Automated Crypto Trading

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Contributor, Benzinga
May 2, 2022

Automated trading lets you actively trade cryptocurrencies without constantly monitoring your computer. Automated trading uses algorithms to buy and sell your cryptocurrencies at certain times. Depending on the automated trading strategy you use, trades may be executed based on asset price, technical indicators, or the proportion of value in your portfolio (rebalancing).

If you don’t have the time to trade cryptocurrency and don’t want to buy and hold, automated cryptocurrency trading is a great option. There are several automated trading platforms available, and each has its own set of features and trading strategies.

What is Automated Crypto Trading?

Automated crypto trading platforms are automated software that trade cryptocurrency for you. To use an automated crypto trading platform, you need to make an online account with a trading bot and select a trading strategy to use. Once you’ve selected an automated trading bot, the program will buy and sell your cryptocurrency for you based on the parameters of the software. 

Most automated crypto trading programs work as APIs. API trading bots work as an intermediary that trades for you on another exchange you connect. 3Commas is an API that you can use for automated trading on exchanges like Binance, Coinbase Pro, Bitmex and Kraken

The newest and most secure form of automated crypto trading are automated trading bots that operate on the blockchain. Instead of using a website or API, tokenized crypto trading uses smart contracts on the blockchain. Smart contracts are code that perform financial functions autonomously –– this code is typically uploaded to Ethereum’s network, as it’s the leading cryptocurrency that supports smart contracts.

Best Automated Crypto Trading Platforms and Bots

There are many choices for automated trading platforms. These platforms operate very differently from each other, and each has its own benefits and drawbacks. The right trading bot for you depends on the type of cryptocurrency you want to trade, what exchange you already use and your risk tolerance.

Best for Preset Strategies: Coinrule

Coinrule offers the widest range of preset trading strategies, and the crypto trading bot currently allows users to customize investing with more than 150 trading templates automatically executed when market conditions meet predefined parameters. From accumulation to long-term holding strategies and stop-loss settings, Coinrule constantly introduces new templates to its platform.

Though the number of templates that you’ll have access to will vary depending on the plan you choose, Coinrule offers a free package with 7 complimentary template strategies and up to $3,000 in monthly trading volume. Additional paid packages include features like advanced charting options, unlimited template usage and even one-on-one trading tutorials and lessons. 

  • Coinrule
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    Free - $449.99/month
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    securely through Coinrule's website
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Best for Expanded Trading: Pionex

Pionex expands your horizons by offering 18 trading bots that use unique strategies to give you results. These trading bots are explained on the website in detail so that you can decide which one might work for you. You can connect with a bot that you believe will work, or you can use different bots until you find one that makes you comfortable. These bots include:

  • Grid Trading Bot allows users to buy low and sell high in a specific price range.
  • Leveraged Grid Bot provides up to 5x leverage.
  • Spot-Futures Arbitrage bot helps retail investors to make passive income with low risk. The estimated return for this strategy is 15~50% APR.
  • Martingale bot performs DCA buy, one-time sell to capture fluctuation profit.
  • Rebalancing bot helps you to hodl the coins.
  • Dollar-Cost Averaging (DCA) Bot Sets repeated purchasing at regular intervals to offset the effects of volatility.

Plus, the Smart Trade terminal allows traders to set up stop-loss, take profit, trailing in one trade.

You save money with Pionex because you only pay 0.05% maker and taker fees on each transaction. There are no hidden fees, it’s free to sign up and you can can money in your account that would have otherwise gone to greedy exchanges.

Email or live chat with Pionex for more information. The firm allows anyone to get into the crypto market, irrespective of their experience or knowledge level. As you use these trading bots, you will come to understand crypto investing and feel more confident in your portfolio.

  • Pionex
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    Best For
    High-volume Investors
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    securely through Pionex's website
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Best Exchange Rates: WunderBit

Wunderbit strives to facilitate the real-world use of cryptocurrencies through a number of products and solutions. It offers a licensed, accredited and regulated financial institution that allows its clients to buy and sell Bitcoin safely and securely.

Wunderbit currently offers a bitcoin and other cryptocurrency exchange service, social trading platform, bitcoin payment processing service and over-the-counter service.

  • WunderBit
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    Pricing
    Free - $49.95 per month
    Account Minimum
    50EUR - 500 EUR, depending
    securely through WunderBit's website
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Best for Bot Trading: Botsfolio

Investing as little as 5% of your net worth into cryptocurrency markets can nudge your portfolio toward outperforming the best equity tycoons.

Just answer a few questions to know how to allocate investment in different cryptocurrency trading strategies, add investment amount to your cryptocurrency trading exchange and link it with Botsfolio in minutes. 

Bots automatically trade from your account and you can track your automated cryptocurrency trading activities on Botsfolio's intuitive visual dashboard.

Get involved in hands-off bot crypto trading today.

  • Botsfolio
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    Pricing
    $60 to $540 annually, depending on portfolio value
    Account Minimum
    1000 Tether
    securely through Botsfolio's website
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Best Exchange Connectivity: Shrimpy.io

Shrimpy.io is unique because it invites you to manage your entire portfolio in one place. You can link all the exchanges you use, all your wallets and manage your money without bouncing around the Internet.

Shrimpy supports 18 exchanges, including Binance, BitStamp, CoinBase Pro, Kraken, etc.

Social trading allows you to copy an expert in the field. Yes, you can study cryptocurrency and learn how to trade, but there is nothing like copying a de facto mentor who can show you how to succeed as a trader.

There’s an affordable plan for everyone:

  • $15 per month for the Starter plan
  • $63 per month for Professional
  • $299 per month for Enterprise

You can also read whitepapers on cryptocurrency, information for developers and backtesting results that inform your investments.

  • Shrimpy
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    Best For
    Novice Crypto Investors
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Best for Beginners: CryptoHopper

CryptoHopper is a cryptocurrency trading bot API supported by most big exchanges. This trading bot is the No. 1 choice for beginners because of its affordability and unique trading features. 

If you’re new to CryptoHopper, you can get a free 3-month trial to test their services. After your trial is over, you can choose from 3 tiers of subscriptions ranging from $19 to $99 a month. 

If you want to familiarize yourself with a trading bot but don’t want to risk money, CryptoHopper offers simulated paper trading. This is a great way for you to get acquainted with the software before risking your money. CryptoHopper has a built-in social trading platform where users can share their trading strategies, which is a particularly helpful tool for beginners.

CryptoHero also allows you to use market indicators, run test trades and change your preferred currency. There’s no need to run back to your computer when the app sends timely notifications and gives you all the access you need.

  • CryptoHopper
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    Free - $99/mo
    Account Minimum
    Depends on asset
    securely through CryptoHopper's website
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When You Should Use a Crypto Trading Bot

You should use a crypto trading bot if you think a certain trading strategy can beat the market. Using a crypto trading bot doesn’t guarantee you’ll beat the market –– a trading bot simply executes trades for you based on an algorithm. 

Another reason to use a crypto trading bot is to diversify your crypto holdings in a strategic way. With Tokensets, for example, you can hold a singular token that represents a trading strategy that trades both Bitcoin and Ethereum based on trading indicators. 

Types of Cryptocurrency Trading Bots

There are 2 major types of crypto trading bots on the market today: crypto trading bot APIs and decentralized crypto trading platforms.

  • Crypto trading bot APIs: These are the most common form of crypto trading bots on the market today. Crypto trading APIs connect to other cryptocurrency exchanges to manage your investments. This is a great option if you already have a crypto brokerage account on a well-known exchange like Coinbase Pro, Kraken or Binance. 
  • Decentralized crypto trading platforms: Decentralized crypto trading platforms are the most secure way to use automated crypto trading. This type of automated trading uses blockchain technology to trade cryptocurrency autonomously. Your funds are held in a smart contract on the blockchain, and you own a portion of the funds in the smart contract, redeemable through cryptocurrency tokens issued by the trading platform.

Advantages of Automated Crypto Trades

Taking advantage of automated crypto trades can offer your some major benefits like:

  • Timing: Since crypto bots trade based on software, they can buy and sell your cryptocurrency much faster than you could manually. If you’re trading based on a trading indicator, use a bot to place more precise market orders. 
  • Repetitive tasks: Most crypto bots on the market trade 24 hours a day, 7 days a week. If you trade cryptocurrency based on the market indicators, you can use a crypto trading bot to do the work for you.
  • Consistency: Bots are much more consistent than humans, as bots are able to operate nonstop and always execute orders based on specific indicators. Oftentimes it’s hard to stay disciplined while trading cryptocurrencies, so using a trading bot eliminates the risk of “emotional trading”.
  • Save time: Using a crypto trading bot will save you time because the program watches the market and executes trades for you. If you don’t want to constantly monitor cryptocurrency markets, then an automated trading bot is right for you.

Disadvantages of Automated Crypto Trades

On the flip side, choosing automation can present disadvantages like the following:

  • Security: Although crypto bots are generally secure, you need to hold your crypto funds on an exchange to use a trading bot. Holding your crypto in an exchange increases your risk of being hacked, but most large exchanges are generally safe. If you want to hold your cryptocurrency in a more secure way, you’ll need to use a hardware wallet.
  • Monitoring: Even though the trading bot monitors the market for you, you still need to watch cryptocurrency prices. This is because cryptocurrencies are very volatile, and your trading strategy may not align with the market conditions.
  • Experience needed: Automated trading bots are best used by advanced traders. If you aren’t familiar with the trading indicators used by the trading bots, you probably shouldn’t use the bot. 

Buy and Hold or Actively Trade?

Again, using a cryptocurrency trading bot doesn’t guarantee that you’ll beat the market. Cryptocurrency can be unpredictable and very volatile, so trading based on technical indicators doesn’t always work. 

But some crypto trading bots have had a history of beating the market by a substantial amount. If you trade based on technical indicators anyway, use a bot to save you time and to place more precise buy and sell orders.

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