Currently, many teams provide paid and free bot options for trading Bitcoin and other cryptocurrencies. For crypto traders like you and me, choosing between these services is quite a hassle.
What are Best Cryptocurrency Trading Bots 2022? How do they work? Can they make money for you? Find out in our Crypto bots guide
Unlike stock markets, the cryptocurrency market never closes or stops, which can lead to very stressful scenarios for traders and even casual investors in the industry.
Users dealing with cryptocurrencies will also be familiar with that feeling (joyful or painful) when you wake up in the morning and are faced with a pleasant or unpleasant surprise, checking your portfolio and discovering big profits or losses.
Due to market volatility, trading crypto bots are becoming more and more popular among traders, allowing them to constantly monitor their positions, and the bot does not stop working even when the trader goes to bed. In addition, a properly configured crypto bot allows you to make transactions faster and more efficiently than a trader who does everything manually.
The explosion in the popularity of cryptocurrencies has also led to a significant increase in the number of crypto bots available either for free through open-source platforms or licensed to users for a fixed fee.
However, determining which of them work as expected and which are a waste of time is quite difficult. In this post, we will look at what trading bots are in general and whether they are suitable for trading bitcoin (and specifically for you). We will then highlight some of the best cryptocurrency trading bots on the market today.
TYPES OF STRATEGIES FOR TRADING BOTS
Although the cryptocurrency market is much less mature than other financial markets, its digital nature means that, despite significantly less time to integrate algorithmic trading, it has been able to quickly catch up with its competitors in terms of providing services related to trading bots that allow investors to access a wide range of strategies, the most popular of which are described below:
In the early days of cryptocurrency trading, one of the main strategies used by traders to make a profit was arbitrage – that is, buying assets in one market and then selling them in another at a higher price, profiting from the difference. Because cryptocurrency exchanges were decentralized, there were often large price differences across exchanges, meaning that profits could be made using arbitrage.
Although spreads between exchanges are much smaller now, they still appear from time to time, and arbitrage bots help users to make the most of these gaps. In addition, arbitrage can be used by traders who seek to use futures contracts in their trading strategies to profit from the difference that may form between a futures contract and its underlying asset, while considering futures on various exchanges.
Trading bots also allow investors to use a market-making strategy. Market-making strategy involves monitoring the prices of various cryptocurrencies and digital currency derivative contracts to catch the spread between the bid and ask prices ”.
To implement market-making strategies, limit orders are placed both for buying and selling near the current market level. As prices fluctuate, the trading bot will automatically place limited orders to profit from the spread.
While this can be profitable in certain periods, intense competition can cause the strategy to eventually become unprofitable, especially in a low liquidity environment.
WHEN TO USE A CRYPTOCURRENCY TRADING BOT
The list of functions that a well-tuned bot can perform for you includes rebalancing, portfolio management, data collection, smart order routing, etc.
What exactly can be improved with trading bots? Let’s see.
No. 1. Recurring tasks
Repetitive tasks consume a lot of time and effort. A cryptocurrency bot help you to virtually “copy and paste” specific tasks, making transactions much easier and quicker. One of the clearest examples of repetitive cases where bots can help you is periodic rebalancing.
If you choose to rebalance hourly, then you need to, as the name suggests, rebalance your portfolio every hour.
With this, you have two options
- Set an alarm to do it manually every hour and end up going crazy.
- Use a trading bot and program it to rebalance your portfolio hourly until the end of time.
No. 2. Timing of Operations
Timing and achieving a high degree of accuracy in trading are essential to trading success. Every trade you make can have a huge impact on your earning potential. Let’s look at one example.
Let’s say that the price of Bitcoin is going down and you want to close your position when it hits the $19750 support line.
If you do it manually, you will have to patiently and carefully observe the price chart, and even then you may not be able to click the button in time. The bot is quite easy to program to monitor the market and make a trade at the right time.
No 3. Difficult moments can be simplified
Consider an example of intelligent order routing:
The idea is to trade across multiple trading pairs.
Each trading pair is selected as carefully as possible in terms of the time of the transaction, the number of assets, and the price.
The entire process must be completed within a certain period until market conditions change.
Sounds simple enough, right? However, the execution of such a transaction may be practically impossible. This is just one of many examples of complexities to consider when learning to trade. Some strategies are almost impossible to implement.
Robots for trading on the cryptocurrency exchange make it easy to automate the most complex strategies.
DO CRYPTOCURRENCY TRADING BOTS WORK?
Trading robots act in response to the market. They collect the data necessary to complete the transaction, based on the results of the analysis carried out by the trading platform. However, in the case of cryptocurrency, the trading platform is only responsible for part of the story, since many of the ups and downs are provoked by other sources (such as Elon Musk’s Twitter or other popular resources), and these sources cannot be programmed into the bot for analysis.
In addition, as noted above, the spread between exchanges has somewhat leveled off, which means that there are significantly fewer opportunities for inter-exchange arbitrage than in previous years.
Many trading bots use so-called exponential moving averages (EMAs) as a starting point for market analysis. The EMA tracks market prices over some time, and bots are programmed to respond to price action, such as breaking certain thresholds.
By programming the bots, traders can set their thresholds according to their risk tolerance. However, one of the disadvantages of the EMA is that this indicator is based on history, which, as all traders know, is not an indicator of future profits, especially in the cryptocurrency industry where volatility is very high. Therefore, the question of whether trading bots work is extremely difficult, and the answer to it can only be this: they work, but not for everyone.
Trading bots offer a range of benefits, including constant interaction with the market, as well as the removal of emotions from trading – an important intangible factor. On the other hand, if you are using the wrong trading strategy or relying on other people’s strategies, a trading bot can automate a set of completely wrong market trading decisions.
THE BEST CRYPTOCURRENCY TRADING BOTS 2022
In this section, we’ll look at some popular and public bot options that you can use. In most cases, these bots offer more than just trading automation. Some of the platforms provide clients with advanced trading tools as well as access to the best cryptocurrency exchanges.
Cryptohopper is one of the most famous players in the auto trading space, and there are several reasons for that. First, it is cloud-based, so there is no download or installation required, and you can trade around the clock. It also has an intuitive control panel and it takes no more than five minutes of setup to start trading.
In addition, it is the only bot with external signal integration, which allows new traders to receive data from professional analysts from all over the world. Many are using machine learning and intelligent algorithms, as well as hiring teams of mathematicians, to look for rising coins. Signals are sent directly to crypto bots that buy and sell assets when they are received.
The bot allows you to profit from bull markets with trailing stop losses, and also offers a full range of technical analysis features from Stochastic and RSI to Bollinger Bands and MACD.
Cryptohopper has a very nice modern control panel where you can customize and control just about everything. It also includes a setup wizard and ready-made templates for popular exchanges such as Binance, Bittrex, Poloniex, and Kraken.
Traders with more experience can add their favorite technical indicators and triggers, as well as useful tools that are useful in bear markets such as DCA features and short selling.
Unlike many other bots, Cryptohopper does not charge any trading fees and is one of the few bots that offer a free Pioneer trial with the ability to upgrade to Explorer ($16.58/month), Adventurer ($41.58/month) plans. ) and Hero ($83.25 per month).
3Commas is one of the most famous cryptocurrency trading bots. We ranked it second on the list because its user interface is more suitable for professional traders. As their users gain experience, they turn their attention to developing for professionals.
That is, if you are already an expert in using bots, then you should try 3Commas.
The service has three subscription levels – Beginner, Trader, and Pro. The entry-level cost $14.50/month, while the Pro costs $49.50/month and offers many more features.
The 3Commas cryptocurrency trading bot can implement several strategies based on technical indicators.
It has a great community and you can purchase several online courses on how to use the 3Commas Bitcoin bot.
Bitsgap is best known for its unique automated trading bot. Thousands of traders of various backgrounds and skills use Bitsgap daily to maximize profit potential through automated trading.
The algorithm Implemented in the Bitsgap platform is based on a simple and efficient technique called GRID. It distributes investments proportionally within the trading range predetermined by the trader.
Every time a buy limit order is filled, the bot places a new sell order right above its price. And vice versa, a new buy order is placed below each executed sell order. As long as the price is within the trading range, the bot trades non-stop.
The Bitsgap algorithm is designed to maximize profits from buying on drawdowns and selling on rallies every time the price fluctuates.
Automatic cryptocurrency trading robots have all the risk control features like Stop Loss, Trailing UP, Take Profit, and multiple exit strategies.
- The solution is cloud-based, so you don’t have to download anything.
- Trading robots are based on efficient and transparent logic.
- Risk-free trading simulator in demo mode.
- Tested strategies for quickly launching a bot.
- 14-day free trial.
When using Pionex, you don’t have to mess around with API keys.
Pionex currently offers 10 cryptocurrency trading bots:
- Grid Trading Bot,
- Leveraged Grid Bot,
- Margin Grid Bot,
- Infinity Grid Bot,
- Reverse Grid Bot,
- Leveraged Reverse Grid Bot,
- Dollar-cost Averaging Bot,
- TWAP Bot,
- Trailing Take Profit Bot,
- Spot-Futures Arbitrage Bot.
At its core, Pionex is an exchange with a built-in cryptocurrency bot. This is one of the best free crypto trading bot platforms we have seen since 2017. It aggregates liquidity from Binance and Huobi and provides a free trading bot that works with this liquidity.
This trading bot is very easy to use. And basically, we prefer to trade bitcoins with it. Bitcoin has the highest market value and, in our opinion, is the center of the entire cryptocurrency space.
The Pionex platform is completely secure and has MAS and MBS licenses from Singapore and the US. This cryptocurrency bot ranks high on our list.
One of the best features of Quadency is the back testing feature, with which you can make good decisions based on data and numbers, rather than acting blindly. This is also a very important feature for a cryptocurrency trading bot: no one will argue with the fact that it is useful to know the results of work on historical data before investing your money.
Coinrule is the best cryptocurrency trading bot for beginners. It implements the “ if-this-then-that ” logic,
more than one hundred and fifty predefined sets of rules that will help beginners which allows even not very advanced traders to build their trading strategy in a minute. A user-friendly interface helps users create a trading bot step by step.
The library of templates contains customization options to customize the trading system to suit your needs. The platform allows you to use various trading tools, including stop loss, take profit, as well as basic technical indicators.
The list of trading strategies supported by Coinrule is almost limitless, and the company regularly publishes new ideas in the platform Knowledge Base.
Another interesting feature is the demo exchange. Traders can test their trading systems in a secure environment with virtual coins. The demo version trades at prices that come directly from Binance, with no risk involved.
HaasOnline is a bot-enabled paid cryptocurrency platform like no other. Like other options, it offers standard pre-built bots for strategies like arbitrage, market making, etc.
However, thanks to the release of its scripting language HaasScript, users can develop very complex trading bots using a drag-and-drop constructor or an intelli-sense editor. You will also have the opportunity to back test or trade your strategies in demo mode before live trading on twenty-five exchanges.
Their current product is a non-custodial type of local trading server that provides complete privacy, preventing outsiders from viewing your trading data and strategies.
In addition, the team plans to release a cloud version for retail traders. There is no free trial, but a discounted 14-day license is available.
Shrimpy is a paid service offering cryptocurrency trading bots with rebalancing support. It is this feature that distinguishes it from other bitcoin trading bots. It helps users to automate their portfolios and balance them according to certain ratios.
Shrimpy is one of the best cryptocurrency trading bots in 2022 and that is why we included it in this list. However, this bot was specifically designed for portfolio management, indexing, rebalancing, and back testing strategies.
Perhaps the best feature is the portfolio rebalancing when you withdraw coins. The platform supports more than ten cryptocurrency exchanges.
At the same time, Shrimpy makes only a few transactions every day. So it is better suited for long-term investors.
CryptoHero allows you to automate trades for free right from your phone. No programming skills are required. You can trade around the clock with popular cryptocurrencies such as Bitcoin, and Ethereum, using bots based on technical indicators.
CryptoHero supports many exchanges while allowing you to track all cryptocurrency trading indicators individually or aggregate them across all exchanges from one application.
Each cryptocurrency exchange trading bot can be configured using different technical indicators. At the same time, it is allowed to enter a trade with the help of one, and exit with the help of another, and all this without writing a single line of code.
In addition, CryptoHero offers preset for popular technical indicators and allows you to use multiple rules and triggers at the same time.
You can also back test your bots using historical data before deploying. At the same time, you will get the estimated performance of your trading bot based on actual data with different trading frequencies and for different periods up to a year.
Depending on the tariff package, you will have to pay from $15 to $35 per month.
One of the features we have tried out in TradeSanta Trading Bot is the Grid Bot. Pionex and 3Commas already offer the same feature for free, so if you’re here for the grid bot, we don’t see the point in purchasing the bundle. But if you came for other features, think for yourself.
Trading bots can help traders continuously interact with the market, even if they are physically unable to do so. They help to remove the stress and emotions that are often found in any financial market, not least in the cryptocurrency market.
However, cryptocurrency trading bots are not for everyone, and not everyone needs them. Casual investors are not the main target audience of trading bot creators, and if you intend to buy and hold bitcoins, then there is no point in paying for a crypto trading bot.
In addition, if you are not a competent programmer or are not familiar with the principles of creating financial strategies, cryptocurrency trading bots may also be useless for you. However, if you have the necessary knowledge and skills to overcome these hurdles, a trading bot can be a useful tool for monitoring and profiting from the cryptocurrency market.