What Are Crypto Trading Bots And Knowing The Risks Of What They Do

What Are Crypto Trading Bots And Knowing The Risks Of What They Do

What Are Crypto Trading Bots?

Trading bots are special programs that are using complex indicators to analyze the condition of the market, predict its next move, and execute trades. Software like this has been used for a while now, but the bots used by private investors started appearing relatively recently.

Even so, they continue to evolve at all times, and their functionality and sophistication are constantly increasing. New ones are appearing all the time, and there are dozens of them on the market right now, waiting to be used. They can be free, or subscription-based. Such bots can even be quite expensive and are often used by professional traders. Still, they are all usable, and can even be quite profitable. Because of this, we will now list some of the best ones, but also cover the risks of using such tools.

3Commas is a popular bot that allows its users to trade on multiple exchanges automatically. It supports BitFinex, Bittrex, Bitstamp, Binance, GDAX, KuCoin, Poloniex, YoBit, Huobi, and Cryptopia. Additionally, it is very easy to use and navigate, and users can see all of their trades, and have access to additional features, like trailing stop losses, copy trading, automated mean-reversion trades, and alike. Finally, its traders can set up a model portfolio, analyze it and test it, so that their portfolio composition would be perfected. Its price can be anywhere from $30 to $100, depending on the number of features.

Next, we have Auton.io, which is a new bot that claims to be the first completely decentralized trading app, powered by AI. It is also easy to install and can be useful to amateurs and professionals alike. It uses a number of technical indicators to notify its user of the current situation. Through trade signals, its user knows exactly when to use it for automatically executed trading. It is a subscription-based bot, and the cost of using it is $50 per month.

Cryptohopper is a crypto trading bot based on the cloud technology. This means that it can keep trading even if your computer is turned off. Traders who have experience can use a manual approach, and use technical indicators for configuring the bot. Additionally, the bot also has external signalers, which can allow new traders to let their bot do the work itself, as per recommendations from trusted third-party sources. The bot offers a wide variety of other features, and the price of subscription can go anywhere from $19 to $99, depending on how many features the user wants.

CryptoTrader is another platform based on the cloud, and it allows users to go a step further, and create their own bots. The platform’s software works with numerous exchanges, but also with many different currencies. Not only that, but the platform also provides an entire marketplace for users to sell trading strategies of their own making. The price of this bot can be paid in Bitcoin, and it costs anywhere from 0.0026 BTC to 0.0316 BTC on a monthly basis. The platform also accepts Litecoin.

Gekko is an open-source bot that specializes in BTC trading and can be found on Github. Users can use this bot for executing some basic trading strategies, and they even have access to some pretty useful features. These include viewing prices of coins in real time, executing live orders, simulating markets, calculating indicators, and alike. Compared to our previous entries, its functionality is somewhat limited. Still, the bot continues to be useful, and it’s also completely free.

Haasbot is most likely the most popular trading bot that you can find. It provides a chart pattern recognition, and it lets traders combine this with other trading signals. That way, the trader can get a better display of the market situation, and make better investing decisions. The bot also supports a long list of big exchanges, and it can be customized regarding the timing of automatically executed trades. Its price goes from 0.073 BTC to 0.127 BTC for an annual license.

Gunbot has a pretty wide range of different specifications and settings that are useful to professionals and novices alike. A lot of exchanges allow the use of this bot, and its community has grown quite a bit since its release. Best of all, you can buy a lifetime license for a price ranging between 0.035 and 0.16 5 BTC.

Finally, the last on the list is ZenBot. This is also an open-source bot that you can find on GitHub. It is completely free, and anyone with the proper knowledge can modify its code to suit their own purpose. The bot works with a lot of cryptos and can execute multiple trading strategies based on a technical analysis. It has a wide variety of features, but it is recommended not to use it for trading large amounts.

While there are numerous benefits of using trading bots, users should remember that there are some risks involved as well. After all, you are giving the control over your money to a third party. Trading bots are still a new technology that has yet to develop. Not only that, but they work with cryptos, which are only a few years older tech than the bots themselves.

One of the biggest risks involves flawed software. Not all of the bots are of equal quality, and bad coding can make a lot of damage. If you decide to trade large amounts through the bot, the risks are that much bigger. Of course, flawed software is not a purposeful defect, but it can cost you a lot of you use a bot that has it.

There are also Flash crashes that you should watch out for, as you can experience quite heavy losses if you fail to set stop-loss limits. Flash crashes can be quite often, and it is highly advisable to be on a lookout for such occurrences.

Finally, we should not forget about scams. Scammers are a curious breed, and they evolve with technology and market. As soon as trading bots emerged, scammers figured out how to use them to their advantage. They started creating fake trading bots that the traders would start using, give them their money, never to see it again.

One More Thing To Remember

One last thing to remember regarding the trading bots is that they are, and should be seen and used as, tools. They are not a passive income solution that will make a profit for you while you’re doing something else. Of course, you can set up specific parameters on some of them, and have your trading somewhat secured. However, the market is growing and changing all the time, and your parameters need to follow these changes.

Because of that, you cannot just set up a bot and forget about it. They still require your supervision, and often even interference. The right strategy is also important, and if you do things right, then the trading bots can turn out to be quite profitable tools. If you don’t — expect some serious losses.

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