The popularization of crypto trading, just like with anything in the modern world, has led to a lot of innovation in that area. Over the last 2 years the crypto market has experienced a surge in the number of crypto trading platforms that employ bots and bot-driven trading strategies.
What is a Trading Bot?
Most people who are familiar with cryptocurrency trading have at least heard of trading bots, but not everyone actually knows what their purpose or how to use them to their full potential. So to make things clear for everyone, let’s give “trading bots” a rough definition.
Trading bots are programs that apply certain trading algorithms and scripts to analyze and recognize trends in the market. The use of an API allows them to interact with your exchange account and, as a result, to execute profitable trades on your behalf. This is quite similar to foreign exchanges that employ automated trading systems, except in this case you’re trading cryptocurrencies.
When should you use Crypto trading bots?
Now that we’ve explained what trading bots are, why don’t we talk about their use cases? Some common features that most trading bots share include backtesting which allows you to test your bot using previous historical data, strategy implementation which is basically the algorithm your bot uses, as well as a job scheduler to execute timely trades. As you can see, crypto trading bots have many features, but they are most helpful when dealing with menial tasks, such as portfolio management and index construction. This way you can forget about certain repetitive aspects of trading and focus on the truly important parts. Additionally, you can create a 24/7 trading strategy that basically does all the trading for you. This means you can sleep soundly and not have to worry about missing a profitable trade at night or when you’re busy.
Pros and cons of using trading bots
Trading bots come packed full of helpful features. Let’s take a look at some of the advantages of using one.
As mentioned previously, trading bots allow you to create a set it and forget it a strategy that will monitor the market data and execute appropriate trades every day of the week. You can also have the bots notify you of any changes in the market, as well as the latest stats if you prefer a bit more of a hands-on experience, having the bot handle only the repetitive tasks.
Another advantage is the lack of psychological aspect. Bots aren’t affected by emotions like humans are, the only thing they are driven by are algorithms and the strategies you set up. As such, they won’t make hasty or questionable decisions just because of a previous trade.
Additionally, using trading bots is a good way to learn about the trading process and the crypto market as a whole. Just like a bot analyzes the market, the trader can analyze the bot’s trades to improve himself as well.
As you can see, there are a lot of advantages to using trading bots, but, of course, that doesn’t mean that they come without any disadvantages.
The most important thing to watch out for when picking out a bot are scam bots. These are basically malicious bots that take advantage of your tokens once you give them access to your APIs. They can both move your funds around, as well as take them out altogether. That’s why you should look for bots with good reviews and high ratings, otherwise, you run the risk of being exploited.
Another thing worth noting is, if you are a novice casual trader looking to make a quick buck by buying and holding a cryptocurrency, it might be better to avoid trading bots for the time being, as not being experienced with them and the way they work may lead to problems ranging from not using the bots to their full potential to actual loss of funds.
Top Crypto Trading Bots Review
Now that we’re done describing the ins and outs of trading bots, it’s time to move on to reviewing the top Crypto trading bot platforms.
Here is our list of the top 5 best crypto trading bots:
1. Wunderbit Trading
5. Trade Santa
This up-and-coming platform has been steadily growing in the trading bot platform community. Its goal is to ensure a seamless experience for its traders, both novice and experienced.
The interface is user friendly and intuitive while managing not to be overly simplistic. The major selling point of this platform, though, is the plethora of useful features, the main one being copy trading.
Upon registering, you will be given a choice of being either an investor or a trader. Traders have the ability to not only trade, but also to have investors commission you to manage their investments while registering as an investor lets you follow traders and copy their trading strategies for a commission that will be deducted from successful trades only. This allows the user to choose, whether they prefer a more hands-on trading approach or letting someone more experienced do the trading for you.
Apart from this, Wunderbit Trading also offers multiple account management, easy to create bots with step by step guides and in-depth tutorials, simultaneous Take Profit and Stop Loss targets, swing trades and trailing stops, as well as an already sizable list of exchanges with many more to come in the future.
Two unique features that distinguish Wunderbit from similar services are an easy integration with TradingView and its Spread-trading terminal. Wunderbit Trading helps users to automate any TradingView scripts into a fully functioning crypto trading bot. With easy to use automated trading software you can construct and adjust any crypto bot in a matter of seconds.
The Spread-trading terminal allows users to select which assets they would like to use for creating a spread and will execute the buy and sell orders for the chosen pairs simultaneously. Applying spread trading to crypto futures will automatically reduce the overall volatility and at the same time limits a trader’s risk in the event of an unexpected market crash.
3commas has established itself in the market as a highly popular smart trading platform that focuses quite a bit on user experience and satisfaction, boasting a large portfolio of features and tools.
The main features of the platform include simple yet effective trading bots with both long and short algorithms, as well as the ability to copy other bots, various portfolio management tools, and, something that sets it apart from a good portion of other trading bot platforms, their Smart Trade terminal. This terminal combines a large number of useful features into a neatly presented package. The most prominent ones include the ability to sell your coins at multiple prices, a Take Profit and Stop Loss trailing feature that allows you to adjust the coin price according to the market’s fluctuations, and many others.
The platform also has its own mobile platform which makes trading on the go that much easier.
The platform does not offer a free package, though they do have a free 3-day access trial for their bot, so you can try it out first and then decide whether it’s worth your money.
Cryptohopper is not just one of the most popular could-based trading bot, but one of the most popular trading bot period, with a following of over 200,000 users.
The platform offers quite a few useful features, such as backtesting, mirror trading that uses signals from analysts to execute orders, Trailing Stop Loss, Stop Buy and Stop Short, as well as a Papertrading feature, which you can use to trade without owning any cryptocurrencies or an exchange account and, as such, without any risk of losing your funds. What caught our eye, though, was their Strategy Designer, which allows you to simply drag and drop technical indicators unto a strategy, without having to input any manual code.
This platform is friendly even for traders with a complete lack experience in creating their own trading strategy, as it offers a wide range of pre-existing strategies, signals and templates that you can obtain for free or buy on the platform’s marketplace.
Just like the previous contender on our list, Cryptohopper offers a mobile application and a free trial period, this time a week-long one, before requiring you to pay for their services.
Zignaly is another cloud-based service, which means no installs or manual updates needed, though it is a little less known than its previously mentioned competitors due to being released not too long ago. This doesn’t mean that it should be disregarded as some average platform, though.
The platform offers fairly high customizability and ease of use, as well as a detailed explanation for every feature.
The main features of the platform include access to crypto signals from multiple reputable signal providers, Papertrading accounts, Trailing Stop Loss, TradingView Bots, which allows traders to send signals from TradingView with the use of indicators or based on their personal recommendations.
The choice of available exchanges isn’t massive, but they are planning on adding more in the future. As for the price, unlike the previous two platforms on this list, Zignaly is free to use and doesn’t take any fees from your trades, which is great for people unwilling to pay for trading bots.
The final entry on our list is Trade Santa, which is yet another cloud-based trading platform, except this one might be more suited for users that would prefer to employ a set it and forget it strategy when trading.
The bot is simple to set up and takes almost no time at all. The long and short strategy feature paired with the utilization of technical indicators will help the bot determine the right exit and entry points and properly capitalize on the market no matter its state. Furthermore, the Grid and DCA bots will place additional orders to minimize any possible losses and help automate your trading process even more. Other features include extra orders, Stop Loss, and buying coins for a commission.
That being said, there are services that offer some of Trade Santa’s features, such as the Grid and DCA bots, for free, so, just like with any other bot, it’s important to evaluate whether what you’re paying for is truly needed in your case.
The platform also offers a mobile app and, similarly to the second entry, a free 3-day trial followed by the requirement to pay for one of the three offered plans.
To summarize, there are plenty of trading bot platforms nowadays that can help you to either organize your crypto trading life better or automate it completely. All of them have their own special features that they use to set themselves apart from the rest. It is up to the user to choose the one most suited for his needs. However, we would recommend starting with Wunderbit Trading. They are extremely competitive in terms of prices and have easy to use bot integration.