# The Ultimate Guide to Crypto Trading Bots By [BalancedGriffin](https://paragraph.com/@balancedgriffin) · 2022-04-19 --- What are crypto trading bots? In case you are not familiar with it, crypto trading bots are a collection of computer programming code that makes up a program model that can trade on your behalf. With crypto trading bots, you have access to millions of trading strategies that you can use for trading or other benefits. Crypto trading bots also allow you to set a bunch of instructions on which trades or strategies you’ll act on, This can be a simple command like to buy X amount of Bitcoin at a certain price and sell it at another price point. The bot will then automatically execute the trade once this rule criterion is met. Crypto Trading Exchanges The best way to make trades happen using crypto trading bots is that most crypto bots will tend to be connected to a crypto exchange account. This has been proven to work by using an API (Application Program Interface) which connects the trading bot with the exchange allowing you to automatically place trades in the exchange. What Are The Risks Of Using Trading Bots? Before going any further, let us address the possible risks of using trading bots, What are the concerns here? To be able to trade using a crypto bot you need to hand over access to your exchange account to a computer program for the trades to execute automatically. The easiest way to do that Is by using an API as we have just discussed. One of the biggest fears is that the computer program may be composed of malicious code or can be hacked at one time or another. Although hacks are rare with most reputable crypto trading bots, this is a real concern that you ought to be aware of. So how can you protect yourself and your investment assets? The secret is to set permissions for the APIs on the trading exchange. You can determine what each API key can do in your trading account, so for example, you can set the ability to only have orders to BUY or SELL, But NOT to WITHDRAW. Another tip is to limit the number of IP Addresses from which instructions or commands can be sent from hence protecting yourself from intruders who may be trying to access your account from a different IP Address. We will discuss this more in detail shortly. How effective are crypto trading bots? To better understand how effective crypto trading bots can be, let us talk about the pros and cons of the major types of trading bots out there. Let us begin with the Advantages. Having the fundamentals of crypto trading down, let’s move on to the advantages of using them as part of your crypto trading strategy. Advantages of Crypto Trading Bots So what are some of the advantages and disadvantages of using crypto trading bots? 1. You can Trade 24/7 as Long as You Want 2. One important advantage of crypto trading bots is that you can trade as long as you want them to help you to make additional money. 3. Especially because trading bots, unlike humans, never sleep, they can trade 24 hours a day giving you the ability to trade all the time. 4. This gives you more options even when you’re on vacation, taking a nap, or just binge-watching your favorite Tv shows. 5. Crypto Trading Bots Can Help Make Your Trading Simple 6. Crypto trading bots can not only help you out from a time perspective, but you can also simplify a lot from your trading. 7. A crypto bot can access and carry out multiple trades across different exchanges simultaneously, allowing you to simplify your trading setup. 8. Thus, if you want to simplify your trading and take yourself to the next level, crypto trading bots are a great way to improve your trading and to learn many additional skills. 9. Crypto Trading Bots Can Help You To Test Your Trading Strategy First 10. Another benefit of having a crypto trading bot is that it can also give you quite flexible tests for your trading strategies. 11. You will put plenty of trading into your crypto bot and the more you trade, the more you will learn. 12. While you will be rather inflexible in your live trading since you will have to trade with real money, you will be much more flexible for your test account, especially if you choose a trading bot that doesn’t require you to use real money to trade on a test account. 13. This will allow you the capacity to back-test your trading strategy. Taking the strategy that you’ll be using and applying it against all the historical data (crypto price data) then using the trading bot and letting it predict for you how successful the strategy is. 14. You can Trade without Human Emotions 15. Crypto trading bots are also quite popular since you can start getting rid of your emotions out of the trading. 16. Trading using a crypto trading bot can be a great way to get rid of your fear of missing out on the trade and to make decent money out of it. 17. Crypto trading bots are especially convenient since they don’t require you to execute trades from a fixed position. 18. Instead, as long as you have set instructions in the bot, you can leave it to execute those trades only if the rule criteria have been met, this will enable you to be less susceptible to panic selling or buying. 19. Disadvantages of Crypto Trading Bots 20. So, what are the disadvantages? 21. You will have to Monitor the Crypto Bots 22. Although having a crypto trading bot can have many advantages as we have seen before, there are still some issues related to it. 23. For example, one problem with crypto trading bots is that they can be quite exhausting. 24. Crypto trading bots need to be monitored, for as you may know by now that the market is cyclical, trends will come and go and this will require you to keep your smarts on, so, do not use a trading bot as a replacement for making good decisions. 25. This can be mentally tasking and there is a possibility that you may be exhausted over long periods. 26. May Lead to Hacking 27. Crypto trading bots can not only be challenging, but they can also be quite stressful. 28. Hacks can and do happen. If you will remember, as I told you, that you’ll need to keep your funds on an exchange, and although most exchanges are reputable and secure, chances are that it is very much possible to get hacked, so keep that in mind and do due diligence 29. Some Crypto Trading Bot Can Be Scams 30. Another disadvantage of crypto trading bots is that there are a lot of scams out there. 31. Sometimes even when you find a legitimate one, some are so poorly coded that it is going to be almost impossible for you to execute a single profitable trade. 32. Hence, you may also put your trading account at risk if you start using a crypto bot that is not reputable and trusted within the crypto community. 33. You will Have To Put In Plenty of Work 34. Like most traders, you might like to believe that a crypto trading bot is a magical button that you press once you begin making lots of cash all year long, sorry let us bust that bubble. 35. This is a myth that needs busting, with a crypto trading bot you will have to focus on putting in the work every day, to be constantly tweaking your trading strategy until it finally pays off and that of course takes work. 36. Types of Crypto Trading Bots 37. Crypto Signal Trading Bot 38. A crypto signal trading bot will rely on a signal generator to make decisions whether to buy or sell coins. 39. What is a signal generator? Also known as a signaller, it’s a service that comprises a set of trading tips from experts that is available to you for a subscription fee. 40. Crypto signal bots deal with risk allocation as they have a better risk/return ratio than a signal that is randomly picked at any time. 41. And finally, this bot issues a Trade Execution, based on different technical indicators, news, volume, or even rumors in the marketplace, picking coins that have a slightly higher probability of profitability. 42. Arbitrage bot 43. The second type of bot is what is known as an Arbitrage Bot. 44. These types of crypto trading bots are programmed to vary with the different prices on different exchanges. 45. Different prices on different exchanges do happen mostly due to the fragmented nature across the marketplaces. 46. You simply program your bot to Buy a crypto coin at a lower price in one exchange and then to sell it on another exchange quoting a higher price for the same coin, that way you get to keep the difference. 47. The only downside to this type of bot is that most exchanges that do quote these prices will have little to no liquidity, and you may also want to consider other factors like transaction fees and trading fees. 48. Programmable Bot 49. These types of bots will help you to take trades that are based on your desired instructions. 50. They can maintain certain criteria like Buy X amount of coins based on market price fluctuation, so for example you could set it to execute a Buy or Sell signal when the price of Ethereum hits a particular target. 51. The programmable bots also offer features like backtesting, which allows you to test your strategies against historical data. 52. HOW TO CHOOSE GOOD TRADING BOTS 53. There is something very important to understand, and that is, this is not a 20,000-word post that talks about every feature of every bot, instead I’ll explain what’s most important in a crypto trading bot and how the bots listed below meet those needs. 54. With that in mind let’s examine what a reputable trading bot does, and that is, it trades with your money while it’s in your wallet on your exchange account, it will never withdraw the money to trade it in any other place, and this enables you to always have full control over your trading dollars. 55. Now that you have the basics of what trading bots are, how they work, and some of the pros and cons of using them, let us consider some of the crypto trading bots that I recommend for trading. 56. But before we get on, here is another pro-tip: test out bots before using them. 57. Yes, run some trades on a demo account, see how they perform first. 58. Which bot is the best for automating crypto trading? 59. In this in-depth comparison, we look at how different crypto trading bots stack up as the go-to bots to build and grow a profitable crypto trading business. 60. In addition to trading-related functionality, we compare the pricing capabilities of each bot. After all, you have to know what they are, what they’re about, and what they can do for you before buying from them. 61. Every successful crypto trading strategy follows the same framework. As you compare the trading bots feature by feature, analyze how each feature will support your trading. 62. When it comes to crypto trading bots, there are many options to choose from, so how do you know the best option for yourself? 63. To help simplify the process of picking a trading bot, I have listed the best trading bots and in no particular order, but have given you a brief explanation as to why I picked each of them. 64. TradeSanta is an automated cloud-based trading bot. It has, as of this writing over 42,000 active users, it also boasts a powerful easy to use interface. 65. TradeSanta supports major exchanges like hit BTC, Binance, Bittrex, Upbit among others 66. Pricing 67. TradeSanta offers a Free 5 Day Trial, with a monthly volume limit of 3,000 USD. 68. Plans: Starting from $14/month 69. The basic plan gives you access to telegram notifications, unlimited trading pairs, customer support while also unlocking access to 49 bots 70. You can also run an unlimited amount of trade volumes with this plan. 71. The disadvantage is that the bot doesn’t support some exchanges like Kucoin and Kraken, and neither does it have support for decentralized exchanges. It’s also not the best bot for arbitrage opportunities 72. Shrimpy 73. Shrimpy was created as a social portfolio management tool back in 2018, ever since its popularity has continued to surge. 74. The main features include: 75. Shrimpy also offers other tools like, 76. One disadvantage, however, is that Shrimpy doesn’t offer signals. 77. Pricing 78. Plans: Starting from $13/month 79. This package offers access to spot trading, portfolio tracking features and it also allows you to access all core features 80. What if you are looking for a free option instead? 81. KuCoin 82. The KuCoin exchange is one of the most popular trading exchanges out there, what you might not know, however, is that it comes with a free trading bot for account holders. 83. The bot can handle dynamic portfolio rebalancing and dollar-cost averaging, it also comes with a classic grid allowing you to Buy Low and Sell high. 84. All this allows you to never be too exposed to a single position. 85. One disadvantage is that there are no integrations with other exchanges. 86. Cryptohopper 87. Cryptohopper is a cloud-based bot that supports over 100 cryptocurrencies on almost all exchanges, it is also very easy to set up. 88. It also gives experienced traders and programmers the ability to program code into it based on the strategy they want. 89. But what if you do not know how to code? Do not worry as this bot will provide you with expert-level trading features with no coding skills required. 90. The bot also has some notable advanced trading features like exchange arbitrage and market-making. 91. Another attractive feature is paper trading which allows you to test strategies with no risk involved, tweaking and optimizing them as needed before beginning to trade with a live account. 92. It also has notable features like backtesting and the ability to social trade, which allows you to follow trading signals from professional traders and copy them into your trading strategy. 93. The social feature gives you access to the Cryptohopper community where you can join in or start discussions with other traders or even buy and sell templates or trading strategies with other users in the Cryptohopper marketplace. 94. However, the important thing to note here is that not everything is free. 95. Pricing 96. Plans: Starting from $20/month 97. CryptoHopper does offer a very basic stripped-down free version. 98. The explorer package however has a 7-day free trial, this package comes with trading automation tools, over 80 open positions, and backtesting. 99. You can also opt for the next package that gives you access to exchange arbitrage. 100. 3Commas. 101. 3Commas is a cloud-based trading bot that has generated 1.2 billion trades and averaged a trading volume of 22.5 billion dollars making it one of the most popular trading bots on the market. 102. Its key features are its intuitive user interface, its ability to backtest strategies, and a detailed analytics tool. 103. You can also craft strategies from the successes of other traders allowing you to add those to your trading portfolio or even craft your custom ones, it gives you the ability to set stop losses and to also to set take profit targets. 104. 3Commas works with smart trading functionality that you can use to craft things like step selling, whereby you sell only when certain price targets are met, so for example, sell half your Ethirium when the price hits 20k, another half of the remaining half at 25k and the rest at 30k. 105. Other tools include smart covers which give you the ability to automate securing profits and hedge against any market conditions that may arise to bring about volatility. The smart cover buys coins at a lower rate and sells them when prices rise. 106. Another feature 3commas offers is to take profits and stop losses which watch for price changes — whether they rise or fall to automatically adjust the closing value of that trade. 107. The bot also offers paper trading so you can test your strategies and you can also visit the 3Commas marketplace where you can buy strategies and bot templates from signal providers. 108. The bot works with a range of exchanges the likes of, Bittrex, Hobie, Kucoin, Binance, Kraken among many more others. 109. Pricing 110. Plans: Starting from $14.50/month 111. 3Commas offers a 3-day free trial which I would recommend you take to test out the bot first before subscribing to its Pro Versions. 112. Pionex 113. The Pionex exchange is one of the oldest exchanges out there to have an in-build trading bot. 114. It boasts of deep liquidity aggregates from Hubi Global and Binance. 115. With over 12 free trading bots, Pionex gives its users a plethora of options to choose from. 116. Features include the Grid trading bot which allows users to buy low and sell high, also included in the Spot features arbitrage bot and the Smart trade terminal that helps to set up stop loss and profit trailing 117. Its Leveraged Grid Bot also allows you to leverage up to 5x your trade. 118. It also has the lowest trading fees as opposed to other exchanges at a whopping 0.005% for the maker and the taker. 119. Included as part of the package are 12 free trading bots for traders. 120. Pionex supports major exchanges like Binance and Houbi Global. 121. CryptoTrader. 122. CryptoTrader is a cloud-based trading bot. It has, as of this writing, a very vibrant marketplace that features trading strategies that you can Buy or Sell. 123. It also boasts of a powerful text and email updates service that will keep you up to date with the latest market changes throughout the day. 124. With support for exchanges like Coinbase and Bitstamp, the bot is a great choice for any active traders. 125. CryptoTrader sets up backtesting tools too as an added feature. It will work well for less-experienced traders but if you have coding skills, the bot will work to your advantage. 126. Gunbot 127. Gunbot was created to be downloaded onto the user’s device. 128. The main features include its built-in strategies that can be customizable to fit any trading needs you may have. 129. Other features include its support for major exchanges the likes of Kraken, Bitfrinex, and Kucan. 130. Trality 131. Trality is a cloud-based trading bot builder that can be used to create your trading bots. 132. Its key features are its Rule Builder and Code Editor that a user can use to create as simple a bot or as sophisticated a bot as they wish. 133. The Trality Code Editor boasts of its ability to be a browser console that Python programmers can use to create libraries or use existing libraries for technical indicators and other trading strategies. 134. The Trality Rule Builder is a smart drag & drop editor packed fully with technical indicators and pre-defined strategies that can be used to create trading bots even without programming skills, which will be best for non-technical traders. 135. Trality also features its support for popular exchanges that you can connect to using API programming. 136. Coinrule 137. Coinrule is a cloud-based bot that supports most of the widely used exchanges like Coinbase and BitMex. 138. It also gives new and experienced traders an easy to use interface without the need for coding skills 139. The bot also has some notable support for several cryptocurrencies and is a great choice for bitcoin trading. 140. ZenBot 141. Zenbot was also created to be a downloadable bot on to the user’s device and is also open source meaning it can be modified for free. 142. One downside for users without coding skills, however, is that the bot requires technical skills as it does not provide a user interface as of this writing. 143. Having said that, an attractive feature is simulated trading which allows you to test strategies with no risk involved, tweaking and optimizing them as needed before beginning to trade with a live account. 144. It also comes with ready-made strategies that you can apply to your portfolio. 145. Our Number One Recommended Crypto Trading Bot. 146. 3commas 147. The Final Word. 148. So, what is the answer to the million-dollar question: 149. Which of these Crypt Trading Bots is best? 150. For most crypto traders, my vote goes to 3Commas. 151. Compared to other Bots, 3Commas is an outstanding value. 152. If you even want to come close to the same functionality with some other bots, you’d have to add a minimum of $10 per month to either mid-level plan. 153. At that point, the pricing would be pretty even, and 3Commas would still be more tightly integrated and easy to set up, even if you ignore all the features, we think 3Commas could make a case as the best pure Bot here. 154. Why? 155. Their interface is the most customizable, they offer some of the best reporting tools of the bunch, and we think the bot is simply more polished. 156. In our opinion, 3Commas just looks nicer and is a more pleasant place to be. And that’s important if you’re using a bot every day. 157. At the end of the day, the final decision will come down to your personal preference. 158. Conclusion. 159. The truth is crypto trading bots do work, however not in the way that most people think. 160. I also want to reiterate that past performance doesn’t always equal future performance and cannot be used to judge future returns, another thing to hammer home is that if you are using one of these bots you’ll need to keep funds on an exchange and that has its risks. 161. So, you might want to spread out risk when using bots by having funds in multiple exchanges. 162. Alright now it is your turn, tell us in the comments below your answers to the following : 163. --- *Originally published on [BalancedGriffin](https://paragraph.com/@balancedgriffin/the-ultimate-guide-to-crypto-trading-bots)*