Cryptocurrency markets are famous for their volatility, which presents a lot of opportunities for traders. Crypto trading bots are designed to leverage these opportunities better than a human could alone.
Trading bots do this by using software to automate trades based on predefined strategies.
They can operate 24/7, copy other traders' strategies and generally execute trades much faster than a person could.
Choosing the best crypto trading bot for yourself requires careful consideration of various factors, such as the bot's features, strategies, security, ease of use and the reputation of its developer. You should also consider the bot's user community, who are often able to share strategies and help you troubleshoot any issues you run into.
Despite their advantages, crypto trading bots aren't a set-and-forget tool to get rich quick.
They need to be monitored regularly and require an understanding of financial markets and trading before you get started. You will need to adjust which strategies you apply based on market conditions.
This guide serves as a general overview only and you should familiarise yourself with the risks before choosing a bot.
There are 3 main types of trading bots that are covered in this review:
Binance Cryptocurrency Trading Bot
Binance is the world's largest exchange by trading volume and now has a number of bots that you can use to automate your trading.
You choose from 8 predefined strategies or search the bot marketplace for custom strategies programmed by other users. You can then copy or modify these to use yourself.
The Bot Marketplace lets you search for strategies based on your desired market pair (e.g. BTC/USDT) and gives you an overview of the bot's features, ROI and how long it has been active for.
There's a Strategy Academy which is a learning hub for all things bot related and a good place for anyone unfamiliar with bots to start learning.
Pionex Cryptocurrency Trading Bot
Pionex is unique in that it is an exchange tailored around its 16 built-in trading bots. These are available to all users for free and integrate with each part of the exchange.
You can trade over 370 cryptos with classic strategies, plus a number of advanced grid trading strategies and order types.
The exchange taps into liquidity from Binance and Huobi, which helps ensure your bot will operate smoothly and not compete only against other bots.
Surprisingly, there is no simple marketplace for buying and selling bots. Instead, you can only use a ChatGPT-powered marketplace, which is for customising bots more complicated than marketplaces on other exchanges.
Pionex curates a feed of top-performing bots that you can copy in each market, but there's no way to search for them.
KuCoin Cryptocurrency Trading Bot
KuCoin provides 6 pre-programmed bots for trading on its exchange.
You will find common strategies like grid, rebalancing, dollar-cost averaging (DCA) and martingale. These can be tailored to your liking.
There is a marketplace that lets you view other users strategies and copy or adjust them to suit your own needs.
You can access the trading bots via the smartphone app, as well as the desktop exchange.
Bybit Cryptocurrency Trading Bot
Bybit offers 3 trading bots for use on its exchange. There is a spot grid, futures grid and DCA bot.
You can adjust the settings within each of these bots to fine-tune your strategy.
There's also a bot marketplace that lets you copy the settings of other traders.
The marketplace interface is very clean and the easiest to navigate of any exchange bot I've reviewed. You can see how long a bot has been in operation for, how many other traders are copying it and its historic P&L.
eToro Cryptocurrency Trading Bot
eToro's copy trading feature allows you to view and mirror trades made by experienced investors.
It's a bit different from what would normally be considered a trading bot, but nevertheless, it automates your trading and deserves a mention.
Simply choose a trader you want to copy and then set your account to follow their trades.
You can stay up to date with what traders are thinking via a social media feed and various social features.
OKX Cryptocurrency Trading Bot
The OKX trading bots are pre-built bots that help you automate your trading on the OKX exchange.
There are 10 trading bots to choose from, including grid, DCA, arbitrage and slicing strategies.
Some of these bots execute one-time orders and are a bit more similar to advanced order types.
The grid trading bots support AI trading strategies which have been backtested on market data. This can be useful for anyone unsure how to program a bot themselves – provided you're willing to trust your funds with the AI.
There is a bot marketplace for you to inspect the strategies of other traders and copy or modify them for your own use.
Cryptohopper Cryptocurrency Trading Bot
Cryptohopper is a cloud-based trading platform with a wide range of bots and sophisticated trading tools. Features range from beginner-oriented right up to advanced.
In addition to the usual tools and features you would expect with a trading bot, Cryptohopper comes with some advanced features, including social trading signals, third-party signals and API support, copy trading, backtesting and AI integrations.
It also supports an advanced marketplace where you can buy or sell templates, strategies, signals and bots. There's a mix of free and paid products available.
You can integrate Cryptohopper natively with 19 exchanges including majors like Binance, Kraken, Coinbase Advanced, OKX and Bybit.
There is extensive documentation, a learning academy, video tutorials and a help desk with live customer support via web chat.
Cryptohopper strategies are supported by AI, which can advise you on which strategy to use depending on market conditions.
3Commas Cryptocurrency Trading Bot
3Commas is a cloud-based platform that provides 21 pre-programmed trading bots, which can tap into 14 cryptocurrency exchanges. Most of the bots are tailored to specific exchanges, rather than strategies.
There is even support for DeFi on Ethereum, which is a notable difference between it and other bots.
It supports signals from TradingView as well as from third parties which can be purchased on the signals marketplace. These include free and paid options and some are tailored to specific exchanges.
The platform appears best suited to traders who already have an idea of what strategies they want to implement and how they want to program their bot. That is, it's better suited to experienced traders than beginners.
TradeSanta Cryptocurrency Trading Bot
TradeSanta is a cloud-based platform that you can use to manage trading bots across 9 exchanges. You can manage multiple bots via a single trading terminal.
Pricing tiers are a bit more expensive than some competitors, with key features like TradingView signals being locked behind the medium tier. Without that, there are only 3 signals available – MACD, RSI and Bollinger.
On the upside, you can operate a larger number of bots than some competitors offer, but overall value for money appears to be lacking.
There is a demo mode that gives you access to the entry-level tier.
Like most bots, you can buy and sell strategies on the marketplace, and these are bound to specific exchanges.
The user interface is simplified and easy to navigate.
Telegram trading bots are high-risk trading bots that operate entirely within the Telegram chat app. They automate trading on decentralised exchanges. In particular, they are used to snipe DEX listings and automate certain trading activities faster than a human could.
Both Maestro and Unibot, the two largest Telegram trading bots were recently hacked. For this reason, we have chosen to remove them from our list until they demonstrate they are safe for use.
Why Telegram Trading Bots are crypto's latest obsession.
Telegram trading bots come with unique risks that other bots may not. They require access to your wallet's private keys which is required for them to rapidly sign transactions on your behalf.
This makes the bot a honeypot for hackers, who would get access to millions of dollars of funds if they successfully hack the platform. It also requires trust in the bot's developers, who are often anonymous.
To mitigate your risks when using a Telegram bot, use a fresh address and only deposit an amount you can afford to lose, with the understanding that all funds could easily be lost.
Any profits should be immediately sent to a separate address that only you know the private keys to.
Trading bots are computer programs that log in to cryptocurrency exchanges and automatically make trades on your behalf.
How good they are depends on how they're programmed and how suitable their trading strategy is to current market conditions.
There are many different kinds of bots to suit different market conditions and individual needs.
For example, "scalping" is a strategy for making small but consistent profits in a sideways market. A scalping bot would be designed to automatically place the trades required to shave those profits out of the market. Scalping could be the right strategy for a sideways market, but wouldn't be ideal in a more bullish or bearish situation.
So the first challenge is to know which kind of strategy to use at different times. The second challenge is to find a bot that can effectively execute that strategy based on market activity and signals.
In crypto trading bot terminology, signals are like alarms. For example, someone might craft a signal based on a combination of factors like moving averages, volatility and social media mentions. When those factors move in a way that's believed to indicate a good time to trade, the alarm is triggered.
Trading bots can be programmed to automatically respond in specific ways to these signals. You can create your own signals or use a third party's signals. And just like bots themselves, some signals are more consistently accurate, while others are more error-prone.
Crypto trading bots can be used to implement a wide range of trading strategies. Some of the most commonly used strategies include:
Cryptocurrency arbitrage is a strategy that allows you to take advantage of price differences between crypto exchanges. For example, buying Bitcoin on an exchange where the price is low and immediately selling it on an exchange where the price is at a higher level.
Specialist crypto arbitrage bots are designed to track price movements and differences across exchanges and then execute the necessary trades.
Grid trading automates buying and selling of crypto at preset intervals, within preset price ranges. When used on the spot market, its goal is to frequently buy low and sell high by taking advantage of market volatility.
It does this by making a series of small purchases while the market is trending down. It then aims to make a series of small sales if the market rises again.
This is similar to scalping but can be done on longer time horizons and with larger purchases.
This strategy involves programming a bot to identify the price trends of specific cryptocurrencies and then execute trades based on those trends. By analysing which way the price of an asset is moving, this strategy is designed to assess when trends are forming and then profit from the resulting price change. In other words, buy when prices are trending upwards and sell when they're heading down.
The key underlying principle of the mean reversion strategy is that there is a stable trend in the price of a particular cryptocurrency. So while the price may fluctuate in either direction, it will eventually return to its mean.
Based on this assumption, you can program a bot to execute trades depending on where the price of the currency sits in relation to its historical average.
Bots are not free money machines and they're not without some risks and downsides:
Trading bots can offer the allure of automated, emotion-free trading, but they come with their own set of risks. One of the primary concerns is that bots are only as good as their programming and the strategies they employ. If the bot is poorly designed or relies on flawed algorithms, it can result in significant financial losses. Additionally, bots can't adapt to market conditions as intuitively as a human can, making them susceptible to unexpected market events or trends.
Damian Chmiel
Senior Analyst & Editor, Finance Magnates
Automated trading generates a lot of transaction costs and tax liability, without necessarily creating alpha.
Lex Sokolin
Managing Partner, Generative Ventures
The majority of bots are not intelligent, regardless of whether they trade crypto, stocks, forex or commodities. Bots cannot read newspapers or watch TV, so they would have been buying 'cheap' airline stocks on 9/11, without knowing why. No bot will ever be as clever as the human mind, so learn to trade, or find a qualified licensed broker to do it for you.
Jeremy Britton
CFO, Boston Trading
Market dynamics tend to get erratic, especially in the closing candle of volatile days, potentially triggering frequent stop-loss activations. Often trading bots used by retail investors are being front-run by professional traders, reducing the opportunity for success. Hence, consistent research, vigilance and monitoring are highly recommended in such situations.
Ben Ritchie
Managing Director, Digital Capital Managment
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