Cryptocurrencies are gaining popularity in the financial market, and many institutional and retail investors are focusing their attention on the crypto market. As crypto trading is open 24/7, investors are keen to invest their funds in the crypto trading bots. Though it is a volatile market, there is great potential for high returns if invested correctly and on time on cryptocurrency trading.
There are many trading bots/robots available to help investors execute trading strategies and earn profits automatically in the cryptocurrency market. Many financial institutions are now focusing on developing cryptocurrency trading bots in order to enter the cryptocurrency market.
Crypto trading bots help traders to save time and execute trading more efficiently. However, traders must have a fundamental understanding of cryptocurrency trading.
What is a cryptocurrency trading Bot?
Cryptocurrency trading bots are automated trading software that streamlines users to execute trading strategies as per predefined algorithms with the help of Artificial Intelligence and Machine learning.
Cryptocurrency trading bot is suitable for beginners and experienced investors equally. Bots come in handy for repetitive tasks, time-based trading, and implementing trading strategies. The bot analyzes the risk based on pre-existing market data to make strategies, portfolios and execute trading.
Even though the bot can take care of your portfolio diversification and other trading activities, you should be cautious and keep an eye on your trading and do your due diligence.
How to choose the best crypto trading bot
- First, you should know the company’s reputation, its team, and its experience in the crypto space.
- How does their bot select a token/coin, on what basis it decides, and its process of executing the trading?
- Its proven track record of successful trading.
- Based on experienced users’ reviews and their feedback.
- Every bot has its own features and drawbacks, so select the one based on your requirements.
- Select a paid or free bot as per your budget.
- What crypto exchanges the bot supports, and on what platforms you can trade?
- Payment methods they offer.
- Does it provide Technical support?
- Does it allow paper trade?
- Does it support both Android and IOS?
- Does it provide a detailed trading chart?
- Is it an easy-to-use interface?
types of Crypto Trading Bots
Investors can select their trading algorithm based on their short-term or long-term objectives.
- Arbitrage bots: It is one of the most popular cryptocurrency trading bot types. By using Arbitrage bots, you can buy from one platform and sell on another platform to gain profit under pricing discrepancies.
You need to monitor and compare the prices of other exchanges to make a profit.Types of arbitrage bots include triangular, latency, and spatial arbitrage.
- Margin Trading: You can borrow funds from an exchange to execute trades larger than the equity of your account and gain profits.
- Coin Lending Bots: You can lend your bitcoin to margin traders and earn interest on it. Margin loans are a low-risk return on investment (ROI). The traders cannot transfer the funds to any other wallet, making it a safe investment for lenders.
- Market-Making Bots: The bot executes buying and selling based on the difference between the bid and asks prices (spread) which enhances liquidity.
- Technical Trading Bots: One of the widely used bots, predicts future price movements using signals and indicators.
And there are other bots that also help in trading and implementing strategies.
Some of the best trading bot strategies for crypto include:
- Mean Reversion
- Momentum trading
- Natural Language Processing
- Naive Bayes
5 Best Crypto Trading Bots: (Includes both free and paid bots)
PIONEX: Pionex is the pioneer in trading exchange. Users can trade using their 16 free built-in bots including DCA bots (can trade multiple coins at the same time which helps in diversifying the portfolio and reducing risk), Rebalancing bots (buys coins in real-time prices on a 1:1 ratio and monitors every 5 minutes and adjusts according to the exchange rate fluctuations).
The total coins/tokens available for trading are 379 including Bitcoin, Ethereum, XRP, USDC, and ATOM with a trading fee of 0.05%. The daily trade on Pionex is 100 million+. Pionex partners include exchanges like Circle, Binance, Sumsub, Simplex, CoinLegder, and Alchemy Pay.
CRYPTOHOPPER: Cryptohopper, an AI-powered platform, enables users to trade automatically and with ease. It provides a wide range of features, whereas most of the advanced features are available for paid users. Users can work on high-level analytical tools and high-security features with their mobile app.
Users can have access to copy trading and social trading. Cryptohopper supports 100+ cryptocurrencies to trade. Cryptohopper has features like bot backtesting and customized indicators.
3COMMAS: 3Commas is good at reducing average acquisition costs and achieving profits. Users can try DCA short bots for the Bear market, DCA Long bots for Bull markets, and Grid bots for the sideways market.
Smart trading terminals help users to set triggers and relax. By using integrated signals, you can copy the trades of professional traders. 3Commas also supports paper trading.
The bot supports 16 major trading exchanges, including Binance, Coinbase, Bitfinex, Bitstamp, Gate.io, Kucoin, Gemini, and more.
GUNBOTSHOP: Gun bot shop automates your trading and helps you to receive a passive income. It is traded on over 100 crypto exchanges, including Binance, Coinbase pro, Kukoin, and many more.
Gun bot shop supports Windows, Mac, and Linux. It provides a onetime payment option and you will receive updates, new versions, and licenses for free. You can have access to their telegram group for support.
Quadency: Quadency, a free platform, provides a wide range of pro trading tools for all levels of traders, which enables you to track your portfolio, trade technical indicators, and price actions. You can use Cody AI for future trading. It uses multiple liquidity sources to get the best prices with smart order routing.
Quadency provides world-class security and asset protection with responsive team support. You can earn rewards by taking part in community activities.
The free versions have limited access, whereas a paid version includes additional features and tools that enhance your trading experience. Choose one based on your needs and specifications.
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