The explosive growth of the cryptocurrency market, marked in 2017, has led to the rapid development of commercial crypto-platforms. So, if a few years ago traders were available a couple dozens of sites today monitoring service monitors the activities of Coinmarketcap 209 kryptomere, while experts believe that their number is nearing 500. Together with the trading platforms on the stock market there are new financial instruments, among which are very popular trading bots – programs for passive trading digital currencies. We examined the types of bots available to the traders, their key advantages and disadvantages, and how effective they are.
Bots exist in the form of software that, in most cases, works directly with cryptomeria via the software interface (API). Aim bot – automatically execute trades with assets. for this bots carry out a detailed analysis of market information and, based on this data, make decisions on conclusion of transactions. Depending on the strategy chosen, set parameters and goals, a trader can choose one of four types of bots:
Trading bots analyze information obtained from cripture, and make decisions about buying and selling cryptocurrencies on the basis of chosen by the trader parameters. This type of bots can be independently configured to operate with multiple settings, or use pre-defined strategies that have been developed by analysts.
Arbitration bots monitor changes in prices of cryptocurrencies on different exchanges and automatically make trades to profit from difference in price.
Custom botsor order botsare used for transactions with pre-defined settings that are entered manually or selected automatically.
Scripted bots are in the form of the base software through which the trader can customize the bot. Used by experienced traders are aware of the details of trading in the stock market.
Providing access to the money, any trader faces the potential risk, even if we are talking about software, not about third-party entity. According to experts, working with bots, traders can experience problems associated with the defective software, instant collapse of quotations of cryptocurrency and fraud.
Defective softwareis not available today, bots was launched by a team of professional developers and experienced capturadora. Moreover, the bot in the code which was a mistake, may be not just ineffective but also cause significant financial losses, especially in combination with poorly chosen strategy. So for trading you should choose only verified bots with a reliable reputation and a wide variety of tools.
Instant collapse of cryptocurrency: cryptocurrency is extremely volatile asset, is not immune from landslides. So, in June 2017 the exchange GDAX as the result of a major transaction the price of the air has dropped from $319 to 10 cents. As a result, the traders who did not put stop-loss limits in a matter of seconds suffered huge losses. In this regard, some traders believe that bots can work only in standard situations and experienced trader accurately predict the market situation.
Fraud: on the unregulated market of crypto-currencies fraud cases occur often enough, and bots are no exception. In December 2017, the market was active Scam bot Hexabo, which blocked the funds of a user, suspending the output of cryptocurrency, and then stopped working, presumably, sending all funds to the platform developers. Also, according to one trader, you should avoid popular free bots, because with them it is possible to download malicious software whose purpose is to access private keys of wallets or use the trader’s nod for mining.
However, the use of bots has several key advantages for traders. First and foremost, bots give you the opportunity to constantly interact with the stock market without having to constantly monitor the state of the market. Moreover, a properly chosen boat not only helps save time but also protects from the constant stress associated with cryptocurrency trading. Also inexperienced traders can follow the trading bots to perform inherent in their work settings and strategies.
However, the success depends on the trader of the bot and the operating parameters of his algorithm. So, a trader and founder of the portal Fynestuff Upamanyu Acharya shared his experience with the bot open source at the exchange Binance. Trading a pair of NANO/BTC less than a day, the trader is faced with the following problems:
The bot performed a buy order during large-scale dumps due to the fact that the algorithm recognized it as an attractive price for the transaction, not speculation;
The level of profitability of all orders were 0.6% or lower, since more active bots are filling the orders faster;
For each executed order, the trader paid a Commission – 0.1% of the transaction amount (or 0.05% in Binance Coin);
Bot often did not have time to cancel the order for the purchase of crypto-currencies, a trader would sell at a higher price in the future. As a result, the trader has two choices – to suffer loss or disadvantage to keep the cryptocurrency.
Also to get a substantial income from the use of bots, the trader must have sufficient amount of funds. For example, using an arbitration bot to trade with bitcoin a trader needs to have a Deposit in bitcoins on multiple exchanges. As noted by the developer of the bitcoin and Viacoin and well known trader Romano, his income in 0.26 BTC ($2400) 9 a secured bitcoin, which works daily bot Hass.
But Romano cautions newcomers from the bot, stressing that Hass is only for experienced traders.
A brief overview of the most popular bots available to the traders on the stock market.
3Commas popular pay-bot for automated cryptotrading that works with exchanges such as Bittrex, Bitfinex, Binance, Bitstamp, KuCoin, Poloniex, GDAX, Cryptopia, Huobi and YOBIT. It offers a wide selection of diversified portfolios that users can choose for investment or for use as an analytical tool to track the state of the market. Provides simultaneous use of applications stop loss and take profit. Has four levels of subscription – the «basic» for $30, «the Trader» for $50, «Professional» for $100, as well as «Individual» in agreement.
Cryptohopper — cloud a paid bot that will work even if the trader’s computer is offline or turned off. Experienced traders can customize the bot, while beginners can use the available «autopilot». Bot is also able to analyze and review the effectiveness of the trading system’s signals, performed on historical (backtest), the algorithm of management stop loss order, and may trade on several exchanges. Has three monthly subscription for 19$, 49$ and 99$. With more detailed analysis of the platform can be found here.
Cryptotrader is one of the most popular cloud kriptopolis for trading. Supports many cryptocurrencies and exchanges. Must be fully configured by the user. Offers features backtesting and strategic market that allows users to trade strategies. Has five levels of monthly subscriptions: 0.0018 BTC BTC 0.0025, 0.0045 BTC, and 0.0214 0.0086 BTC BTC.
Haasbot is a platform for automated trading, is intended primarily for experienced bitcoin traders. Uses the strategy developed on the basis of technical analysis. This bot is paid and has three levels of annual subscription: the license is a «Newbie» in 0.073 BTC, «Simple» in 0.127 BTC and «Extended» license, which is 0.208 BTC. Depending on the purchased license, the user can configure several interconnected bots that will be able to perform several different functions.
Gekko — bot free open source, available for download on GitHub. Quite simple to use, has detailed step by step instructions that will be useful to inexperienced traders. Has user friendly interface can perform a backtest strategies and visualize the results of trade. Moreover, the software the bot runs on most operating systems.
Zenbot is another bot with open source code for bitcoin traders. Bot users can download the code and make modification to his work, and his algorithm is available for major operating systems. And, unlike Gekko, Zenbot can execute high frequency trades and to apply arbitrage opportunities. However, cryptosuite note that bot a long time was not updated and therefore not have the opportunity to work with new exchanges.