5 of The Best Crypto Trading Bots | What are Crypto Trading bots?

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5 of The Best Crypto Trading Bots What are Crypto Trading bots

You’ve probably been hearing about Cryptocurrency trading bots for a couple of years now, and they’re even more of a hot topic these days. But what exactly are these Crypto trading bots? And how can you stand to profit? And then, maybe you want to know what are the best crypto trading bots in 2021? Well, after this tutorial on the basics of crypto trading and its automation you’ll be able to answer these questions and perhaps even start on your own trading bots.

How Does Crypto Trading Work?

So, basically, crypto trading involves buying and selling cryptocurrencies like Bitcoin or Ethereum or thousands of other altcoins. Like Forex, the crypto market is decentralized, meaning there is no bank or central authority where all the transactions come together. Everything’s on a network of computers but to trade, one usually goes through what’s known as a crypto exchange. You’ve probably heard of Binance and Coinbase, currently two of the top trading exchanges in the world.

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You can try opening an exchange account using one of these or other crypto exchanges and use the data and stats it gives you and your knowledge of cryptocurrencies to buy or sell one of the numerous crypto coins out there. Getting oriented might be a bit hard at first but you’ll get the hang of it pretty soon.

Crypto trading is very popular with a lot of traders and investors because of its highly volatile market. It offers considerable profit margins with the right trade but just for the same reason, making the right trade can be difficult even if you know your way around. The crypto market changes with blinding speed and it does not sleep.

Being open and active 24 hours a day and 7 days a week can be a huge advantage or a huge drawback depending on where you stand. If you’ve had some experience trading crypto then you know the feeling of waking up in the morning to realize you’ve lost an unbelievable, one-in-a-million trading opportunity while you were sleeping, dreaming of the exact same thing, probably.

Also Read: How to install multiple instances of MT4?

That is one of the reasons why crypto trading bots are so hot right now. With Bitcoin prices fluctuating wildly and new altcoins appearing almost daily, trading bots might be just the right thing to keep those profits coming in. Let’s take a look at what trading bots are and how you can benefit by choosing the right one.

What are Crypto Trading Bots and Why Should You Care?

The Best Crypto Trading Bots

Cryptocurrency trading bots are computer programs that buy and sell coins for you, automatically. Instead of placing an order to buy or sell this or that coin on the crypto exchange manually, you can use a trading bot that automatically decides what transactions are best and places that order almost instantaneously.

When you trade manually, you have to constantly watch the market stats for emerging trends, trading opportunities, or stop-loss conditions. Sure, you can do that, but consider the recent market upheavals: crypto assets are highly volatile and their rates can rocket explosively or drop faster than a cartoon anvil. All that can happen as you sleep, as you take a shower, or just Netflix-and-relax late at night. All of a sudden you’re super-rich or super broke, but more likely the latter if you don’t have some kind of countermeasure set up.

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We’re talking about trading bots, of course. Crypto trading bots are usually very simple and straightforward: you tell them to buy or sell a specific coin when its price goes above or below a certain threshold. That takes care of having to check every five minutes to see if you can make your move yet. The bot has to access your exchange account and be able to spend your money so you need to give it both your API public key and API private key. Naturally, you can also customize your bot with various trading strategies so it’s more sophisticated than a simple if-clause.

There are many, many different crypto trading bots out there on the world wide web, and picking the right one may prove tricky. Some bots you must pay a monthly fee to use, some bots are free; some are legit and some are scams that have swindled people out of fortunes. How can you tell which one to get, and what strategies you should choose? Well, how about we go over some of the best crypto trading bots of 2021? And let’s discuss some strategies while we’re at it.

5 of the Best Crypto Trading Bots in 2021

Here’s a countdown of our list of the best crypto trading bots. We chose them specifically with beginners in mind so you don’t have to worry about them being too complicated right off the bat.

5. Botsfolio

Bostfolio

Perhaps the best choice is if you don’t have any experience trading or coding. Botsfolio is one of the best trading bots that has become popular for its ease of use and some great strategies. The app starts by making you take a quiz on risk assessment then uses your preferences to recommend a crypto investment strategy that you can automate. For a monthly fee between $1 and $20, Botsfolio offers a range of pre-built, out-of-the-box bots with several strategies chosen based on your risk appetite, investment goal, and financial condition.

There are four different strategies to choose from Value Investing, Hedge Trading, Futures Trading, and Fixed Income. While Value Investing is their most popular strategy, Botsfolio is mostly famous for its Hedge Trading strategy that offers a degree of protection against the insane volatility of the crypto market. Botsfolio is extremely user-friendly: just answer the questionnaire, hook it to your Binance account, choose a strategy, and you’re ready to go.

4. Quadency

quadency

Taking automated trading to the next level for beginners and pros. Quadency is a multi-exchange, multi-strategy, trading, and automation tool that will let you do a lot more with your trading portfolio. Perhaps the best feature of Quadency, and it has many awesome features, is that it allows for backtesting.

Backtesting refers to when you use a trading algorithm not on the live market with real money but on a simulation from past data. Basically, you can see how much money you would’ve made with this or that strategy or config had you used Quadency in the past. That lets you see just what you’re getting before you actually decide to use their bots to invest your money. As for pricing, Quadency offers a free LITE plan, a $49/month PRO plan, and a $99/month UNLIMITED plan.

Quadency has a ton of different bots running on different strategies. It also has quite a few pre-builds for beginners who don’t want to tweak the codes just yet. Another important tool Quadency offers beginners is Smart Suggest, which, as the name suggests, recommends bots and strategies based on your preferences. It can also connect to more than one exchange platform, supporting Binance, Kraken, Liquid, etc.

3. Coinrule

cinrule

Build your own customized bot with a unique strategy with zero coding expertise. Coinrule is one of the big names in the trading bot game and it’s simply great for beginners. A very user-friendly interface lets you build your own strategy in less than a minute. You can make simple if-then rules from scratch or choose from a template library 150+ strong. You can also define conditions for the execution of transaction orders, like specific times or sequences of events. Create your own strategy by mix-and-matching features from stop-loss measures, accumulation, or HODLing.

The platform also includes a constantly updated knowledge base that informs and educates prospective clients and you should make use of that even if you don’t intend to use Coinrule to build your bots. Coinrule offers a free account with 7 strategy templates so you can check out how you like its features and pay only if you’re satisfied.

2. Pionex

pionex

The definite champion of free crypto trading bots. With 9 pre-build, Grid Trader (read on to know what this means) bots provided for free, Pionex might just be the best place for a first-time crypto investor seeking to automate. Pionex has also the lowest trading fees at 0.05% of the transaction. Pionex is not actually a trading bot but a crypto exchange that also features a bot you can run on it.

So, in order to use the bots, you’ll have to place your transaction orders there as well, with no way to access your Binance or other popular exchange platforms. Considering it’s free, however, it’s still a great deal. You may not exactly wish to commit to a month-long plan in advance when it’s your first time with automated trading. If you choose Pionex, you won’t have to, because it’s free. You can explore the world of crypto trading bots at your leisure. You’ll also know you’re safe since Pionex is regulated by agencies in both Singapore and the US.

1. Cryptohopper

 

 

cryptohopper

Cryptohopper bots are perhaps the best crypto bots between cloud-based bots. Being cloud-based, its bots will continue to run 24/7 even if your PC shuts down. That in itself is a brilliant solution: we’ve all faced inconvenient power outages, and much more frequently, broken internet connections. Cloud-based crypto bots like Cryptohopper save you from ruining great trading opportunities for a simple modem problem. The downside is that they cost a little bit extra.

Cryptohopper is famous for its market-maker bots that use the spread to make a profit, which works even in downward markets. You can also use arbitrage strategies to use the price differences across various markets. Cryptohopper is also trying to be at the forefront of social trading by establishing a marketplace for bots and strategies and a “follow” feature where you can follow successful traders and adapt their strategies as your own. That way even a beginner has a real chance at making it big in the crypto market.

Why and When Should You Use Crypto Trading Bots?

Sure, crypto bots are great and they’re all the rage right now, but are they for you? When is it the right call to leave your trading to bots? There is no simple answer here and it really depends on your financial situation, your risk appetite, and how well you know the market. Here, we discuss these questions and more. First up, let’s see what advantages these bots really have.

Also Read: How to set up VPS for Forex Trading?

✅The Advantages of Cryptocurrency Trading Bots

All manner of trading platforms, even Wall Street and Forex trading, are now automated and a really large portion of all trades is run by bots. That’s because bots offer some invaluable advantages to any trader, whether crypto or not. These are some of them:

1. Crypto Trading Bots are Powerful Data Analysis

Markets are constantly evolving and crypto markets are no exception. In fact, they are more volatile than almost all other markets and that means more varied trading signals, more data. The amount of data produced is simply impossible for any human to view. Even if, by some miracle, you had enough time and power to read all the incoming data, it would be impossible to gain any real insight into the market from the heaps of numbers. Algorithms are powerful data analysis tools that can detect and predict patterns in Big Data and trading bots leverage that power to make a profit in crypto markets.

2. Crypto Trading Bots Don’t Have Emotions

Okay, this might seem like a sci-fi thing to say but it’s actually an advantage bots can bring to trading. Traders often buy or sell assets not because of rational analysis but emotions, “gut feelings” that sometimes pay off but often don’t. Emotional trading is extremely risky and inevitable as long as we’re dealing with people. You can take advantage of the famously emotionless nature of bots to make sure your trades are actually based on the information and rational decision-making rather than “hunches”.

3. Crypto Trading Bots Can Run 24/7

We already talked about this but it’s important to emphasize this point as it’s one of the most important selling points of crypto trading bots. You can decide to run things yourself during the day but what about at night? It’s the only night in your part of the world and the crypto trade is going steady no matter the hour or day. If you can’t stand missing out on sweet trading opportunities and can’t keep awake for days on end, then cloud-based crypto bots are the only solution.

4. Crypto Trading Bots are Fast and Efficient

Placing the trading order at the right time, buying and selling almost immediately, constantly rebalancing your portfolio: these are some of the things you can’t really do by yourself. During the time it takes to even point your cursor on the buy/sell button and click, a bot can make hundreds or even thousands of trades and hand you the profit. More than that, algorithmic trading bots can balance and rebalance your portfolio almost constantly, keeping you ahead of market changes. Even if you were to do it just once every hour, you’d soon despair.

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❎The Disadvantages of Cryptocurrency Trading Bots

We talked about the advantages, now it’s only fair to mention the disadvantages:

1. Scammers

While crypto trading bots seem like the perfect solution, they come with their own set of disadvantages. First of all, there is the possibility of a scam: how would you know if a bot you trust with your crypto wallet won’t just transfer the money to another account, defrauding you?

It has happened before and it will happen again, so you need to be on your toes and carefully vet whatever automation platform you plan on using. Platforms and bots with longer track records are probably your best bet right now, as they have passed the test of time.

2. Extreme Volatility

Even if the bots you choose are legit, they might still end up costing you your investments. The crypto market is extremely volatile and AI-powered tools don’t usually fare well in conditions of high volatility. Consider the COVID pandemic and its effects on the market, or the whole Elon Musk crypto-fiasco.

These things are next-to-impossible to predict or to handle by bots. There are, of course, some solutions, like Natural Language Processing bots that try to read and analyze tweets and forum posts on the market and predict how investors will behave and what coins to buy, HODL, or sell. These NLP bots are far from perfect right now and can’t be trusted to look out for your investment

Are Crypto Trading Bots Really Profitable?

Well, that’s a tough one. The answer is both yes and no. It’s really about the bot you choose and how it was actually designed. There are massive investment companies like BlackRock that use proprietary trading bots that make fortunes. These types of bots are, of course, unavailable to the public.

The ones available are not exactly low-quality but you have to find the right one. One way to measure how profitable a bot might be is to look at the company offering it on their platform: do they stand to make money when you do? Is their success aligned with yours? Or do they just take a monthly fee and leave you out to dry?

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For beginners, bots can seem very enticing at first, since it seems they can just leave everything to it and wait for the money to flow. That’s almost never the case. A bot still needs to be checked on regularly, to be configured and tweaked on a timely basis. Even then, choosing the right algorithm is no easy task and if you’re just starting out, you may need to spend some time testing various bots by backtesting on different platforms.

Conclusion

Let’s recap and wrap up what we have said so far. Cryptocurrency trading bots are smart trading tools that can improve your crypto trading by leaps and bounds but only if used correctly. There are many different bots and strategies available, both free and paid, and choosing the right one is crucial to your success.

The extreme volatility of the crypto market can mean a considerable profit but also a huge risk, so a considerable risk appetite might be necessary for starting your trading bots. If you decide to automate your crypto trading, make sure you use cloud-based and the best crypto trading bots to make sure they run 24/7. That way, you can get the most out of your crypto trading bots.

FAQ

What are the best crypto bots?

Genuinely speaking, every crypto bot has its own advantages for different traders with different mindsets and expertise. However, the following bots are known to be more beneficial than the rest and are recognized as the best crypto bots among traders.

  1. Cryptohopper
  2. Pionex
  3. Coinrule
  4. Quadency
  5. Botsfolio

Why should I get an AI trading bot for crypto trading?

Artificial intelligence (AI) cryptocurrency trading bots can be really helpful for traders of cryptocurrencies. The followings are just some of the advantages that exist in almost all of the crypto bots:

  1. Give traders an uninterrupted consideration of the market
  2. Save time for traders
  3. Monitor and notify the cryptocurrencies trends
  4. Lower the barrier to entry

What is an AI cryptocurrency trading bot?

Artificial intelligence (AI) cryptocurrency bots are automated applications that help crypto traders to sell or buy cryptocurrencies at the right time to gain the most profits. The primary goal of these bots is to reduce the chance of losses and increase the earnings for traders.

Are AI cryptocurrency trading bots profitable?

Sure, they can produce numerous benefits if you have enough expertise and experience in crypto trading and its related topics. With a cautious approach, you can manipulate these bots to make a huge profit from the crypto market.

What are the best crypto-bot trading strategies?

As different crypto bots are providing different kinds of services for their user, they are offering different strategies for having profitable trading. However, the below strategies are distinguished as the most beneficial trading bot strategies which are common in almost all of the crypto bots.

  1. Backtesting
  2. Strategy Implementation
  3. Execution
  4. Job scheduler
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Alex is a senior author and content strategist with an interest in all tech things. He has been writing for a few years now, before which he was engaged in academic research on literature and philosophy. He loves writing, logic, and challenging himself.

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