Crypto Trading Bots – Are They Useful?
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In today’s digital world, the cryptocurrency market has become a popular subject for investors. Moreover, many people are trying to figure out how to earn money by investing in these markets. However, it is not easy for beginners who do not understand the industry well and have little experience with trading.
To survive in this competitive environment, you need a reliable tool to help you make decisions when you purchase cryptocurrency and manage your portfolio. That’s why crypto trading bots may be useful. They provide an automated solution for making financial decisions based on market data and trends.
In this article, we will explain what they are, how they work, where they come from, and how much money can get earned using them.
Table of Contents
Why Are Crypto Trading Bots Useful?
They allow you to run a trading strategy 24/7. Crypto trading bots can get programmed to execute trades automatically. It allows you to trade 24 hours a day, 7 days a week.
They allow you to automate your trading activity. Or else, you will have to feed information to sell or buy cryptocurrency. These can help you trade multiple coins at once. You might have noticed that exchanges often limit the number of markets available for each cryptocurrency pair (e.g., BTCUSD).
Cryptocurrency bot developers have created software that allows users to trade multiple coins simultaneously on these exchanges. They access several accounts at once through one account interface and trade different pairs in each account (e.g., BTCETHXRP).
It is possible because most exchanges don’t require users who sign up for their services through an intermediary like OKX, Coinbase, or Binance. These do not require ID verification when opening additional accounts with them. Simply entering an email address is enough!
Many crypto bots offer this functionality as an additional feature in addition to standard features such as backtesting historical data sets against live market conditions, etc.
Crypto Trading Bot Features
As the name suggests, a crypto trading bot is a piece of software that automates trading on your behalf. If you’re not familiar with what automated trading means, it’s essentially a way to use algorithms and computer programs to trade for you instead of having to do it yourself.
Several features can help make bot trading easier:
Backtesting allows users to test out their strategies on historical data before risking real money in the market. This helps traders determine if their strategy works well or not before they put any actual funds into it.
Paper trading is another feature that lets users test out their strategies without risking any money at all (other than purchasing virtual coins). It also serves as an excellent way for beginners to get comfortable with using bots before they start using them in real life.
Technical analysis gives users access to charts, graphs, and other information regarding cryptocurrency prices. They can decide when would be an appropriate time for them to make trades. These are basis these factors alone rather than relying only on personal experience or intuition as some people do.
How Does the Crypto Trading Bot Work?
Crypto trading bots are a form of algorithmic trading that uses machine learning and artificial intelligence to predict price movements.
These bots can read data from the market, analyze it and then buy/sell based on their prediction. For them to work, they have to get programmed with a strategy that is basis the historical data analysis which tells them when to buy/sell and how much.
They also need large amounts of capital to make any significant gains since they don’t rely on human intuition or emotions when making trades. They rather rely solely on mathematical models that are hardcoded into the bot software code itself.
Cryptocurrency Trading Bots – 5 Best Bots
You’re interested in trading cryptocurrencies. However, you don’t have the time or patience to sit at your computer all day waiting for the right moment to buy or sell. You can use a cryptocurrency trading bot may be for you.
Here are five of the best bots currently on offer:
- Gekko
- Zignaly
- Cryptohopper
- Haasbot
- Cryptotrader
Cryptohopper
Cryptohopper is a software-as-a-service (SaaS) cryptocurrency trading bot that can get used to trading crypto assets. It works by connecting to several exchanges, including Binance, Bittrex, and Poloniex.
The user selects the coins they want to buy or sell and the price they are willing to pay. Then Cryptohopper waits until the price reaches this level and executes the trade automatically.
Gekko
Gekko is an open-source trading bot, which means you can access and modify its code. As a result, Gekko supports all major exchanges, and you can use it to trade on them using technical analysis tools like moving averages.
Gekko has a backtesting feature that lets you simulate trading strategies over historical data before trying them out with real money in the real world. It also supports plugins so that users can add their functionality to the platform.
You’ll need to install Gekko on your local machine. There are no cloud-based versions of this software available at present (though there are plans for one). At the same time, this makes it somewhat less convenient than other options on this list. It also ensures complete control over how all data get handled. Thus, security from any potential breaches caused by third parties accessing your information.
Cryptotrader
Cryptotrader is a cloud-based solution that allows you to create your trading bot and backtest it. You can also use their existing strategies or buy someone else’s, but it’s important to remember that these bots have had somebody write them who knows nothing about cryptocurrency.
You’ll need an account with Cryptotrader before you can get started. It means you’ll need some BTC or ETH if you want to test out the demo version of their software (you’ll also need some fiat currency for the real thing).
Conclusion
The term crypto trading bot refers to a piece of software that can execute trades based on set criteria. In other words, it allows you to automate your buying and selling activity.
A great example of this is like having an assistant who takes care of all your financial transactions for you 24/7. It is so because some people don’t have time for that thing themselves! You can choose any of the numerous options that provide you to buy crypto with a credit card or convert cryptocurrency (fiat). So choose wisely!
