Are you a crypto trader who wants to trade automatically? Not sure how to choose the right platform? Here is the guide for how to choose the best crypto trading bots!
Money, it has always been said, does not grow on trees. However, the idea of seeing your money grow without doing anything is among the best dreams of all, and the world of auto trading winks in this sense. The fact that our portfolio can continuously update, in the face of fluctuations in the stock market, not having to spend the whole of our days looking at charts and numbers is something very interesting.
Not everything, however, is really that simple, and to ensure that crypto bot trading turns out to be a fruitful activity it is important to know how to choose the best cryptocurrency trading bot and operate with caution and rationality.
Obviously, before starting to trade, you must have cryptocurrencies and with which to start, if you have not yet purchased them I recommend multiple exchanges on which you can buy cryptos such as the famous Binance cryptocurrency exchange.
What is a crypto trading bot?
To carry out crypto bot trading, there are many crypto trading bots or software through which a trader has the possibility to exempt himself from carrying out some operations which, otherwise, would subtract time from other activities.
In other words, a Bitcoin trading bot is nothing but the software operating on the crypto market in a completely mechanical manner and although it is an algorithm, it takes decisions independently on your behalf
For example, it could happen that an unexpected job prevents us from monitoring our assets as necessary: in this case, having a crypto trading bot available could be decisive for the performance of our business.
But is a Bitcoin trading bot really that simple? Is it really enough to buy crypto trading software and let it grow my money on its own? I guess no one will be surprised but the answer is no. To ensure that these tools do what we buy them for at best (increase our profits) we must address them correctly: a crypto trading bot acts on the basis of numerous indicators which will however be modulated on information provided to the software by ourselves. I speak for example of:
- Price of entry/exit from assets
- Take Profit/Stop Loss
- The capital to be invested in the individual securities
To better understand what it is, let's see in detail how crypto trading bots work.
How do crypto trading bots work?
Once the purchase has been made, once we have our crypto trading bot available it will be important to configure it in the best way. The real effectiveness of the settings that we will provide to the cryptocurrency trading software, however, is strictly linked not only to the type of operations we intend to carry out but also to the indices and strategies used by the platform to which we refer.
In fact, not all trading bots use the same tools, and consequently, the approach with which we intend to face the markets cannot be considered universally valid for all crypto trading bots. Also, moving on to practice, it will be important to check that the bot we intend to purchase is compatible with your exchange.
How to choose the best crypto bot?
Over the years, the practice of automated crypto trading has experienced strong growth and it seems inevitable that this new interest is also accompanied by an increase in the offer of the service. Choosing the crypto bot that best suits your needs is not easy at all as it is necessary to weigh numerous factors:
- Trading Costs: While most Crypto Bots don't take any commissions or spreads, you need to make sure there are no hidden fees or charges that will hurt your profit margins. If there are any costs, you should be aware of them in advance.
- Ease of Use: Choose a platform that you can easily learn to use over the long haul. A trading bot that does not have a user-friendly and intuitive user interface will become frustrating to use in the long run, leading to an unsatisfactory trading experience.
- Payment Methods: Another key variable you should always consider is accessibility to a variety of payment methods. Make sure you choose a convenient, fast and easy payment method so that you are able to easily deposit and withdraw your funds.
- Accurate Intelligent Algorithm: Since crypto bots rely on algorithms to execute trades and analyze data, make sure you choose a Bot that offers the best service in terms of evaluating charts, data and price movements as well as performing all operations with extreme precision.
- Customer Service: Many crypto bots do not offer any communication channels to their users, which can be quite frustrating if a problem occurs. Always choose a Cryptocurrency robot that offers responsive customer service.
- Regulatory Compliance: Another aspect to consider when choosing a Cryptocurrency Bot is having the guarantee that the trading platform is compliant with KYC and AML regulations. This will keep your data and funds safe.
Pros and cons of crypto trading bot
Among the advantages related to the use of cryptocurrency trading software there are certainly:
- Speed of response to market changes;
- The objectivity of the tools provided. One of the main mistakes made by traders, especially if they are a beginner, is to allow the emotional sphere to intervene in the decision-making process: indecisions and second thoughts often lead to irrational choices in the face of situations that require a prompt reaction to be maximally exploited. The bot instead intervenes with immediate effect, leaving no room for improvisations that compromise one's trading plan;
- Diversification of investments (one of the main methods of limiting risks);
- Management intuitive portfolio;
- Automated monitoring of the performance of your assets.
As for the disadvantages:
- Continuous monitoring of the effectiveness of the implemented strategy;
- Technical problems, such as malfunctioning of servers. As rare as they are insidious.
Best cryptocurrency trading bot
Now let's move on to the list of platforms offering the best cryptocurrency trading bot.
EToro automated trading
eToro certainly needs no introduction, it is the most popular online broker in the world, its community exceeds 10 million subscribers and its reliability is proverbial.
First of all, we are talking about a safe intermediary, with numerous licenses.
The eToro trading platform can be used manually to trade major cryptocurrencies or to trade other assets, such as stocks, indices, forex, etc.
The strength of this broker goes beyond its trading platform and its excellent spreads; it depends on its community, which gave birth to Social Trading.
This eToro internal network is a social network of investors who exchange information and support each other.
From this social network was born one of the most revolutionary automatic trading systems in the world, which eToro has patented under the name of Copy Trading.
EToro's CopyTrading is not only a crypto trading bot, but also a system that operates in other markets, but what sets it apart is how it works.
The software does not follow an algorithm but copies the operations of the best traders who are part of the eToro community.
Copy Trading is very fast and when you have chosen the traders to copy, as soon as they make any market operation, the cryptocurrency trading software will copy it in real-time to your account.
DupliTrade is a platform provided by the broker AvaTrade and is compatible with the CySEC regulated MetaTrader 4 platform.
It allows traders to automatically follow and copy all the trades of more experienced traders directly to their AvaTrade trading account, but they also have the option of manually copying the strategies of their interest.
It is characterized by a user-friendly interface, where you can easily create and manage your trading portfolio and where you can follow functional technical analyzes.
To start trading automatically on your MT4 account via AvaTrade, you need to register on the platform and make a minimum deposit of $2,000.
For those who do not want to proceed immediately with the Real Account and still do not know the financial markets well, they can decide to practice with the free demo account in order to operate safely by investing virtual money.
Thanks to DupliTrade traders can own a diversified portfolio and can select winning strategies belonging to successful traders.
Registration is simple. First of all you need to have your own account on AvaTrade, then you must have downloaded the MT4 platform and finally open an account on DupliTrade. To trade, it is necessary to link the AvaTrader and DupliTrade accounts and then automatic execution must be set up.
DupliTrade for its automated copy trading service does not charge any type of monthly commissions, it only charges commissions on ongoing transactions.
The CySEC-regulated ZuluTrade Copy Trading platform is very simple to use and allows you to copy and share strategies with traders from all over the world. Furthermore, it is possible to follow in real-time all the trading operations carried out by other traders registered on the platform.
It is a state-of-the-art automated trading platform. There is both a web version and a smartphone version via the app. With AvaTrade you can activate ZuluTrade and use the advanced features on MetaTrader 4.
Unlike DupliTrade, the minimum deposit on ZuluTrade is much lower, we are talking about $100. This certainly makes it more accessible. It also offers a wide range of features including charts and indicators to analyze market movements.
ZuluTrade hardly provides any kind of commissions other than trading commissions. There are also no fees charged for deposit and withdrawal.
Thanks to the ZuluTrade platform, it is possible to copy the best traders, which are divided for example according to the rate of return, the type of assets traded, or even the number of copiers.
On the platform, traders also have the opportunity to discuss and share their trading strategies and knowledge with other users.
In case the copied trader suffers losses, the trader who copies can protect his trading account through the ZuluGuard function, which automatically removes a trader when it detects strong risks of loss in the operations.
For those who are not advanced traders, the possibility is also offered to operate through the free demo account, with which it is possible to practice using virtual money made available by the platform itself.
3 Steps to use a Bitcoin trading bot
- Choosing cryptocurrency trading bots
Based on the factors mentioned above, you need to choose the best crypto trading bot that is compliant with your trading needs. Find a cryptocurrency trading software that offers the right balance of reliability, security, performance, and convenience. You should also consider the fees associated with the platform before selecting a cryptocurrency trading bot.
- Registration/configuration of the cryptocurrency trading bot
The second step for using a bitcoin trading bot is to register on the bot's platform and verify your identity for security reasons. After completing the verification process, you will need to send a minimum deposit to your account which will serve as the starting capital for trading.
- Start using the cryptocurrency trading software
Once you have deposited your trading capital, you are ready to go. At an early stage, it is recommended to start with small quantities. Despite this, it is a good idea to spread the invested capital across multiple operations. This bot strategy will help you reduce your risk.
What are the risks of using a forex trading bot for cryptocurrencies?
The risks that are run by trading through the use of a forex-trading bot are limited, in addition to the danger of heavy loss of money, to the possibility of running into scams or false promises. This possibility is easily avoided by carefully choosing the platform to which to turn. All the main and most popular trading bots guarantee a good level of security and reliability in this regard.
Tips and advice
When it comes to crypto bots trading, it is wrong to believe in the mere appearance of an easy profit within everyone's reach. To use this trading tool profitably it is important to have a precise idea of one's objectives and the strategy implemented. However, it is equally true that automated trading bots represent a good investment opportunity for those who do not intend to spend a lot of time monitoring their assets. It is therefore essential to act consciously not only in choosing the cryptocurrency trading software but also in defining one's investment program.
Opinions regarding the world of crypto bot trading are conflicting: many say they are fully satisfied, others believe that they are instruments that excessively expose their funds to negative trends.
What is certain, however, is that crypto trading bots are especially useful for intensifying and diversifying one's positions on the markets, favoring fast and frenetic trading activities (scalping).
The crypto markets are constantly changing. Prices often fluctuate dramatically over short periods. A trader can take advantage of this volatility, but it is difficult and time-consuming to monitor the performance of this dynamic market. The best way around this problem is to automate the trading process with the help of crypto trading bots. This cryptocurrency trading software works by extracting important information from the internet (prices, for example) and act independently on that basis.
The best trading bots are designed to work with major exchanges, such as Kraken or Bittrex. They can be used on PCs, Macs, and even smartphones. This flexibility makes it possible for anyone trading cryptocurrency without the need for an expensive trading terminal or a lot of time monitoring prices. The biggest advantage of trading bots is that they execute transactions in real-time, while traders have no direct influence. One downside is that even the best cryptocurrency trading bot is not completely independent because they have to get their inputs from somewhere (markets). Another aspect is transparency, as everyone can see every order placed by crypto traders at any time.