How cryptobots work?
Each bot is a set of indicators and parameters, which automatically conduct a transaction on the exchange (or semi-automatically: with operator confirmation), when a buy or sell signal is determined. Most of the time, the bot is tuned to a specific market and time period, to make the results more predictable.
This is not magic, which makes only good deals and brings 146%. Average profitability for 1-2% in a day, given the volatility and strong impact of news on exchanges.
Bots are of different types:
- trading bots — are traded based on the indicators selected by the user. These bots are highly customizable., you can use a combination of indicators to create your own trading signals.
- arbitrage bots – are used to profit from the price difference between different exchanges.
Option 1: is bought on one exchange, transferred to another and sold there - this threatens with low income (or loss), since transactions take a long time and the difference may already disappear.
Option 2: on one exchange there are dollars, on the other cryptocurrency. We buy coins on the exchange with a low rate, on an exchange with a high rate, we sell the same amount at the same time. Then the reverse operation is performed (also in plus or minus, but less, than the profit from the previous trade) - the difference from the course in your pocket.
Example: Exchange1 — ETH is here 1000 dollars, we start this amount. Exchange2 - we have 1 ETH, and he is standing here 1200 dollars. We buy on the exchange1 ETH for 1000, sell ETH on the stock exchange2 for 1200. We wait for the mirror situation and make the deal again - as a result, the balances will be as follows: stock exchange1 - 1200$, stock exchange2 - 1 ETH и 200$ (Ideally, excluding commissions).
The essence of making money on arbitration Is an exchange with a difference in rates. for example, buy on 200 dollars 0.03 Bitcoin. Then you buy with them 2 ETH, and then you convert it back into dollars and you get 220$. Need to seize the moment, when quotes allow you to make money on the exchange.
If it is important to make the right decisions in cryptocurrency trading, then in arbitration you need to rely only on indicators. Income comes from the difference in rates on various exchanges (or within one exchange). You only need to compare quotes, catching the right moment.
Arbitration robot for cryptocurrency is much more useful, it's more convenient, so that the program finds the difference in rates. Therefore, it is much more difficult to find such bots.. Most often, these programs do not conduct transactions., but only show the optimal direction of exchange for obtaining benefits.
- order bots Are customizable bots, that are met when certain market conditions unfold. They can be combined together to automate trading strategies..
- also some separately highlight "scripts". Are the basic platform, on the basis of which experienced traders form their own bots. Designed for large participants, with sufficient knowledge and successful trading experience.
Bots are connected to exchanges via API. This is done in a few minutes., nothing complicated and the network is full of instructions. Further, data is collected and orders are opened on their basis.
for example, the robot sees a sharp drop in the cryptocurrency rate, which should grow over a longer period of time. The program creates buy orders and redeems coins, then the algorithm works, when the rate rises again.
Cryptocurrency exchanges are blocked for using robots? Not, because they themselves are interested in using them. The bot will conduct many transactions, unlike a person, he does not need to sleep, go somewhere, he is not sick or lazy. And from each operation, the exchange receives a commission.
How much can you get rich using bots??
If there was an easy way to get rich from bots and altcons, wouldn't all the money in the world have already been earned?
Firstly, many bots require investment: one-time purchase of the program, monthly subscription, return of funds into circulation at interest or a bot written by itself for the cost of your time.
Secondly, trading bots will rarely make overwhelmingly good deals. As practice shows, trader independently can make a big profit. But bots are good as background trading., since some money will still bring.
Depending on the time frame and that, what is your bot trading, you can both get there successfully and make a profit, so lose money. This is a free market, not a bank. When dealing with markets, there are many unknowns, any number of factors can trigger a rise or fall. Most bots will be the best fundraising strategy, than a buy and hold method, and while there is reason to think, that the chosen altcoin will grow, you, most likely, get profit.
Sometimes a bot is used to reduce losses, not just for profit.
If the bot doesn't meet expectations, you can always choose another cryptobot or suspend its work and trade manually, and then turn the bot back on.
Why use a trading bot at all?
There are many reasons, by which you would use the bot.
- maybe, you are an inexperienced trader and are looking for a way to get into trading, but then you need to analyze the bot behavior, to develop in trade too;
- may be, Do you want to, for someone to manage an account on the exchange, while you are absent or asleep: so money will make money without you;
- may be, you are not ready for stress, when you look at monitors all day, the bot gives rational and predetermined models of behavior, making trading emotionless;
- you can trade on several exchanges with several pairs at once, what can't one person do, Moreover, the bot places orders and finds signals faster,
- the bot also allows you to hedge part of the portfolio.
Which trading bot is better?
This looks like a question, which car is better. You must find that algorithm, which suits your needs and is not a scam. You have been checking the bot for some time and agree with the results.
The bot can be obtained in three main ways:
- write yourself based on the exchange API,
- download a trading bot for a cryptocurrency exchange (it's risky, threatens to steal funds),
- buy or subscribe to bots from major developers or local experts.
Where to get a trading robot for trading on the cryptocurrency exchange?
Some newbies think, that bots will trade more competently anyway, than they themselves. Also some professionals are looking for programs, to get prompts or automate some of your actions.
there is 3 option, where to get the robot:
- Create your own trading robot. This way is the best, because you decide, what features to enable, what parameters will be taken into account when making deals, and so on. Maximum safety, you know for sure, what's in your code and how does it work. but, this requires serious programming knowledge. As an option, you can attract freelancers or buy components for the robot, individual scripts are sold on forums and by special companies.
- Buy robot for cryptocurrency trading. Developers offer their programs on forums. The choice is widening, some bots are created for certain strategies, there are practically no settings in them. Security risk level is not the lowest, but the program code, which will conduct transactions, better check. You can also buy a robot for trading on cryptocurrency exchanges from companies, who specialize in such programs. The most popular of them are HaasOnline and BTC Robot.. There are different options to choose from. Cheap ones offer a minimum of customization, dear vice versa, stuffed with different chips.
- Free robots for cryptocurrency exchange. Why pay, you can download a trading bot on any torrents - some will say. Yes, there are many programs available for free, but if they do work, hard to imagine, how high is the chance of stumbling upon a fraudulent algorithm. Don't even try to find free trading robots, except for example, testing or familiarization.
A quick overview of some bots:
It is offered by HAASONLINE, which specializes in similar software. Positioned as a product for successful traders, who trade confidently, but prefer to free up some time. To get a robot, you need to pay for one of the three licenses. The cost of using for three months depends on the number of available options. Each license opens access to each class of bots, but limits the number of simultaneous applications and the number of indicators. The extended package is available 50 working tools, unlimited use of robots, insurance, templates.
Price: 0.035BTC every three months for a newbie subscription, which is quite expensive. Allows you to manage two bots of each type. Haasbot trading bots have been around for a long time, are deeply customizable and allow you to trade securely through different measures. Supports a large number of exchanges. The most tested option from the list.
Bot from Russian developers. Price: $19.99 per month for the silver plan. The bot works on its own technology, different from just following indicators. BTC Robot has a very emotional site, which aggressively offers profit in hundreds of percent. This is suggestive of fraud.. However, there are reviews from people about successful trading, but without profit in the promised volume, rather modest income, which only make sense in large volumes. There is also no trial version, to run the program. But there is a 60-day refund policy, if you are not happy with the result.
It has interesting features, including monitoring of exchange rates in the mode 24/7, ability to view charts for repeating models.
Using the program, enthusiasts of Ethereum and other altcoins can make good money.
Tradewave / Cryptotrader
Price: $14 per month for one bot. Anyone can write a trading algorithm and try it out against historical market data for free, collected on the platform. No code required to create a bot. The bot itself is stored in the cloud. Since March 2017 the platform is not updated.
Cryptotrader is similar in concept, but there is a free version, as well as the base for $8 per month. All written strategies and bots are posted on the main page, where you can collect followers and check your bot. For january 2018 year registration on the platform is closed.
On this platform, Blade Runner is popular with a lot of competent settings. (may seem daunting for a beginner). Price: 0.0035 BTC per month. There are also bots from the free segment, eg, Trading Places CE for portfolio rebalance.
It is an increasingly popular platform with an active and friendly team.. They are known both in the Russian segment, so in the West.
3Commas works with several exchanges, including Bittrex, BitFinex, Binance, Bitstamp, KuCoin, Poloniex, GDAX, Cryptopia, Huobi и YOBIT. Bot is running 24/7 with any device, since this is a web service: you can follow the trade on mobile devices, tablets, computers.
Allows you to set stop loss and take profit at the same time, and also has a social shopping aspect, which allows you to copy the actions of the most successful traders.
Another interesting feature is the function ETF cryptoportfolio, which allows you to create, analyze and check the portfolio and choose from the best, created by other: it already takes into account diversification, etc., you follow a pattern.
Prices depend on tariffs. The cheapest tariff in $25 proposes 1 stock exchange, five trading pairs and a simple bot for trading on the exchange with a commission 50%. In the tariff for $42 there is no such commission anymore. Professional rate for $84 removes all restrictions.
EasyTrading - free bot
EasyTrading works with Poloniex. Soon there will be an extension for Binance. While using the bot is free, the team accepts donations to support their work.
The principle of operation is to track daily price fluctuations. The bot automatically places buy orders in small increments, and then sells at the moment, when can I get the set profit.
So far, the project is only taking its first steps and is growing its audience., gradually supplementing the product with new functions. When your user base is wider, will gradually begin to introduce paid services.
It is an open source trading bot platform with historical data testing.. She supports 25 stock exchange (the team can add new, if you ask on github). Gekko is completely free, the code can be downloaded on GitHub.
This is a relatively simple trading application, which includes a user-friendly interface and basic strategies. The web interface works from any device, functionality is extended using plugins.
Although Gekko is not a high frequency trading bot (makes only a couple of trades per week depending on the configuration) and does not support arbitration, its list of supported exchanges and basic strategies makes it a good option for beginners, who just wants to try trading with an exchange bot.
This robot can also be used to perform transactions on many exchanges.. Developers offer 2 package for 50 and 80 US dollars. Differences between them in the possibility of arbitration, pending orders and access to the strategy programming language. The robot gained popularity due to the available opportunities:
complex platform algorithm takes into account up to 140 variables;
defines time intervals (Fibonacci zones);
a glass with quotes can be displayed in several forms.
Users check, that the installation and registration process is quite complicated, but the average monthly profitability from further use is often more 10%.
Qt Bitcoin Trader
Free software, which was originally designed to store bitcoins. In the future, the developers added more and more new trading opportunities., which subsequently led to the formation of a free exchange bot. Options for various operating systems and portable version available. Operations can be carried out at multiple sites. However, the whole process is controlled from the robot window in real time., there is also price data and history, therefore, for trading, the program and the PC must be included. Provides the ability to establish some rules for the implementation of operations. The functions of management and settings are significantly inferior to paid representatives.
Free to test for one month, further use is paid. Annual cost approx. $100, but monthly payment is also possible. $20. Software Russified, many automation methods and trigger applications are also available, which can be replenished for free after payment. Technical support, examples, training material will help in the management of trading operations. You can test the settings of new strategies.
If the available tools are not enough, that is, the ability to add your own using the programming language. Trading is available on any platform, but the license is tied to the BetFair profile, so registration is required to work. An extensive set of customization tools allows you to create trading systems, based on personal preference.
Many users have probably not heard about this program.. It was created by Christian Haschek, which brought together the most powerful trading algorithms together. At first, the program was only applicable to bitcoin trading., but now it can also be used to work with Ethereum.
The app design is pretty simple, but it has all the functionality, what you can expect from such decisions. To use the program, you need to have an account on the Coinbase exchange. This is the only platform, with which she works. But since the bot is written in PHP, easy to guess, that in the future its capabilities will be expanded.
In terms of convenience, this bot has everything for high-quality trading by novice traders, even if it does not perform data analysis and does not predict price trends. With such features, the application is not suitable for large investments., but is an ideal starter program for newcomers to the market.
Bot page on GitHub — https://github.com/chrisiaut/phptrader
Note: we do not take responsibility for your choice and do not recommend you any specific bot, although the editors talked with some teams personally. All the examples given are posted in the article for educational purposes.. To keep yourself safe, test any bot (especially free, open-source options) with little ones, symbolic amounts and not within a couple of minutes, but at least a week.
Why does the bot not buy / sell at the bottom / peaks?
Trading bots on cryptocurrency exchanges have a time period, when they wait, and the peak or bottom does not happen predictably, the bot simply cannot predict it with high accuracy. All bots are looking for special conditions for trading, and in most cases they will be executed just after the peak / bottom.
Sure, there are serious bots with a high degree of success and large developments at the heart, but they, usually, not available to the general public.
Why does one bot buy / sells, and the other is not?
Different bots are designed in different ways, with other algorithms and strategies, as well as personal settings I make them choose a different path. Sure, they will react differently to the market situation.
Disadvantages of robots for trading on the cryptocurrency exchange
Despite the many advantages, not all traders and beginners are in a hurry to buy a trading bot for cryptocurrencies. Primarily due to security concerns. After all, some robot will manage capital, and if you do not understand anything in the program code, problems may occur:
- profit will be transferred to the account of a third party;
- part of the income will be transferred to third-party wallets;
- generate income, and then they transfer the entire amount to the accounts of the scammers;
- collect user data, bases are used for various purposes;
- numerous transactions involve high commission costs;
- make mistakes, trade in the wrong currencies, make unprofitable deals.
The only way to be sure, that the robot is of high quality and working - write it yourself. But competent programmers are unlikely to read such articles at all., they already write the programs they need.
Differences between test and live trading
When the bot is trading, it will try to process the fixed price, but the market moves some prices during this time. This is called slippage., or slipage. Some smart bots have come up with, to minimize this effect. But still, consider yourself lucky, if you get an exact asking price, which bot wanted to trade.
Trading bots can help traders always interact with the market, even if they are physically unable to do so. They also relieve stress and emotions., which are often found in any financial trading markets. However, trading bots are not for everyone. Ordinary people, who sometimes sit on the stock exchange, are not the main target audience of trading bots. Trader bot will not be needed either, if you plan to hold the currency for a long time.
If you have knowledge of trading strategies and a sound judgment, then a trading bot can be a useful tool for monitoring and making profit from a volatile market.