- The Best Cryptocurrency Trading Bots
- Welcome to
- Risks of Using Cryptocurrency Trading Bots for Trading
- TOP 5 Cryptocurrency Trading Bots - Crypto Trading Bot Review
- Faulty Software
- The minimum KNOWLEDGE for using C.A.T.
- Flash Crashes
- Trading Bots are Trading Tools and Not Generators of Passive Income
- A automated crypto trading bot
Trading bots are software programs that recognize trends using various indicators and execute trades automatically.
Hedge funds have been using algorithmic trading software in the currency, commodity, and equity markets, but trading bots for private investors made their first appearance in the foreign exchange trading space and quickly made their way into the cryptocurrency market.
The Best Cryptocurrency Trading Bots
There are a good number of cryptocurrency trading bots currently available on the market.
The bots range from free programs that can be used by anybody to expensive subscription-based bots used by professional cryptocurrency day traders.
However, cryptocurrency trading bots, no matter how popular, will vary in usability, quality, as well as profitability.
The 4 most prolific trading bots are Haasbot, CryptoTrader, Zenbot, and Gekko.
It is a free and open-source bitcoin trading bot that’s available on GitHub. Users can use the bot for executing basic cryptocurrency trading strategies. It aggregates live price data, executes live orders, calculates indicators, and is capable of simulating live markets using historical price data if you want to backtest your trading strategies.
Gekko’s functionalities might be somewhat limited compared to its peers, but it is a good trading bot for people new to cryptocurrency trading and would like to try out various automated trading strategies.
It is yet another open-source cryptocurrency trading bot that’s available on GitHub.
You can download it for free, and if you feel that it deserves an upgrade, you can easily modify it. ZenBot supports several digital assets and executes trading strategies using a technical analysis-focused approach.
It even allows for extensive backtesting, high-frequency trade execution, and paper trading functionality for testing strategies in real-time.
It is worth noting that on ZenBot’s GitHub page, the developer warns against using it with massive amounts of trading capital because some users have reported losses during live trading even when the paper trades showed profits.
Users of CryptoTrader, which is cloud-based platform can develop personal cryptocurrency trading bots that are hosted on the platform.
It supports numerous exchanges and currencies and allows users to backtest their trading strategies thoroughly. CryptoTrader also offers a marketplace for users to sell trading strategies they have personally develop or even buy strategies developed by other users.
The subscription prices for CryptoTrader range between 0.0013 BTC to 0.016 BTC per month and can be paid in both Litecoin and Bitcoin.
This is probably the most popular cryptocurrency trading bot that’s available on the market.
It has candlestick chart pattern recognition capabilities.
Users can combine those capabilities with various other trading signals to come up with more advanced strategies for cryptocurrency trading. The bot is supported by most major bitcoin exchanges and is completely customizable with regards to when trades should be executed.
Haasbot users can engage in arbitrage across exchanges and even protect their investments using tools such as stop-losses among other value-adding functionalities. The bot is priced between 0.035 BTC and 0.084 BTC for a 3-month license, which is at the higher price end and is therefore recommended for advanced traders.
Risks of Using Cryptocurrency Trading Bots for Trading
Giving your money to a third party, whether a trading software or a fund manager, to manage your funds, you are taking a risk.
TOP 5 Cryptocurrency Trading Bots - Crypto Trading Bot Review
When it comes to trading bots that are just several years old and being used in an illiquid and immature market, the risks are significantly higher. In addition, there is the added risk of heavy losses because of flash crashes, potentially faulty software, and falling victim to scams.
Trading bots are not all created equal.
The minimum KNOWLEDGE for using C.A.T.
If you choose a trading bot that’s poorly coded that has faulty if not subpar software, you are likely to find yourself losing money if you use the bot. It is thus advisable to only use cryptocurrency trading bots that have the best reputations and which offer the types of trading tools you need.
If a flash crash happens, as was witnessed on GDAX in Ethereum (ETH) back in June 2017, trading bots can lead to massive losses within seconds if users don’t set up stop-losses on the trades.
Flash crashes happen more regularly than you might assume in the relatively illiquid and largely unregulated cryptocurrency world and this poses a risk to the people that allow trading bots to execute trades automatically for them.
It is worth noting that trading bots can turn out to be nothing more than scams.
It has been quite a prevalent problem with forex trading bots, but it is slowly creeping into the world of cryptocurrency trading.
For instance, several community members have issued warnings about a bitcoin trading bot known as Hexabot.
According to user reports found on Reddit, Hexabot started with the halting of withdrawals from the platform and subsequently shut down its website in what seems to be an exit scam by owners of the platform.
Trading Bots are Trading Tools and Not Generators of Passive Income
The important thing to note with regards to cryptocurrency trading bots is that they are not a one-stop passive income solution guaranteed to make you money while you sleep.
If a bot promises you that, it will almost always turn out to be a scam and you will probably end up losing money.
Cryptocurrency trading bots that are more advanced allow you to set specific parameters at which the bots will execute trades for you.
A automated crypto trading bot
The parameters require some backtesting and adjustments as you move along. The cryptocurrency market is continually growing and evolving, so trading strategies will have to be adjusted and updates to function in the new market conditions too.
You can generate a trading income using cryptocurrency trading bots because the programs use historical price data in combination with parameters used to find trading signals on which to execute trades on.
If you implement the proper strategy and adjust your bot’s settings regularly, it can be an excellent tool for helping you with your cryptocurrency trading decisions.
Cryptocurrency trading bots are however not a set and forget solution to make money trading cryptocurrencies and should only be used with small amounts of capital because the risks can be greater than if you were to take the trades yourself.