letting an arbitrage bot analyze the market with utmost precision and help to gain beneficial deals.
4. Market-making crypto bot
You can significantly reduce the difficulty of trading and increase your profits gained from the so-called spread— a distinction between the selling price tag and the price set for buyers. (The ask and the bid, frankly speaking)
Guide to Work With an Automated Trading Bot
Crypto trading bots are able to communicate with cryptocurrencies exchanging platforms without the trader’s help and execute trades based on your pre-set conditions. To use such cryptocurrency automated trading platform options, you need to give your crypto bot access to your account via API keys (Application Program Interface). This access is not actually a permanent one, and you can afterward restrict it whenever you wish to.
There are three major stages one should pass during a crypto bot operation:
1. Generate and transmute signals
In fact, at this stage, a smart cryptocurrency trading bot completes the biggest piece of the job. Such bots determine prospective crypto trades and make accurate predictions. The signal generator performs its work on the basis of detailed technical analysis of the current crypto market, with its ups and downs taken into consideration automatically.
2. Locate and minimize risks
The next step forward is of utmost importance, for a failure can significantly decrease your precious assets and the wish to continue trading. Risks should be taken care of. To cause e a reliable bot foresee and process the trading risks, the trader-person must set all the parameters and rules according to which the bot will allocate them. The preset usually includes information about the capital’s distribution.
3. Execution stage
At the stage of execution, the crypto is actually traded: sold or bought. The signals are converted into API key requests, and the exchange platform you choose can immediately distinguish the keys and get to processing them.
What makes Crypto Trading Bots Beneficial?
Did you ever happen to learn that the vastest majority of Wall Street trading professionals use algorithmic trading bots? Perhaps that is the exact answer to the question of why so many private crypto traders are so much afraid to use the bots in question. Perhaps, they consider that if totally automated modern trading bots are used by the famous WS guys and top stock exchanges, they simply ought to feature unbelievable complexity and cost an arm and a leg.
However, you don’t necessarily need to be some financial genius or a born-trader to set a crypto reading bot so that it does the most boring and complicated parts of the work for you. It is all different! Professional traders of the modern world strongly advise both newbies and tough trading guys to use crypto trading bots in order to easily gain an advantage in market analysis, cryptocurrency trading, and long-term profitable trading strategy development, too.
So, here is the list of the best features of the crypto bots:
All emotion-driven faults are eliminated
Most retail traders are exposed to various factors and lose money because of this. So, the psychological aspect is by no means an exception – people are subject to emotions and because of this can act irrationally. Trading does not tolerate such rash emotional decisions.
To avoid unnecessary risks, be among the fifth of advanced traders who delegate the trading process to bots and exclude the possibility of the influence of an emotional factor.
Simulate profitable strategies
To succeed, you have to practice and learn hard, and this rule applies to any activity of a trading bot. Thus, automated trading bots allow simulating certain trading strategies based on historically-truthful data and social trading using the so-called backtesting and paper trading we mentioned in the article. This will allow you to predict how well a particular trading strategy will perform. Learning different trading strategies will help you become an experienced and confident trader with good trading skills, even if you are a beginner.
Risk diversification option
You can use multiple automated crypto trading bots to create a smart trading strategy and diversify your risks. This step will help you balance your crypto trading risks and gains to reduce exposure to any single asset.
Fast and profitable crypto trading process
Speed and efficiency are the main positive qualities of crypto bots, which are why they are so useful in crypto-bot trading. Any automated trading bot is able to make hundreds of transactions and crypto trades in a matter of minutes, and it is many times more efficient than even the most professional trader. That is why the main stock exchange in the world prefers algorithm-based trading.
It is all about discipline
Discipline is important in any business because without it, and you can not become a master. Automated trading allows crypto bots to effectively optimize long-term performance and eliminate short-term costs caused by human intervention.
How To Use Bot Creating Platforms
Today, there is a variety of the best platforms for those who want to create and develop trading bots. They can help you to try to create a free trading bot, test it, and trade even without thinking about your experience in the field. Later in this article, you will find a comprehensive step-by-step guide on how to create your own crypto trading bot without any problems. In addition, if you do not have any coding skills, it is suggested that you use convenient rule builders some platforms offer. They do not require any coding when creating the best crypto trading bots for your successful and beneficial trade.
Such bot-creating platforms allow you to easily construct and set your trading bot’s logic by simply selecting between the desired strategies or configuring them by yourself. If you want to learn more about such programs and how to develop bots with their help, you can read the related documentation on their official sites, where they usually described everything in a simple and accessible language for everyone.
While some of the basic programs are suitable even for beginner traders, those ones such as Python Bot Code Editor are specifically designed for more advanced and nurtured traders. This superb program includes many additional perks and features, such as access to financial data and a range of technical indicators that significantly increase the chance of successful trading. A bot can recognize most of the technical indicators to ensure successful trade.
When you are finally satisfied with the results of testing your crypto trading bots, you can opt for using your most beneficial trading bot in live trading or paper trading on the best crypto trading exchanges, such as Binance, Coinbase Pro, Bitpanda, and others.
If you are worried about the safety of your precious crypto assets, we hasten to assure you that platform-made trading bots don’t do anything except sending trading signals to the chosen exchange platform without actually contacting your crypto investments directly. Most of the programs in question are cloud-based. Such a trading bot program that is stored in encrypted form is beneficial, as all the bots created in it do not require additional installations.
Below you will find the step to step guide for creating a trading bot and learn how to use it for paper or live trading.
Bot Creating Guideline
1. Most of the bot-making platforms require Free registration
2. Start the creation of a bot.
Below is the most common way a bot is crafted with the help of a special bot-creating platform:
- Name your future crypto trading bot. Choose the title carefully with security in mind.
- Pick the type of bot. Use instruments in the program to identify the type. You will be enabled to start creating trading strategies, backtest them on historical data and social trading and develop each bot strategy to make it profitable.
- The cryptocurrency exchange platform you are planning to work with. The list of exchanges that support platform-made bots is constantly expanding, but it already includes the world’s leading exchanges such as Binance, Kraken, and others. If you have not yet started a crypto exchange account, I recommend reading our guide on choosing a suitable exchange platform.
- The quoted asset or, in other words, a currency against which all trades will be performed. In this example, I will use Bitcoin as the quoted asset, and so this will be a Bitcoin trading bot.
- Choose the colors of your best crypto trading bots. It is convenient if you create many crypto trading bots, so you can mark them with different colors to distinguish them from one other.
3. Choose the assets
You need to determine which cryptocurrency, in particular, you want your super bot to trade with. Go to the “Assets” tab, and you will see a list of the assets available on the particular exchange. For example, I will choose Ethereum, and my bot will trade ETH/BTC.
4. Adjust with Settings
Go to the program settings and specify how the bot can manage your funds, specify the features of portfolio management. Besides, here you can adjust other valuable details, such as an appropriate trading price, the duration of the time the order is considered open, and so on.
5. Select trading strategies
All the best crypto trading bots are based on the right and effective strategies, so this step is essential in creating a bot process.
You need to determine the type of strategy that you need to “buy” or “sell,” depending on your goals. In order to adapt the strategy parameters as much as possible, you should click on the ‘Expert’ switch. Without this feature, the strategy parameters will be set by default.
Note that strategies vary in their complexity, and they are not all as simple as the Relative Strength Index, for example. That is why you should choose strategies for a trading bot based on the features of your goals and carefully study all the options before making a choice.
6. Mind Backtesting time
This is an important step in checking the effectiveness of the bot before launching it into real trading. I suggest you run your bot against the past six months or a year in order to rely on the test results to determine how well the bot is doing its job. If you find problems during the test, you can adjust the already prepared strategy by changing trading algorithms or completely replace the strategy with another one.
7. Bot launching procedure
Finally, you can start your bot and use it to trade crypto on one or multiple exchanges. All you need to do is to click on the cloud button and then act according to the given instructions.
That’s it! Now you have the cryptocurrency bot that you created on your own.
FAQs
How much does it cost to create cryptocurrency trading bots?
You can choose one of the following packages depending on monthly trading volume, tick interval, bot number, and log retention:
- An average free trading bot plan that includes the creation of two free crypto trading bots: a live bot and a virtual bot. Also, there can be a monthly treading volume restriction.
- The better crypto trading bot plan can include an expanded trading volume of some thousand dollars, several live bots, and a few virtual ones.
- A still better plan is for those of you who plan to run a bigger number of bots. The volume available for trades is expanded, and that will perfectly suit active crypto users.
- The best of plans are usually suitable for extremely active advanced traders. The monthly trading volume can be unlimited.
Can I have a discount from platforms creating trading bots?
If you purchase any plan for a whole year, it is usually subject to a significant discount. For more information, visit the official web pages of the platforms you want to use to create your profitable trading bot. Become one of the experienced traders and choose the way of profitable trades with a leveraged grid bot or a cloud-based trading bot. To spot futures, arbitrage bot options are of much assistance.
Can I create a trading bot without buying a plan?
If you are not going to purchase any of these plans, I recommend you check the materials provided on the official site of the platform you want to use. With their help, you will be able to create your own free crypto trading bot and ensure that it is an easy, interesting and useful process. Create and use your best crypto trading bot to get more profit.
