Cryptocurrency trading isn’t easy. However, there are many people who have honed the art of trading bitcoins and altcoins on a daily basis. Trading bots are used by many cryptocurrency traders to execute trades faster and more efficiently, and sometimes even in their sleep.
What are Trading Bots?
Trading bots are software programs that connect to an exchange (usually via API protocol) and make trades on behalf of the users. They work using a variety of trading indicators and strategies. Since trading is all about mathematics and fast complex probability calculations, bots should be better at trading than humans.
The bots make trading decisions by following the market’s price changes and reacting according to a set of predefined and pre-programmed rules. Typically, a crypto trading bot will follow and analyze technical indicators and signals such as volume, orders, price, and time. Most of the more advanced bots can be customized to execute your own trading strategy so they are great if you know what you are doing.
Traditional markets also have algorithms and bots that are, however, not accessible to regular mortals as they are super complex and cost a fortune.
That is not the case in cryptocurrency markets as you will see and read below.
Top Bitcoin and Altcoin Trading Bots
This article is very long and if you need a quick solution and recommendation, these two trading bots have proven to be on top of the game when it comes to automated trading.
|Price From||$19 Month||$129 lifetime|
|Visit||Visit (use code |
to get 10% off)
Below is a tabular overview of all notable altcoin trading bots on the market, most of them are described in more detail in the second part of the article.
|Cryptohopper||$19 to $99 per month||9|
|CryptoTrader||$16.50 to $199 per month||9|
|Margin.de (“Discount10” for 10% off)||$129 to $2999 one time fee||17|
|Trade Santa||Free to $100/month||4|
|Gunbot||$260 to $1,961 one-time||10|
|Haasbot||$475 to $1,360 per year||7|
|Autonio||$50 per month||2|
|Kryll||Free to 20,000 KRL (~$1,400)||4|
|Zignaly||Free (Beta Version)||1|
|HodlBot||Free to $10/month||2|
|3Commas||$30 to $100 per month||12|
|BTCRobot||$19.99 to $39.99 per month or $399 one-time||2|
Types of Trading Bot Strategies
In the early days of cryptocurrency trading one of the primary strategies that traders used to make profits was arbitrage – i.e. buying assets in one market and then selling them in another for a higher price, thus earning profit on the difference. As cryptocurrency exchanges were decentralized, there were often large differentials between prices offered on various exchanges, meaning that profits could be made through arbitrage.
On CoinMarketCap there are currently 208 crypto exchanges listed, where exchanges with no fees are excluded. When no fees are being charged at the exchange, it is possible for a trader (or bot) to trade back and forth with themselves and generate a lot of “fake” volume without penalty. It’s impossible to determine how much of the volume is fake so they excluded it entirely from the calculations.
Due to the large number of exchanges and high volatily of cryptocurrencies, traders can take advantage in the form of arbitrage.
An arbitrage is the possibility of a risk-free profit after transaction costs. For example, an arbitrage is present when there is the opportunity to instantaneously buy something for a low price and sell it for a higher price. People who engage in arbitrage are called arbitrageurs, such as a bank or brokerage firm. The term is mainly applied to trading in financial instruments, such as bonds, stocks, derivatives, commodities and currencies.
With so many exchanges available, there could be the same asset but with different price on different exchange. For instance, the price of an asset A on exchange 1 is 10$, while on exchange 2 it is 15$.
Although the spread between crypto markets are getting smaller by day, they do still exist and trading bots can assist traders in making the most of these differentials.
Trading bots can also enable users to use the market making strategy. Market making is an activity whereby a trader simultaneously provides liquidity to both buyers and sellers in a financial market. Liquidity is the degree to which an asset can be quickly bought or sold without notably affecting the stability of its price. Market makers “make a market” by quoting prices to both buy and sell an asset. In this way, the market maker (or liquidity provider) acts as both a buyer and seller of last resort where there would not naturally be another buyer or seller, thereby providing liquidity.
As prices oscillate and vary, the trading bot will automatically and continuously place limit orders in order to profit from the spread.
This strategy does not work good in low liquidity environments and is a highly competitive.
Do Trading Bots Work?
The main purpose of trading bots is to automate things which are either too complex, time consuming, or difficult for users to carry out manually.
Good trading bots can save a trader time and money by collecting data faster, placing orders faster and calculating next moves faster.
Majority of trading bots use an indicator from technical analysis called an exponential moving average (EMA) as a principle strategy for analyzing the market. Bots can be programmed to make an action once EMA surges or drops certain thresholds.
By setting up the bots, users can set their thresholds to fit with their risk profile. However, one of the main downsides of EMA and similar indicators is that they are so called lagging indicators – based on past history, which, as all traders will know, is not indicative of future performance, especially in the cryptocurrency industry where volatility is rife.
Therefore the answer to the question of whether trading bots work is – “depends”. They do work, but not necessarily for everybody.
Trading with automated crypto trading bots is a technique that uses pre-programmed software that analyzes market actions, such as volume, orders, price, and time, and they are rather common in the bitcoin world, because very few traders have time to stare at the charts all day. Bots or program trading is used within many global stock exchanges.
Most people trade bitcoin as a way to generate passive income while working their regular day jobs, and bitcoin trading bots are said to establish more efficient trading. There are controversial automatic Bitcoin trading bots like Cryptosoft, and there are crypto trading bots that can be downloaded online, and there are also trading bot services like you have to pay for, offered by various trading engine and programming companies.
Trading bots like Bitcoin Era are software programs that connect to an exchange (usually via API protocol) and make trades on behalf of the users. They work using a variety of trading indicators and strategies. Since trading is all about mathematics and fast complex probability calculations, bots should be better at trading than humans.
Bitcoin trading bots can be utilized on many well-known cryptocurrency exchanges today. There are crypto bots that are free of charge and can be downloaded online, and there are also trading bot services you have to pay for, offered by various trading engine and programming companies.
According to InsideBitcoins, there are also the robots that have been claimed to be endorsed by celebrities like Bitcoin Trader. Remember though, not every robot is what it claims to be. Beware of Scams.
With so many people relying on crypto trading bots, the question becomes which one should be avoided and which one can be trusted. Below is a list of best cryptocurrency trading bots.
Best crypto trading bots
We have made our list of top trading bots based on the following criteria:
- Trading strategy.
What strategies of technical analysis can the bot execute? How customizable are those strategies?
- User Interface.
Friendly user interface is another important factor. The bot has to have simple and intuitive processes that are easy to learn and implement.
- Ease of use
If you are a beginner, the crypto bot needs to have premade setups that are easy to choose and launch. For the more advanced users, ability to customize the crypto bot to the settings and preferences user has was of highest importance.
What is the latency in transferring data from exchanges? Sometimes it is important to have the order be executed immediately and a slow bot can cost you a lot of money.
Of course, price always plays a role. You want to earn money, after all, and not break a bank for a piece of code.
Authentication methods, 2 Factor authentication, API key encryption mechanism. Privacy policies related to users trading data.
Does the bot have a good reputation among the wider crypto community? Check online forums for reviews from other users to see if the crypto bot is legit and if they’d recommend using it.
While most reputable crypto bots will work with most reputable exchanges, make sure any program you choose will allow you to trade on the exchange(s) you want to use.
Cryptohopper is a crypto trading bot that offers some unique and interesting features, including cloud trading, some social trading options and a large variety of coins/exchanges to trade on/with. Stop losses and trailing stops are especially welcome elements here, as they help you tremendously with risk management. As with any trading bot, you’ll find conflicting reports regarding its effectiveness, functionality and safety.
Created by two brothers from the Netherlands, one a day trader, and the other a web developer, this trading bot can brag about having a perfect blend of experience and knowledge – both in the worlds of trading/technology – behind it from the start. The two merged their ideas, skills, and experiences and created Cryptohopper.
It currently offers integration with the following crypto exchanges:
Work is apparently being done to integrate the cryptocurrency trading bot with other well known crypto platforms like HitBTC, Cobinhood, Cex.io, Bitstamp and bitFlyer APIs.
Cryptohopper is different than most of the market competitors in the sense that it’s web-based; it’s stored on the company’s servers, operates on a cloud-like infrastructure and can be accessed through any web browser. While the advantages of this include fast and simple access to the crypto bot, without needing any additional hardware to set it up and keep online.
Margin (Use code “Discount10” to get 10% off) is a trade bot that has 17 supported exchanges, 2 new crypto trading bots, and great features like a profit/loss indicator, market scanner, social integrations & more. Plus, they still offer the free demo to try everything out first!
Use code “Discount10” to get 10% off on the checkout!
Margin currently comes bundled with two trading strategy bots:
• Ping Pong Strategy
• Margin Maker Strategy
Just as the name suggest, the ping pong strategy allows you set a buy and sell price and the bot will do the rest. The mArgin maker strategy is a bit more advanced and can buy and sell based on price action adjusting with the course direction of the market.
They obviously have a good designer on their team as their GUI is by far the best looking out of all bots and has lots of customization options.
Prices are paid for lifetime licenses and range from $129 for starter package over $259 for standard to whopping $2999 (but these are aimed at enterprise clients).
One drawback is that it is not a cloud-based software, rather a downloadable progmram that you run from your local machine.
(Use code “Discount10” to get 10% off)
3Commas is one of the most well-known trading bots in the market. The name referencing the billion-dollar club is a Russian made software solution.
3Commas is a crypto trading terminal which features bot trading and portfolio management. It features a SmartTrade terminal which allows users to execute orders and trades, set bot-trading and stop-loss/profit positions.
Their plans range in pricing from $22 to $75 per month.
Binance, CEX.io, Coinbase Pro, Bittrex, BitMEX, Poloniex, YoBit.net, KuCoin, Bitfinex, OKEX, HitBTC, Huobi Global, Bitstamp, Cryptopia.
Haasbot algorithmic trading software was created In January 2014 by Haasonline. This crypto trading bot is very popular among crypto enthusiasts and trades bitcoin and over 500 altcoins on many major crypto exchanges, including fully automated trades on platforms such as Kraken, BTCC, GDAX, Poloniex, Bitfinex, Gemini, Huobi and many more.
On paper, this cryptocurrency trading bot does all of the trading legwork on behalf of the user. However, some input is required. Haasbot bot is highly customizable and enables a variety of technical indicators, and is also capable of recognizing candlestick patterns. One has to be knowledgeable to use this trading bot and make a profit from doing so, considering it costs between 0.12 BTC and 0.32 BTC per three-month period to use this tool. There is, however, an extensive knowledge base for the traders willing to learn, provided by the creators on their site.
Gunbot is an older crypto trading bot but still one of the more advanced ones that provides a wide range of settings and strategies which are ideal for both beginners and professionals. It is used to take over (most) of the workload of traders on the cryptocurrency markets.
The cryptocurrency trading bot gives users the opportunity to customize their trading to a level which no other trading bot can provide. Almost all the strategies and technical indicators that manual traders use on a daily basis can be found in this bot and used to trade automatically. The interface is user friendly so that everyone can easily get a hang of it. It is suited for more experienced crypto traders as well as beginners; some strategies are highly configurable while others are easier to use.
The program comes with tons of trading strategies that are highly configurable and includes different types of insurances to optimize your crypto trading which are explained on the website.
Another positive feature about this crypto bot is that it’s a one-time payment, that means: no need to renew every month (pay once and get all the future updates for free)!
Don’t want the trading bot anymore? Don’t worry, Gunbot includes something that no other trading platform offers: Gunthy coin. Gunthy coin is a feature that no other trading platform offers, a cryptocurrency token that is offered to the users when buying the the bot. The amount of tokens sent to the buyer are derived from the type of license that they acquire. Why is this important? Imagine that trading is nothing for you and that you want to sell your crypto bot, that’s possible with the Gunthy token!
Gunbot is used by thousands of crypto traders daily which creates a close and helpful community. Its community is highly active on social media platforms to discuss different trading strategies and help each other out. The trading platform provides different packages which can be upgraded if needed. There are 4 different licenses available, ranging from 0.04 BTC to 0.3 BTC.
CryptoTrader is less known cryptocurrency trading bot that is gaining popularity. This cloud-based automated cryptocurrency trading bot claims to allow users to build algorithmic trading programs in minutes. Not having to install unknown software is a big plus. However, it remains to be seen if this platform is legitimate. One intriguing feature is that the company also offers a “Strategy Marketplace” where users can buy and sell trading strategies.
Click here to read full CryptoTrader review!
All major crypto-currency exchanges, such as Coinbase, BTCe, Bitstamp, and more, are supported for both backtesting and live trading. Using their backtesting tool, you can see how your trading strategy would work over different market condition. Their goal is to provide traders with cloud-based automated trading solutions powered by cutting-edge technology, and the company states that its automated trading bots in are unique compared to the current crypto trading bots on the market today.
RevenueBot is a cloud-based cryptocurrency trading bot designed for making money while trading in top exchanges. An automatic martingale-based trading system is carried out around the clock. There is no subscription fee, the service only takes a percentage of the profit received from trading.
Supported exchanges are Binance, DSX, Exmo, Livecoin, Okex, HitBTC, and other major cryptocurrency trading platforms. RevenueBot is an attractive service for passive earnings which doesn’t take a lot of your time.
RevenueBot is most suitable for careful trading and eliminating big risks, and with the right settings brings in a steady income of 0.2 to 0.7% of the deposit per day. It does not take much time to monitor its work either.
Bot trading is safe, as the users’ funds are kept in their accounts on exchanges. RevenueBot does not take, does not keep, and does not have access to fund withdrawal.
RevenueBot fee is calculated using the earned profit and is equal to 20%. This is beneficial for customers with small deposit. The maximum commission is only 50 USD (per month) in BTC equivalent, which is also beneficial for customers with a large deposit. The fee is deducted from the internal RevenueBot account. And you can replenish the account balance for any amount you choose.
The bitcoin bot has a lot of settings, each is described in detail in the FAQ (https://revenuebot.io/faq.html), and technical support is always ready to help you and find the right trading strategy for you.
Official site— https://revenuebot.io/
The project has got a number of features that distinguishes it from others:
1. This is a cloud-based service that does not require any programs to be installed.
2. The project also presents information on the team and its other projects
GET READY FOR THE TAX SEASON! CryptoTrader.Tax takes away the pain of preparing your crypto taxes. Simply connect your exchanges, import trades, and download your tax report in minutes. Use CRYPTOTAX10 for 10% off!
3. Open source code and link to the github – anyone can check the code and algorithms of the automated trading bots.
4. Additional modules for cryptocurrency traders (arbitrage, social and telegram assistant)
5. Affiliate program up to 50% 6. 3 types of automatic trading bots (aggressive, balanced and conservative)
There are three additional modules:
1. A social analyzer that searches and sends information to the user about upcoming airdrop, hardfork, re-branding, and so on. The user can customize the keyword dictionary on his own. It is based on the research conducted by the team, which confirms the influence of news on the crypto rates.
2. The second tool is an arbitration bot, which not only checks the arbitrage windows, but also checks whether the deposit and withdraw of currencies are available at the moment. It is an important point because the majority of trading bots do not verify it.
Another important detail is the ability to set the desired volume of arbitration. This means the arbitrage bot will not only take the first best orders from the order book, but will analyze their depth and calculate what kind of profits will be received on a specific volume. This is a very useful and rare feature.
3. Telegram assistant. For convenience, the project team has developed a telegram assistant that allows you to fully manage all the bots. According to price, it is relatively low and accounts for 0.25% of all trades. On the site you can learn about the history of bids and general statistics on bots.
Gekko is a Bitcoin trading bot and backtesting platform that supports 18 different Bitcoin exchanges (including Bitfinex, Bitstamp and Poloniex). Gekko is free and 100% open source that can be found on the GitHub platform.
This automated trading bot even comes with some basic trading strategies, so using it seems rather straightforward.
Gekko comes with a webinterface that was written from scratch. It allows you monitor your local data, strategies. It can also run backtests and visualize the results. Using plugins, which are available for IRC, telegram, email and a lot of other platforms, Gekko is able to update you wherever you are! Gekko runs flawlessly on all major operating systems (Windows, macOS, and Linux).
You can also run it in the cloud or on your raspberry PI without any issues! It will not exploit arbitrage opportunities, nor is it a high-frequency trading bot by any means. With a good list of supported cryptocurrency exchanges, Gekko is definitely a bitcoin trading bot that is worth checking out.
BTC Robotis one of the very first automated crypto bots to ever be created. The trading robot offers multiple plans for different types of software and membership, and the cheapest robot plan is $149 for the silver software. It gives traders a downloadable version for various Windows operating systems. On the other hand, Mac users have to pay a touch more. It seems to do the job and is quite easy to set up. However, user’s mileage may heavily vary when using this tool. Some people seem to be making modest profits.
On the other hand, others seem to struggle to get it to work properly. The company notes that its algorithmic trading does not predict markets perfectly. This means that there will always be losing and winning trades. It is important to note that there is a 60-day refund policy. This feature makes it a no-brainer to try out regardless.
Zenbot is another open-source trade bot for bitcoin traders. It is important to note that this trading bot has not seen any major updates over the past few months. However, it is available to download and modify the code if needed. This marks the third iteration of Zenbot, which is still a lightweight and artificially intelligent bitcoin trading bot, and it is also one of the very few solutions capable of high-frequency automated crypto trading and supporting multiple assets at the same time.
This bot supports following crypto markets – Gemini, Quadriga, Bittrex, Kraken, Poloniex, and GDAX. Work on further exchange support is ongoing. According to the GitHub page, Zenbot 3.5.15 makes a 1.531 ROI in just three months. This is quite surprising.
Should you use a crypto trading bot?
Cryptocurrencies are a nascent and atypical asset class and for this reason it is hard to make a regular return off of them in the same way that cash or a stock create value. Many of the best stocks pay out dividends which is in addition to price appreciation main wealth creation mechanism from them. There isn’t really an analogue for this in the crypto market, unless crypto owners lease out their cryptos to derive an income from their holdings.
Or you can hoard staking coins and participate in the network maintenance as a block producer or at least, delegate voter.
Trading bots represent the other option for passive income earning in crypto industry – even though, as we emphasized earlier, they are not completely hands off and to require monitoring and manual interventions.
Trading Bots For Passive Income
If you want to put your crypto coins to work for you, trading bots could make sense to use.
The ‘bot’ is superior to a human because it is emotionless and it is awake and looking for income opportunities 24/7. Of course, there is no such thing as free money.
Any risk that can generate a return has the potential to lose money. It is a good idea to make sure that any automated investment platform you choose to trust with your cryptos can prove that it works with a verifiable transaction history.
Bot trading is absolutely legal in cryptocurrency markets but also in the stock market (although not all brokers allow the use of such software).
Yes, they really do work. However, you do need a certain level of knowledge to set them up and it is not, as often marketed, a hands off money making machine. You need to monitor their performance, especially in times of high volatility – sometimes even to turn them off to prevent profit losses.
Yes, there really are free crypto bots that work – Gekko and Zenbot are two most known free bitcoin bots. They are completely free and safe to use and people do make money by using them.
Best Binance bots are:
Best Coinbase Pro bots are:
Best Kucoin bots are:
Best Bittrex bots are:
The software can be difficult for inexperienced crypto traders to understand, which means that bot trading may not be for everyone. Furthermore, traders have to trust in the reliability and efficiency of companies that offer algorithmic cryptocurrency trading. There are many different businesses online offering crypto bot services. But be careful, because some of them may not be legitimate. However, if used correctly, reputable and functioning trading bots may increase trade profits.
CaptainAltcoin's writers and guest post authors may or may not have a vested interest in any of the mentioned projects and businesses. None of the content on CaptainAltcoin is investment advice nor is it a replacement for advice from a certified financial planner. The views expressed in this article are those of the author and do not necessarily reflect the official policy or position of CaptainAltcoin.com