The crypto markets are extremely volatile and unpredictable. They suddenly crash or gain enormous percentages at any given time. This all happens so quickly sometimes that it is difficult to get in or out of the action in time.
The order book is flying off the charts, by the time you get around to making your limit order, the price already left you behind. Conversely, you could be sleeping and while napping the price decides to take off without you and you wake up to a missed opportunity.
In these situations it would be super advantageous to have some automated trade system set up, to take advantage of these volatile spikes and dips in price. Enter, The trading bot, a wonderful piece of software that will conduct trades and execute transactions on your behalf.
Computers excel at certain tasks far better than humans such as performing repetitive tasks, being extremely precise, and accepting multiple sources of information simultaneously.
Trading bots are designed to perform that tasks that we humans are lacking in, maximizing efficiency in the market. Another benefit that computers have over is is the lack of emotions clouding our judgment.
One of the greatest difficulties and hurdles to becoming a competent and profitable trader is overcoming your own emotions. Computers do not need to have an internal struggle to decide whether to buy or sell, it uses raw data and instruction, a far superior method to trading.
What Is A Cryptocurrency Trading Bot?
Trading bots are nothing more than a set of programs designed to execute trades and transactions exactly according to your instructions. It’s like having somebody watching the market 24/7 for you.
Not only that but trading bots can also automate the analysis and interpretation of market statistics. These nifty bots are capable of gathering large amounts of market data, interpreting and calculating potential risk-reward ratios.
Based on the results of the ratios, the bot can be set to buy or sell automatically.
When trading crypto, many experienced traders will recognize patterns in price, such as when a price oscillates within a narrow channel. Or another example would be setting an automated buy or sell order when the prices deviate from the channel by a certain percentage.
Using a trading bot you can automate buying and selling within a certain price channel to generate money while you can sit back and overwatch the action.
I always recommend being nearby just in case, but if you set your bot correctly you can feel comfortable going to bed knowing the bot will execute your specific instructions perfectly
How Do Trading Bots Work?
Typically the trader starts by looking for a trading bot that will most closely fit the requirements for the chosen trading style or strategy.
This code has to be downloaded from a developer which usually comes at a fairly high price. Keep in mind what you are buying here, used correctly it can repay itself 20 times over.
Unfortunately, it’s not as simple as a plug-and-play USB device and the Investor needs to have some knowledge of software and hardware requirements for each specific trading bot the best maximize results.
Investors must make sure to have proper accounts set up across multiple exchanges and must keep those exchanges stocked with enough holdings to make sure the trading bots can run properly. Most cryptocurrency bots have a few key features that dictate their behavior.
Data Analysis
This part of the trading bot collects the raw data from the market and has to interpret it to give a prediction on what will happen next.
Based on these results, the bot will throw a signal to buy or sell or do it automatically based on your preferred settings.
A lot of bots can allow traders to customize what information gets analyzed and further refine particular signals.
Market Risk Analysis
The trading bot decides how much to risk based on the risk of the market, determined by the data analysis conducted earlier. The trader can set various levels of risk and customize the bot, just remember the greater the gain potential, the greater the loss potential as well.
Buying/Selling Feature
For trading bots to perform their job correctly they require access to your trading platform. This is done using APIs to connect multiple platforms together for our trading bot to interpret.
Let’s take a look at some of the most popular Trading Bots and see what each one does best, and what kind of trading they are mostly geared towards.
Coinrule
Coinrule is a great beginner-friendly intro to trading bots. Having a very user-friendly interface that guides the investor through building the trade bot step by step.
Additionally, the bot is further simplified with a lot of “if-then” logic statements that allow anyone to build to bot from the ground up.
Coinrule has well over 150 preset templates to choose from to help beginners run the trading system that suits their needs.
The knowledge base is a great place to further enlighten yourself with the ins and outs of trading bots, which are continuously updated with new ideas and potential.
The platform allows a limitless number of trading strategies and a demo exchange to put your bot to the test without worrying about losing cash.
The rules for your bot, the number of exchanges that you can connect to, trade volume, and the number of available trading templates are limited by the payment plan you choose. 4 plans are available with the most basic plan being free.
| PLANS | FEE | VOLUME | TEMPLATES | EXCHANGE LIMITS | RULES & OTHER FEATURES |
|---|---|---|---|---|---|
| Starter Plan | Free | $5K | 7 | 1 | 2 Rules |
| Hobbyist | $29.99 | $50K | 30 | 1 | 2 Rules, Text Notifications, Advanced Indicators |
| Trader | $59.99 | $500K | Unlimited | 3 | 15 Rules, One-On-On Training |
| Pro | $499.99 | $3M | Unlimited | Unlimited | 50 Rules, One-On-One Training Priority Execution |
With free the free account option the trading bot is certainly worth giving a shot. If it piques your interest then maybe you could consider throwing some money into the tool.
It’s like learning a new skill, only once your are committed and dedicated to it do you spend the extra cash on a better “tool”.
Catering to the more inexperienced trading bot users, Coinrule is a great choice for getting involved and learning how to use trading bots. The more experienced user can certainly find something more stocked with the features they require.
Cryptohopper
Our first trading bot on the list was very beginner-friendly so as it should our second trading bot is slightly more advanced.
Cryptohopper includes a variety of features that help the newer trader get acquainted.
The Hopper Academy is one of those tools which is available to all member and allows access to a video library that explains how Cryptohopper works.
On top of having a great education base, the Cryptohopper forum community is quite active and helpful to newcomers.
This can be incredibly helpful as searching through old help threads and posting for help is a fantastic way to learn from those who came before you.
Supporting over 75 different cryptocurrencies, and nine exchanges, Cryptohopper offers a multitude of features and stands out among trading bot platforms on the market.
| PLANS | FEE | POSITIONS | COINS | TRIGGERS | OTHER FEATURES |
|---|---|---|---|---|---|
| Pioneer Plan | Free (For 7 Days) | 80 Positions | 15 Coins | 2 (Max) | Demo Trading Bot |
| Explorer | $19.99 | 80 Positions | 15 Coins | 2 (Max) | Demo Trading Bot |
| Adventurer | $49.99 | 200 Positions | 50 Coins | 5 (Max) | Demo Trading Bot Arbitrage |
| Hero | $99.99 | 500 Positions | 75 Coins | 10 (Max) | Arbitrage Trading Market Making |
Overall Cryptohopper is well designed and easy enough to use that i can benefit both the novice and experienced trader.
Cryptohopper has developed a great reputation over the last few years and with an active community, it is worth looking into and seeing what information they may have for you.
Shrimpy
Shrimpy is more of a portfolio management bot than anything else.
It allows investors and traders to manage their entire balance across several exchanges all on a single platform.
A great feature within Shrimpy is that the portfolio manager allows you to allocate your overall portfolio using simple percentages.
These percentages can also be very easily changed to suit your needs as you wish. I think one of the coolest features about Shrimpy is that it is a social trading platform.
You can interact with other investors and view the most popular applications of cryptocurrency on the platform.
Investing in this fashion by following other successful crypto investors can be a fairly safe way to approach the market. you can even message some of the investors directly and let them manage part of your crypto assets for you.
If you think you are the one with the brilliant trading strategies and everybody should learn from you then listen up, Shrimpy offers $4 per month per follower on their platform, that means if you have a profitable strategy, and you share that with everyone else, you can generate even more money by generating a follower base.
| PLANS | FEE | PORTFOLIOS | EXCHANGE | OTHER FEATURES |
|---|---|---|---|---|
| Starter | $19.99 | 3 Per Account | 5 Exchanges | Demo Trading Bot |
| Pro | $79.99 | 5 Portfolios | 10 Exchanges | Everything In Starter Tier Free Optimizer |
| Enterprise | $299.99 | 10 Portfolios | 25 Exchanges | Everything In Pro Tier Dedicated Server |
Shrimpy is a really interesting trading platform in that there's a very large social aspect to it. Being able to follow successful crypto Traders can be both inspiring and helpful to your learning process through the markets.
If you are the type of person that is interested in what others are doing and their opinions and this is the platform for you.
Just as well if you think you were a trendsetter and know something that people can learn from once again sign up and start generating a monthly income just from having people following you. If you are a big social media user I highly recommend checking this one out.
HaasOnline
HaasOnline is an automated crypto trading bot company that has been active since 2014. Boasting an impressive user interface and excellent design, they provide functionality with purpose.
You don't need to be an expert in code to be able to implement their crypto trading bot services as they automate much of the process for API integration.
They have an impressive array of pre-built trading bots that help streamline the process for even quicker integration.
HaasOnline’s onboarding process is incredibly simple as all and everything you need to know is featured on their site with some very handy and digestible videos and walkthroughs so even the most novice of crypto traders can get a good start.
The savvy trade server and virtual editor has every single tool that they will need within HaasOnline’s trading platform to build some of the most intricate and powerful trading bots. Something that I don't see all too often are more unique order types such as a trailing stop-loss which is available through HaasOnline.
The Backtesting tool comes standard with HaasOnline which is wonderful. This tool is very essential and is not offered by enough trading bot platforms. Being able to test your theories back on the previous happening of the market can be very telling of future success.
Overall, this is an incredible tool for anybody who is savvy in either the trading world or the coding world. If you are savvy in both then this right here is the ultimate tool for generating profits.
HaasOnline has an enormous offering of features and the more knowledge you have of each field the more you can take advantage of this amazing tool. I’d recommend beginners to stay away from this one for the learning process and stick with a more guided entry into trading bots.
Conclusion
Having gone over some of the best trading bots available on the market it’s safe to say that they offer a lot of unique benefits, so it's hard to say one is better than the other.
However, Coinrule is by far the most beginner and user-friendly option on the list and I highly suggest it for anyone beginning their learning process.
If you have dabbled in the markets before and know your way around, then Crytohopper is also a good choice as it offers a bit more features than Coinrule.
I believe the most feature-rich and useful trading bot belongs to HaasOnline. The integration potential and API functionality, coupled with the pre-built trading bots makes their platform a very well-rounded offering.
Regardless of which bot you choose, it will be a learning process to achieve the best results from it. Take your time learning how to trade with bots as it will be one of the more complex undertakings you will have the pleasure of trying. Good luck and happy trading out there.
