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Everything you need to know about Crypto Trading Bots

Following the second peak in market capitalization of cryptocurrency, one cannot deny that cryptos are here to stay and subsequently thrive for the years to come. They present themselves as a better alternative to fiat money, and their flexibility, speed, transparency, and anonymity improves the traditional way economy is handled by political institutions and banks.

Some might say this is only a crypto-mania, but we disagree, after a closer inspection is made to the underlying democratic nature, security and technology of cryptocurrency, its fundamental value becomes clearer, explaining its wide recent and future mass adoption.

But in this post we won´t delve deeper into why crypto will continue thriving, we´ll explore ways to automate our crypto investing/trading, and achieve a certain passive income for those who don´t have the time to sit in front of charts all day long.

Some terms that will be touched later…

  • Rebalancing is the restoration of the original structure of a portfolio, (original proportions)
  • Portfolio management organizes various aspects of a grouping of assets, like their proportion, adding or removal from the portfolio.
  • Smart order routing is a solution to liquidity fragmentation, which is a problem emerging when an asset is traded in different venues with differences in liquidity.
  • HODLER is a term referring to people that “Hold on for Dear Life” to crypto currency. They are crypto investors who buy and hold their positions for the long term, trusting the fundamental value of crypto.
  • Backtesting is a method to assess the future performance of a trading strategy from historic data.

Why should you use bots to handle your investments and trading?

In general, many things are being automated for clear advantages that bots have when compared to human beings, bots are emotionless, accurate, and above all available and working 7/24. The caveat: they must be programmed and are as smart as the time that we invest in building them, and we haven’t figured out how to make them surpass our strengths, like reasoning, creativity, and introspection. But fear no longer, since there are already many online services allowing you to start trading in the cryptocurrency market with black box bots, customizable bots, or even with SDKs  giving you access to the market with backtesting features for those of you who already know how to code and prefer to design every detail of their bots.

Now let´s explore some of these services that are out there in the internet:

Gunbot stands out for:

  • To use their services, you don’t pay for a recurrent subscription, they currently have four types of lifetime licenses paid in bitcoin.
  • Their software can be used on any number of computers once you pay for a license and supports 10 different exchanges.
  • Their bots are designed using strategies, which are assigned to crypto pairs. Some of these strategies have explanations in their documentation, but others are not described as much.
  • Their service is not cloud-base, everything works on the user’s computer.
  • They have a telegram community and highlight their privacy policies like not collecting any data about user trades.
Pionex

It is and exchange with currently 10 inbuilt trading bots, no need to worry about API Keys. Their bots are easy to use, with some of them only needing a few parameters adjusted by yourself or by an inbuilt AI Advisor. Now, let’s describe their currently available bots:

Bot NameBot description
Grid trading
bot
The basic idea of the grid trading bot is to buy whenever price goes
a bit down or sell when it goes a bit up, if the price is within a specified range.
Reverse grid
bot
It is a bot meant to accumulate a specific coin when its price drops.
Infinite grid
bot
This bot is an improvement over the grid trading bot, this one uses percentages to define
buy and sell price levels and does not have a price range for its upper limit.
TWAP
bot
TWAP is a strategy that allows high volume traders to execute orders
without affecting the coin´s price too much. This is done by dividing
the order into smaller amounts over a time.
Trailing take
profit bot (TTP bot)
This bot helps you to buy/sell closer to extremes. For example,
you wish to sell 1 eth and hope to sell it at a very high price,
then with this bot you can set a trailing take profit with a given
percentage at a specific price level, resulting in higher profits in the long run.
Leveraged grid
bot
This bot is like the grid trading bot, but it utilizes the lending market to magnify profits.
Margin grid
bot
Like the leveraged grid bot but can also go short.
Leveraged reverse
grid bot
Like the reverse grid bot but with loans.
Spot-futures
Arbitrage
This bot exploits the funding rate mechanism that is used to converge
perpetual future contract prices to their index prices.
Zenbot

Instead of being an online service with inbuilt trading bots, this is an open-source repository using Node.js with a big community (around 1k members on reddit in 2021/03). It stands as an ideal baseline for those of you who like to tweak with lots of configurations, strategies, exchangers, and trading pairs. The interaction with the bot is done using the command line, supports back-testing features and charts to visualize the bot´s operations and results.

Shrimpy

This is an ideal Crypto Trading Bot Service for HODLERS, since it offers many functionalities related to automated portfolio management like rebalancing, indexing and Backtesting, supporting more than 10 exchanges. Besides that, they also have a social module, with which you can also copy someone else’s trades (like in eToro).

Trality

Trality has 3 paid plans and a free one. Having its own SDK, it stands as a gateway to the crypto market for developers wishing to tweak lots of features comfortably. They also give the option to casual traders with little coding experience to create their own bots using rules.

Haasonline

They stand out for their HaasScript, which allows the development of trading bots using a drag-and-drop approach.

HaasScript

But its important to notice that their HaasOnline TradeServer is a product mainly aimed at enterprise users, although they are currently working on a HaasOnline Cloud for retail users.

How to measure your bot’s performance?

Even if you have one bot or dozens running, it is extremely important to track how well they are doing and stablish metrics to compare them from one another. An online cloud journal that excels at this and more is offered by Swiset, where you can transfer all your trades and get insights and metrics on all your bots trading, allowing you to constantly improve your automated trading.

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