Bad Best Bitcoin bot strategy are transparent, promote fuzzy subject area advantages without explaining how to hand them, and take a assemblage that is mostly focused on getting rich nimble. Maybe the worst kind of cryptocurrencies is the MLM coins, for example, Bitconnect. We aim talk more about Bitconnect in a turn. When choosing a Bitcoin Robot few features are to be considered. Below given are the few pointers to choose the best Bitcoin trading bot – One of the most important features while considering a Bitcoin trading robot is its reliability. This is very important because, for every business that goes online, trust is an important element of success. Aug 21, · Another form of strategy in the “Mean Reversion” category is what we call the “Pair Trading”, this strategy consists of setting up your bot s according to variations in key assets in a market.
Best bitcoin bot strategyBest Bitcoin Robots - Know Which Bot Is Best for You!
The main strategies that we will detail in the rest of this article are as follows:. Behind these Anglo-Saxon titles hide different kinds of trading bot settings which, once you have understood them, will allow you to optimize your approach to algorithmic trading.
This strategy therefore assumes that when a trend, whether upward or downward in the market, is there to stay, at least until the moment when it switches from an upward trend to a downward trend. Concretely, this trading strategy is based on a bot that will analyze market trends and which goes, depending on the settings made, maximize profits by buying at low points in the price and then selling once a certain percentage of profit has been reached.
This strategy is therefore perfect for avoiding trading influenced by emotions that sometimes lead humans to want to sell at the top of the trend, which most of the time leads to missing the tipping point and thus not not make a profit. On the contrary, the bot will try to maximize profits according to the percentage of expected profit. Period that can vary depending on the periodicity of the trend you want to observe: trend by hour, week, month etc … We can thus observe an upward trend when we observe that the price is found above the moving average bar or lower in the opposite case.
This other strategy deployable through an algorithm is based on the principle that in a majority of situations, prices almost always end in revert to the average price of the asset.
Traders who apply this strategy therefore admit that variations that are too large or too small compared to the average evolution of the price of an asset is the simple result of a snowball effect on the markets. Markets that will eventually rebalance around the historical average for the asset in question. If we take the example of Bitcoin , even if the latter has experienced very significant upward variations since its creation, over a given period in hours, weeks or months, the price undergoes a succession of upward and downward movements around a line of average price.
Once the price reaches these limit points, the probability that the price will revert to the mean are significant, the trading bot thus configured can therefore anticipate future price fluctuations once these Bollinger bands are reached. For example, by observing historical variations in the price of cryptocurrency , it appears that when the course of Bitcoin and of Ether increase significantly, this creates a ripple effect across the cryptocurrency market.
Bots that detect price increase signals on Bitcoin and Ethereum can then anticipate buy and sell orders on other cryptocurrencies on the market. We can never remember it enough, as in any trading strategy, profits are not guaranteed and any strategy presents risks even if the configuration of an algorithm makes it possible to minimize part of it.
As mentioned in our last article concerning the artificial intelligence revolution in the trading industry , advances in AI are now huge. As such, crypto trading bots will be beneficial for users to conduct efficient trading. Before you even make any trades with your bots, you must backtest it against historical market data. You must make sure that your backtest is as realistic as possible. You can do so by taking into consideration latency, slippage, trading fees.
You can collect high-quality market data by accessing exchange APIs. Libraries like CCXT can allow you to interface with a bunch of exchanges. Predetermining the trading strategy that your bot will follow is critical. In this stage, you specify the logic and calculations that will help your bot to determine when and what to trade. After creating the strategy, you must backtest it to see how it performs. We will talk about the strategies that you can implement in a bit.
The next step is to execute it in real-time. In this stage, the logic that you have hardcoded into the bot will be converted to API requests that the exchange can understand. Some bots may even have allowed you to simulate your strategy in real-time with fake money. Now that you hard-coded the strategies and tested them out in the real-world, its time to finally automate the entire process.
You need to set-up a job scheduler to execute your trading strategies automatically. We have touched on this point a little before, but there are a lot of functions that a well-executed bot can conduct for you like rebalancing, portfolio management, data collection, smart order routing, etc. So, when it comes to choosing and coding your bots, you must follow the basic rules of automation:.
Repetitive admin tasks consume a lot of time and effort. One of the best ways where bots can help with repetition is in periodic rebalances. So, you have two options:. Timing and achieving a high degree of accuracy in your trading is extremely necessary for trading. Every single trade that you make can have an enormous impact on your potential earning. The bot can be easily programmed to monitor the market and execute a trade at the correct times.
Plus, imagine the headache if you actually have a well thought out and diversified portfolio! The amount of research you will have to do every single day may be impossible for you to do single-handedly.
Plus, as we have mentioned before, the trading process has plenty of repetitive and cumbersome tasks. A trading bot can efficiently conduct these repetitive tasks throughout the day and make the process much simpler for you. As we have mentioned before, the cryptocurrency market never shuts down.
While this may sound amazing, the reality is that the price can change around the clock. Unfortunately, this means that to make sure that you are leveraging your funds in the best way possible, you will need to be awake all the time, carefully reading the price charts. It seems pretty easy-to-understand, right? However, the execution of this trade could be nearly impossible. This is just one of the many examples of the several complexities that should be factored in while training.
Some strategies could be almost impossible to implement. Trading bots could be used to automate these complex and seemingly impossible strategies with ease. Here are some strategies that you can hardcode into your bots. The content for this section has been sourced from this article.
This assumption holds true both for traditional and cryptocurrency markets. The reason why this happens is because of the overall market psychology. A momentum investor judges the ebb and flow of the market by its momentum. An ideal scenario is to ride a positive momentum wave with your assets and then immediately sell them off when the market momentum reverses. The core philosophy behind this is the belief that the prices of an asset will spike above its average and then run out of momentum and fall down.
In this situation, the timing of the buy-in and sell-off is critical. The Wall Street Journal discovered that trading bots are even used to manipulate prices in the cryptocurrency market. The altcoin market remains more volatile. This creates more opportunities for risk-loving traders. However, by eliminating emotions from trading, robots are able to maximize profits while avoiding potentially big losses.
There is no such thing as a free lunch, but there is indeed such a thing as a free trading bot, but many people are still skeptical about such offers. Indeed, whenever you see a free crypto trading bot, it is either an outright scam with hidden fees or something with very limited functionality. There are also some legit free trading bots, but they usually require good programming skills.
Hence, if you are a complete beginner, it is worth giving a try to popular bots that offer paid subscriptions you are usually allowed to test them out before making a payment. On top of that, you can add any features that suit your needs, which increases your chances of making a successful trade. You can set up your own bot for quick alerts in less than ten minutes. Meet the best of the best. These five bots made a cut to this year's top five best cryptocurrency bots.
You will find out what makes them stand out. DAXrobot is a relatively new cryptocurrency trading bot , which ushered into the crowded automated trading niche at the end of This platform is honed for traders who would like to make their first steps. DAXrobot accepts both cryptocurrency and credit card deposits.
Margin comes with an updated interface along with a slew of new features. However, the team behind the project remains the same.
It has a drag-and-drop visual editor that makes it much easier for rookies to grapple with automated trading. Margin has recently debuted a new tool for writing strategies in Python. This is a very useful tool for creating your own bots that are tailored for the current market situation and sharing them with the cryptocurrency community. Here's an in-depth video tutorial on how to write a bot in Python with Margin. However, it is important to note that traders pay for a lifetime license, meaning that they will be charged only once.
You can get a 10 percent discount by using the marginutoday promo code. Zignaly is a cool and sleek bot that supports the Binance exchange, but they soon plan to add KuCoin as well as BitMEX and Bybit for trading cryptocurrency derivatives. This bot is cloud-based, which eliminated the need for downloading software. It recently debuted the copy trading feature, which allows users to copy the positions of other successful traders for diversification purposes.
You don't have to do anything -- simply allocate your money and that's it. Zignaly will adjust all necessary settings instead of you. Zignaly is transparent about the team behind the project, which might also be its additional selling point for those who are on the fence.
There is also a free day trial. Launched back in Q3, , Arbismart is an EU-regulated arbitrage system. All crypto and fiat operations of Arbismart are licensed in accordance with Estonian legislation.
With its intuitive interface, Arbismart perfectly suits all types of investors. The platform offers a unique Smart Investment Program. It is an instrument for passive income generation that leverages arbitrage opportunities across multiple crypto exchanges.
Its fully automated mechanism scans the rates of top-tier platforms to find the best arbitrage design. The Arbismart team has developed a state-of-the-art diligence and security ecosystem. All investor transactions are protected by bank-grade security protocols with multi-layered SSL encryption and unassailable firewalls. For this purpose, a feature-rich one-click calculator is offered. The project has already managed to build a passionate community on Telegram, Facebook, Instagram and Twitter.
Traders can go to Kryll's market place to engage with the community and buy turnkey strategies from high-profile traders. Another advantage of this trading bot is that it is cloud-based, which means that there is no need to install any software on your computer. Kryll offers a pay-per-use model for its clients for live trading. Users are billed in KRL tokens. Bitsgap is an EU-licensed cryptocurrency trading bot platform.
It works with 27 crypto exchanges including Binance, Bitfinex and Kraken. Bitsgap offers a transparent automated trading experience since traders can see the stat history of both active and closed bots. Every bot by Bitsgap is checked by a Backtesting feature, i. A powerful trial mode is one more striking advantage of Bitsgap: a day trial period is available with all subscriptions.
Bots by Bitsgap can be adjusted manually, semi-manually and automatically.