A complete guide for beginners on Bitcoin trading bots

Bitcoin trading bot

I’d like to share my experience with zenbot (over 1 year of playing, testing, and trading)
It’s been over a year since I found zenbot. Back then carlos8f had created it and was running it.

I had dabbled in trading before but never automated it. So this was all new to me. In reading the readme file on the first thing I thought was going to be an issue is that people were showing losses in live trading. You see, first thing I thought was this was going to be a sure fire way of making money. But in seeing post about losses, I now had doubts. And that is what saved me, or what saved what little crypto I had.

I quickly came to the realization that this thing wouldn’t be popular if it wasn’t working to an extent. So, I learned what I could about it, at least what I needed. I did what I tell people on this subreddit all the time, I ran sims. Over and over and over, changing options, little bit at a time. Different strategies, different trading pairs, etc. I probably have done around 25,000 simulations using all sorts of variables.

I found good strategies with the right options for the right exchange and trading pairs. Now, I’ve been live trading for almost 4 months now. Not with a lot, but around $150 worth (market price when I started live trading). I am NOT making a lot of money at this, but I am making money … sort of.

Let me explain.

I was watching the markets while trading (paper and live), it drove me nuts. It was constantly changing (obviously). I gain a little, get excited, and then it would lose. I’d restart zenbot over and over trying to find a good point to start it. I ended up losing about a 1/3 of what I had on the exchange. I continued testing and learning. But then something hit me.

With the market fluctuations and volatility, making money (actual/fiat $) is not the point. The point of trading gain crypto. You see, if you disregard the value of the crypto, and just take in the amount of crypto gained, you win.

You get that? Do not take in account the value of the crypto. Just work on gaining more of it. If you are letting zenbot go on it’s own or if you are just using it as another tool along side charts, it doesn’t matter. Just get more cryptocurrency. The value is something that you will regret watching.

That’s it, that’s my advice. It’s a mental thing, I know, but it works. If you work on getting more crypto, then when the price shoots up, then you have more you can sell.

Unlike the stock markets, the cryptocurrency market never closes and never sleeps, which can be a highly stressful scenario for traders and even casual investors in the industry. Users familiar with crypto investment will also be familiar with the (joyful or sinking) feeling of waking up in the morning to be greeted by a pleasant or unpleasant surprise when they check their portfolio and see large gains or losses.

As a result of the volatility of the market, trading bots have become increasingly popular among traders by allowing them to remain in control of their trading at all times, with the bot not sleeping even while the trader is. In addition, a correctly specified bot allows trades to be executed faster and more efficiently than the trader would be able to do manually.

Bitcoin Trading Bots

The explosion of popularity in cryptocurrency has also resulted in a big increase in the number of crypto trading bots available, either for free from open-source platforms or licensed to users in exchange for flat fees. However, it is difficult to ascertain which of them work as intended and which of them are an absolute waste of time. This post will consider the background to what exactly trading bots are and whether they work for Bitcoin trading (and more importantly, for your Bitcoin trading). It will then consider some of the best trading bots in the market today.

What are Trading Bots?

In essence, a trading bot is a software program that interacts directly with financial exchanges (often using API’s to obtain and interpret relevant information) and places buy or sell orders on your behalf depending on the interpretation of the market data. The bots make these decisions by monitoring the market’s price movement and reacting according to a set of predefined and pre-programmed rules. Typically, a trading bot will analyze market actions, such as volume, orders, price, and time, although they can generally be programmed to suit your own tastes and preferences.

Trading Bot Strategy

Trading bots have been popular for many years in various conventional financial markets. However, trading bots have not been traditionally available to the average investor as they cost a significant amount of money. For example, a Bloomberg terminal can often cost in excess of $10k. However, due to the transparent nature of blockchain, cryptocurrency exchanges tend to grant their customers direct market access that provides users with the opportunity to analyze the exchange’s electronic order book, which was a type of access that was traditionally exclusively available to brokers and investment houses in conventional financial markets.

With many people trading Bitcoin passively and therefore unable to dedicate large amounts of time to analyze the market, the intention is that Bitcoin bots will allow users to establish more efficient trading without having to keep on top of the market at all times.

Types of Trading Bot Strategies

Although the cryptocurrency market is much less mature than other financial markets, the digital nature of the market has meant that despite the fact that it has had significantly less time to integrate algorithmic trading, the technology has not been slow in catching up on its rivals in terms of providing a trading bot service, allowing for investors to obtain access to a wide range of trading strategies, some of the most popular of which are considered below:

Arbitrage

In the early days of cryptocurrency trading one of the primary strategies that traders used to make profits was arbitrage – i.e. buying assets in one market and then selling them in another for a higher price, thus earning profit on the difference. As cryptocurrency exchanges were decentralized, there were often large differentials between prices offered on various exchanges, meaning that profits could be made through arbitrage.

Although the spread between exchanges are much smaller now, they do still appear from time to time and trading bots can assist users in making the most of these differentials. In addition, arbitrage can also be utilized in traders looking to involve futures contracts in their trading strategies by benefiting from any difference that exists between a futures contract and its underlying asset, by considering futures contracts that are traded on various different exchanges.

Market Making

Trading bots can also allow investors to use the market making strategy. This strategy provides for “continuous buy and sell prices on a variety of spot digital currencies and digital currency derivatives contracts” in an effort to “capture the spread between the buy and sell price”.

In order to carry out the market making strategies, in involves making both buy and sell limit orders near the existing market place. As prices fluctuate, the trading bot will automatically and continuously place limit orders in order to profit from the spread.

Although this may be profitable at certain periods, the intense competition around this strategy can result in it being unprofitable, especially in low liquidity environments.

Do Trading Bots Work?

Trading bots work by reacting to the market. It gathers the data it needs in order to execute a trade based on analysis of the trading platform. However, with cryptocurrency, the trading platform only tells half of the story, with many rises and falls being based on other sources (such as John McAfee’s Twitter or other online rumors!) that cannot be programmed into the bot for analysis. In addition, as noted above, the spread between the exchanges has flattened somewhat, meaning that the opportunities for inter-exchange arbitrage are much lower than in previous years.

Many trading bots use what is known as an exponential moving average (EMA) as a starting point for analyzing the market. EMA’s track market prices over a set time period, and bots can be programmed to react to what that price does – such as moving beyond certain thresholds. By programming the bots, traders can set their thresholds to correspond with their risk appetites. However, one of the downsides of EMA is that it is based on past history, which, as all traders will know, is not indicative of future performance, especially in the cryptocurrency industry where volatility is rife.

Therefore the question of whether trading bots work is a multi-faceted one in which the problem answer is that they work, but not necessarily for everybody. Trading bots offer a variety of advantages, including having constant interaction with the market, as well as the not-insubstantial factor of removing the emotion from trading. However, on the other hand, by using the wrong trading strategy or relying on the trading strategy of others, a trading bot could simply end up automating a set of poor market trading decisions.

Best Crypto Trading Bots

In this section we will take a look at some of the popular and publicly-available bots you can use.

CommasStar Icon

Commas is a popular trading bot which works with a number of exchanges including Bittrex, BitFinex, Binance, Bitstamp, KuCoin, Poloniex, GDAX, Cryptopia, Huobi and YOBIT. The bot works 24 / / 7 with any device as it is a web-based service so you can monitor your trading dashboard on mobile as well as desktop and laptop computers. It allows you to set stop-loss and take-profit targets and also has a social trading aspect which allows you to copy the actions of it’s most successful traders.

Commas Trading Bot

Another interesting feature is it’s ETF-Like crypto portfolio feature which allows you to Create, analyze and back-test a crypto portfolio and Choose from the best performing portfolios created by others.

We have completed an Indepth Review of 3commas here.

Visit 3Commas

Cryptohopper
Cryptohopper is one of the most established players in the auto trading scene for several reasons. Firstly, they run entirely on the cloud, so no installation is required making 24/h trading possible. They also have an incredibly intuitive dashboard, and only require a 5 minute set up to start trading.

Cryptohopper Dashboard

Next to this they are the only bot to embed external signalers, allowing new traders to subscribe to a growing list of professional analysts from around the world. Many use machine learning, intelligent algorithms and employ teams of mathematicians to target rising coins. Signals are sent directly to the users bots which buy and sell when they receive them.

Signal s Dashboard

Signaler dashboard where you can subscribe

The bot allows you to take advantage of bull markets with a trailing stop-loss, and has full technical analysis features from Stoch and RSI to Bollinger Bands and MACD.

Cryptohopper has a very nice modern dashboard area where you can configure and monitor everything and comes with a config wizard or pre-created templates for the popular exchanges – Binance, Bittrex, Poloniex, GDAX and Kraken.

Cryptohopper Dashboard

Traders with more experience can incorporate their favorite technical indicators, triggers and use tools that are handy in bear markets, such as DCA & shorting features.

Unlike many other bots, Cryptohopper does not charge any trading fees, and is one of the few bots to offer a free trial for a month with the ability to upgrade to Bunny ($19 p/m), Hare ($49 p/m) and Kangaroo ($99 p/m).

We have completed an Indepth Review of Cryptohopper here.

Visit Cryptohopper

CryptoTrader
The CryptoTrader bot is a cloud based trading bot that provides users with fully automated trading solutions while not requiring them to install the bot on their own system. CryptoTrader features a strategies ‘marketplace’ that allows users to buy their favorite trading strategy, or alternatively to sell strategies developed by themselves. Cryptotrader supports most of the major exchanges for both backtesting and live trading, with the backtesting tool allowing users to review how their strategies would work under different market conditions.

Cryptotrader

CryptoTrader offers five different subscription plans, with fees ranging from 0.006 BTC to 0.087 BTC per month (Bitcoin is the only payment method accepted). The separate packages include a number of differences, including the number of bots operating on the user’s behalf as well as the maximum equity limit. Although though some knowledge of coding is beneficial when setting up strategies in the CryptoTrader bot, there are a number of free and paid strategies available for users that are not experienced / interested in coding.

The CryptoTrader bot also has a wide level of interoperability, with the service offering email and text notifications to alert users on important market events or changes in trends.

Visit CryptoTrader

GunBot
GunBot is a well known cryptocurrency trading bot which uses individual strategies that are completely customisable to fit your trading style. It can operate on the following exchanges: Bittrex, Binance, Poloniex, Bitfinex, Cex.io, GDAX, Kraken and Cryptopia. You can run the bot on your own computer or use a VPS and can manually add different coin pairs, pick a strategy and set it to work.

GunBot

Visit GunBot

BTCRobot
BTCRobot was one of the early innovations in the Bitcoin trading bot market. Unlike some of the other options, BTCRobot is not free, with licence plans ranging from $149 to $498 depending on requirements, which allows users to either download the program or use the cloud servers (with Mac downloads costing slightly more than Windows).

BTC Robot

Commentators have suggested that the platform is easy to use and works effectively as it is intended. However, it would appear that the profits being made by traders from the tool are modest and it would appear that it is probably only worthwhile investing in this tool if you are intending to invest heavily in it, both in terms of the funds that the bot will operate with, as well as the time to correctly understand how it works.

The developers themselves note that the bot is unable to perfectly predict the cryptocurrency markets (which is not a surprise, considering the number and range of variables in the cryptocurrency markets). Therefore, users should be willing to accept that there will be a range of losing trades, as well as winners. However, with a package that includes a 60-day refund policy, BTCRobot offers users a chance to try out the trading bot to see if it is a good fit with their trading strategy without worrying about the financial outlay.

Visit BTCRobot

Gekko
Gekko is an open-source trading bot and backtesting platform that supports 18 different Bitcoin exchanges. Gekko is entirely free and can be found on the GitHub platform. Gekko is a relatively straightforward trading app to use that includes an interface and basic strategies from the outset, which allows you to be more comfortable with the use of the bot.

Gekko

Gekko also has a number of plugins available that will allow you to be updated regardless of what level of connectivity you have. Although Gekko is not a high-frequency trading bot (making only a couple of trades per week, depending on configuration), nor a bot which allows you to exploit arbitrage opportunities, its list of supported exchanges and basic strategies means that it is probably a good place to start for anybody interested in utilizing Bitcoin trading bots.

Visit Gekko

Zenbot
Similar to Gekko, Zenbot is also an open-source trading bot for Bitcoin traders. As an open-source project, Zenbot is available for users to download and modify the code as necessary.

Zenbot

However, there have been question marks in the community over the development of Zenbot, with no updates having been made to the platform for a significant number of months. This means that no additional exchanges have been added to the platform for almost one year, meaning that it may have access to less information than some of its competitors. However, on the positive side, Zenbot, unlike Gekko, does offer high-frequency trading as well as supporting multiple cryptocurrencies in addition to Bitcoin.

Visit Zenbot

Haasbot
Created in 2014 by Haasonline, Haasbot trades Bitcoin and many other altcoins, Although Haasbot is probably the most complete of the trading bots that are currently available, doing much of the labour with relatively minimal input required from the user, in order to provide this service it is pretty expensive, with costs ranging from between 0.12 BTC and 0.32 BTC for a three-month period.

Haasbot

At those prices, it is clear that anybody willing to take a chance on it should be knowledgeable about what they expect to get out of the platform and be committed to doing so.

Visit Haasbot

Conclusion
Trading bots can assist traders in ensuring that they are always interacting with the market, even when they are physically unable to do so. They can assist in removing some of the stress and emotions that are often found in any financial trading markets, not least the cryptocurrency market. However, trading bots are not for everybody, nor does everybody need one. Casual investors are not the prime target of trading bots, and if your intention is to buy and hold Bitcoin then a trading bot is probably not the correct investment for you. In addition, if you are not a competent programmer or familiar with the creation of financial strategies, trading bots may also not be for you. However, if you have the requisite knowledge and ability to overcome these obstacles then a trading bot can be a worthwhile tool in monitoring and making gains from the Bitcoin market.

Forex trading can be a very lucrative and rewarding business. It can also take you down a ruinous financial journey for which you can deeply regret. The difference lies is the mix of skills in this otherwise nerve wracking activity. Being a successful forex trader requires great skill and experience. It is estimated that 95% of forex traders lose their money. That’s just how brutal the sector is. Enter forex trading robots. With advances in technology, pretty much anyone can participate in forex trading and make a profit while at it. Robots are getting better at analysing the markets and making the best trades.

What is a Bitcoin Trading Bot?
Crypto trading bots are algorithms specifically programmed to read trends and execute winning trades in the cryptocurrency market. They interact directly with exchanges like Coinbase through an API, interpret the data and places buy or sell orders. Basically, crypto bots react to market data according to certain pre-programmed rules. Orders, volume, price and time are just some of the parameters monitored by trading bots. Bots are not new. They have been in use for some time for example in equities. Even then, they have for a long time been a preserve for corporations and the rich. From simple electronic order books, bots made their way into forex trading and are now very much part of crypto trading. Bots are becoming much more cheaper and sophisticated by the day. And they are now more or less universally accessible. Trading robots like the Bloomberg terminal are still very pricy at about $10,000. Luckily, the blockchain technology has opened up the market. It is not uncommon to find completely free and capable bots on offer. We look at a few of them and evaluate their capabilities below.

Gekko review

Gekko trading bot is one of the many crypto bots now available in the market. This is an entry level open source trading bot that can aggregate live data, price data, calculate indicators and execute trades. It can also backtest trading strategies using live data. Gekko is basically an entry level trading bot for people who are just learning and experimenting on different strategies. Its functionalities are very limited compared to others already in the market. It does allow users to take advantage of arbitrage opportunities. This is not a high frequency trading bot either but a good place to start for people trying out bitcoin trading bots for the very first time.

Zenbot review

Zenbot is also an open source trading software. This means it can be downloaded for free on Github and modified. One advantage with Zenbot is that it supports multiple currencies. The general strategy is based on technical analysis of the markets with extensive backtesting, high frequency trading. A paper trading function for testing strategies in real time is also in place. Tests have however shown a discrepancy between live trading and paper trading. Users have reported making losses in live trading when in fact paper trading shows gains. The developer warns against putting in large amounts of capital into the bot. Updates to the platform can take several months meaning it is at a major disadvantage compared to other competitors. A good zenbot review reveals that it is not the best if you are looking at minimizing risk and making a profit. You definitely might want to think twice before deciding to choose zenbot for bitcoin trading.

So why Rofx is better than Gekko and Zenbot?

Unlike other markets, the cryptocurrency market never sleeps. This can be highly stressful for traders who need to always be in the know. They need to constantly see and interpret the markets and make that winning trade. But traders need to sleep sometimes. Which is why trading bots come in hand. Rofx.net is a fully automated trading robot. This means there is no need for any intervention from you. Rofx.net levels the ground for beginners and experts alike. If you are a beginner, you can start earning passive income from cryptocurrency trading right away while knowing close to nothing about trading. For experts, automated trading takes off the pressure of always having to stare at the charts all day. Robots can see an unlimited number of trading signals and execute buy and sell orders. Humans can’t simply match the speeds and will inevitably miss many opportunities to make profit.

Constant Profit

Rofx.net is one of the few trading robots that have proven themselves in the market. Rofx.net has been around for more than 9 years and getting better at making profits for its users. In 2017, customers made more than 100% profit. If you look at the charts, Rofx.net has been posting better results each coming year from about 88% per cent when it started out. The average profit per day is 0.38% or 10% every month. This is just about the best crypto trading bot ever made. Since it is automated, the robot can send signals to an unlimited number of trading accounts that are linked to it.

No charges

Unlike many other trading platforms, Rofx.net does not charge any fee for withdrawals. Withdrawal fees and other arbitrary charges place a very high burden on traders. The good news is that you can escape this yoke with Rofx.net trading robot.

No Losses
When you use Rofx.net, the developers assure you that you will make no losses. That might sound superfluous but it’s actually true. Of course the robot is not perfect. None is. There are a few days it will make a few losses. But the company maintains an reserve exactly to cover for such scenarios. It takes a high level of confidence in its systems for Rofx.net to provide such reassurance. Rofx.net places minimum risk trades and has a stop loss system that allows it to exit trades with minimal losses.

Powered by Artificial Intelligence
In the fast changing world, it takes more than an algorithm to turn in a profit. You need the constant input from trading experts. But artificial intelligence is one of the most important ingredient to a trading robot. Rofx.net has AI built into it to constantly learn and modify its strategies on the go.

Easy transfers and simple user interface
You can load your using Visa/MasterCard and bank transfer. You can also enjoy one-day bitcoin funding. Rofx.net comes with a simple, easy to use interface. Newbie will have not trouble navigating the high contrast and self explanatory site.

Best Bitcoin Trading Bot for Bitcoin
The combination of the clear advantages above easily makes Rofx.net the best bitcoin trading bot for bitcoin. The combination of automatic trading, artificial intelligence makes Rofx.net one of the most advanced bitcoin trading bots. With loss coverage, it is not difficult to see why this is the best bitcoin trading bot currently in the market.

There are a bunch of trading bots, however, most of them are developed for Bitcoin.

Here a list of the most popular.

HAASBOT

The Haasbot is somewhat popular among cryptocurrency enthusiasts. On paper, Haasbot does all of the trading legwork on behalf of the user, although some input is required. Haasbot supports all of the major exchanges and is capable of recognizing candlestick patterns.

TRADEWAVE

Although technically not a bot in the traditional sense, Tradewave is a platform allowing users to create automated bitcoin trading strategies. Users can connect most of the major exchanges to enable live trading within a few minutes. Moreover, there are quite a few trading strategies shared by community members for other users to try out. Tradewave is not free to use, though, as plans start at just US$14 per month.

ZENBOT

Another open-source solution for bitcoin traders goes by the name of Zenbot. Albeit this bot has not seen any major updates over the past few months, it is available to download and modify the code if needed. This marks the third iteration of Zenbot, which is still a lightweight and artificially intelligent bitcoin trading bot. It is also one of the very few solutions capable of high-frequency trading and supporting multiple assets at the same time. According to the GitHub page, Zenbot 3.5.15 makes a 1.531 ROI in just three months, which is quite surprising.

CRYPTOTRADER

One of the more attractive – yet unknown – solutions goes by the name of CryptoTrader. The service offers cryptocurrency users automated trading bots running on cloud platforms. Not having to install unknown software is a big plus, albeit it remains to be seen if this platform is legitimate. One intriguing feature is how CryptoTrader features a strategies marketplace where anyone can buy or sell their favorite trading strategy.

GEKKO

The Gekko trading bot is an open source software solution hat can be found on the GitHub platform. It was last updated a month ago, which seems to indicate it is still being actively developed. Using this automated trading bot seems rather straightforward, as it even comes with some basic strategies. It is not a high-frequency trading bot by any means, nor will it exploit arbitrage opportunities. With a good list of supported exchanges, Gekko could be worth checking out.

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Author: buceoatlantidas

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