The cryptocurrency market is very volatile and unpredictable, and even traders or investors who trade different coins and tokens sometimes cannot react in time to the price fluctuations available in the market. So, how can you control your investment portfolio even if you don’t have too much time to devote to it? Here is where a crypto trading bot comes in, and if you’re someone looking for a way to trade better this post is for you.
What is a trading bot?
Simply put, crypto trading bots in the crypto world are tools that enable automatic trading. It is pre-programmed to trade like humans, which means the crypto trading bots can place sell or buy orders and manage your trades and portfolio on your behalf. However, the difference here is that deciding to buy or sell is not emotional; it uses a combination of price fluctuation indicators and market technical analysis to make decisions.
In addition, you can completely customise cryptocurrency trading bots to fit your investment style. Once you have trained or optimised it, it can automatically trade as you wish.
Why use a Crypto Trading Bot?
“If you have patience, you can keep a cool head while everyone else is going crazy.” – Warren Buffett.
Say no to emotional trading: Emotions and fear are the biggest enemies of investors. Most investors fail for this reason. But with crypto bots, this does not happen at all. Simply because it is a robot and trades based on pre-existing configurations, it relies on data and indicators that have taken place in the past to make investment decisions. So it is entirely immune to emotional factors in trading.
Continuous trading 24/7 suits investors who want to speculate in cryptocurrencies instead of long-term investments or those who only have a little time to monitor market fluctuations constantly. Investors who regularly buy and sell currencies to make a profit will no longer have to monitor the market movements and conditions to enter consistently, and exit orders; the only thing to do now is to configure the game rules and let the trading bot take care of the rest.
Popular types of trading bots.
As a trader searching for the best crypto trading bot, you can find five main types of trading bots corresponding to five different trading strategies below. Specifically:
1. Arbitrage trading bot
These are types of bots used to trade price differences between different exchanges and markets. For example, it will buy a coin in one market and sell that coin in another market at a higher price. The difference in trading is the profit it brings. It’s like buying Bitcoin (BTC) on another exchange and selling it on Remitano at a higher price to enjoy the difference.
The question is, how does it find that difference? There are two main ways, as follows:
- It searches for price mismatches across different trading pairs on the same exchange.
- On different exchanges: It determines the price difference of the same coin but listed on other exchanges. That means buying low and selling high.
2. Market-making trading bot
Following the market-making strategy, these trading bots will simultaneously place buy and sell orders to profit from the price difference. For example, BTC is currently trading at $62,000. Now, simultaneously, you place a buy order at $61,999 and a sell order at $62,001. When both orders are matched, you will earn a difference of $2.
3. Technical trading bot
These types of bots, just by hearing their names, you can already understand how they operate. It is entirely based on technical indicators and signals for trading. Depending on the different bot types, the technical indicators used here are MACD, RSI or ROC. These trading bots rely on past indicators to predict future prices. If the prediction is correct, you make a profit and vice versa. It is pretty similar to the way some investors still trade. This is why technical trading bots are pretty famous and widely used.
4. Portfolio automation trading bot
This type of crypto trading bot will be pretty suitable for traders and investors who do not have enough time to constantly see the market and what’s going on. Simply put, this is an automatic way to help investors build a suitable investment list according to specific criteria.
It helps investors create, group and maintain their desired investment portfolios. Instead of hunting for spreads like the arbitrage bot or market-making bot, it focuses on restructuring” their investment portfolio. For example, you want to create an investment portfolio of coins in the top 10 by market capitalisation. If the market fluctuates, a particular currency falls out of the top 10; the trading bot will help you rebalance it.
5. Automated Crypto trading bot
This is a form of automation bot based on some techniques like grid trading. It helps allocate investments proportionally but still within a limited scope by investors. Whenever a limit buy order is created, an equivalent limit sell order is immediately placed above that price. Here, it is pretty similar to Market making trading bot. However, the difference is that buy/sell orders are continuously placed until the investor proactively stops.
You can choose a suitable type of trading bot depending on each trading style. If you have a correct investment strategy, combining it with a trading bot will help you take advantage of opportunities from the market.
Trading crypto using crypto trading bots in any aspect always has potential opportunities and risks. Therefore, choosing reputable products helps traders not become victims. Below are some of the best crypto trading bots in Australia.
Best Crypto Trading Bots for Australians
For each trading strategy, there can be many different types of bots, and each bot has its advantages and disadvantages. Therefore, for each type of bot, introduced below, its outstanding features will be described. At the same time, there is an analysis of the advantages and disadvantages of each type.
Immediate Edge
Immediate Edge was developed to optimise crypto trading for all classes of traders, regardless of whether you’re a professional or just getting started with crypto trading. Immediate Edge offers automated trading options, allowing users to create and deploy algorithms or trading bots to execute trades automatically based on predefined conditions.
Some exchanges have a slightly different buy/sell price than other exchanges.This may partly be because the exchange is trying to attract more users, for example. And Immediate Edge took advantage of this point to help investors make profits. It does not care whether the market goes up or down. Its job is to buy low and sell high with effective risk management.
Pricing
Free of charge
Notable Features
- Neutral to the market: the crypto market fluctuations up or down do not affect profits while using the cryptocurrency trading bot.
- Risk Management: Immediate Edge provides traders with essential risk management tools to help manage and limit their risk effectively with unlimited customization.
| Advantages | Disadvantages |
| Constantly scanning the crypto markets and watching crypto prices in real-time. | Might not always be right with predictions |
| Immediate Edge crypto bot is like your own personal trading assistant. It uses artificial intelligence to analyze trades. | |
| Easy to Use and free of charge |
HaasOnline
HassOnline is built for non-technical investors. It is designed with a relatively user-friendly interface (UI/UX). HassOnline has two versions, specifically:
- HassOnline trade server: This solution is designed for large systems with specialised machines. This solution will be more suitable if you are an organisation or business that profits from trading cryptocurrencies.
- HassOnline cloud: The cloud is a lighter version aimed only at general users. With this version, users will use HassOnline’s existing infrastructure and pay monthly fees based on usage.
Pricing
Hassonline offers many different account options for investors. The difference between the account options is mainly in the number of bots created and the number of indicators the investor can use. Fees vary based on the plan and features required, with prices starting from $9 per month.
Notable features
- Backtesting: Ability to refine automated trades using historical data.
- Paper trading tools: Providing these tools helps investors test their trading strategies before implementing them to minimise risks. Investors can combine many trading algorithms to find the right plan for themselves. This is a form of demo trading.
- Algorithm customisation: If you are technically savvy and know algorithm optimisations, you can use Hass Labs. This helps fine-tune the algorithm to suit your trading strategy better.
| Advantages | Disadvantages |
| Supports many exchanges: At the same time, it is supported on many significant exchanges today. | No trial version: This will be a barrier for new investors. Either they spend money trying it or don’t use it. For many investors who are not sure about the level of effectiveness, there is a high possibility that they will not choose HassOnline |
| Supports many indicators: You can use up to 50 technical indicators to implement many trading strategies. | The cheapest plan has minimal features |
| Diverse types of bots: Hassonline provides many bots to suit each person’s requirements, such as Accumulation or Scalper. | |
| Friendly, easy to use: The UI/UX interface is relatively user-friendly. You can get used to it in a short time instead of having to spend too much time learning. |
HassOnline was established in 2014; it has a stable customer base. With a focus on technology, application of many algorithms and technical analysis indicators, HassOnline positions itself as an all-in-one solution for automated trading.
Of course, it will only be suitable for some investors. It is aimed at investors having an understanding of the market and instead of using and combining many different tools, using HassOnline is enough.
3Commas
3Commas is a perfect fit for technical trading bot lovers. It uses indicators and trading signals to predict future price movements of currencies. Thereby helping investors earn profits. This means 3Commas is like an investor’s “guru”. And, of course, this trading bot can predict correctly or incorrectly depending on the indicator’s analysis.
Pricing
3Commas starts at $AU 44 monthly for the Starter package. Of course, it will have limited features. Interested investors can test the trial version of 3Commas for seven days with all its available features.
Notable features
3Commas uses a complete web interface. It’s like HassOnline offering a Cloud version. So, it is aimed at most investors, who only need to create a user account without installing or configuring anything too complicated.
Automatic connection and trading with exchanges is done via an API connection. This means most current exchanges, such as Binance and Huobi, have opened APIs to serve the connection. However, there is a point to note that when opening the API from such an exchange, you will permit 3Commas to perform transactions on your account. So, you should also have plans to minimise security risks when using it.
3Commas also provides many tools to support investors. In addition, investors can also participate in “Copy trading”, similar to some exchanges like eToro today. This means that there will be investors whose transactions have good performance, recommended by the system. You can then “Copy” their transactions in the hope that it will be effective.
| Advantages | Disadvantages |
| Supports connection to many exchanges: 3Commas connected to 23 cryptocurrency exchanges when I wrote this article. Among them are names like Binance, OKEx, and Kraken. | Security: 3Commas connects to exchanges via API. Opening this API means bots can take control of your account. Of course, you can limit some functions when opening the API, such as only allowing reading and trading and not allowing withdrawals. However, this is also a common weakness. Therefore, it will be safer for you to start testing with a secondary account. |
| Diverse trading forms: 3Commas also provides many trading options for investors such as Copy trading, FTX trading or HFT trading. In addition, similar to HassOnline, it also includes paper trading tools to help investors simulate their strategies. | |
| Mobile application support: The plus point for 3Commas is its mobile application platform for conducting transactions. With the current rate of development of mobile devices, having to use a computer all the time can sometimes be inconvenient. |
3Commas is probably a reasonably popular product today. With an easy-to-use, user-oriented interface design, investors will not have much difficulty operating it.
3Commas’s fees are also considered moderate compared to its competitors. Of course, you still need to evaluate the effectiveness after a period of use.
Cryptohopper
Cryptohopper is an excellent example of a portfolio automation bot or crypto AI trading bot. Cryptohopper maintains an index of the top 20 coins based on market capitalisation. When the market fluctuates or this top 20 list changes, Cryptohopper will automatically adjust to suit at that time.
Investors will manage their investment portfolios on Cryptohopper. Cryptohopper will then automatically transact according to the trader’s request. This transaction will be performed automatically through an API connection to the exchange. If the investment portfolio fluctuates during the trading process, Cryptohopper will allocate resources accordingly, depending on the situation.
Pricing
It’s excellent that Cryptohopper has a free trading option. The paid plans start at $AU25, limited to 15 bots and 80 trade positions, with backtesting possibilities.
Notable features
- Diversification: Cryptohopper’s strategy is to diversify its investment portfolio instead of concentrating. They have focused on building different indexes to serve this purpose.
- Balance your portfolio: When the market fluctuates, your initial portfolio may deviate from your target allocation. Cryptohopper automatically rebalances your portfolio to keep it on track, saving you time. Portfolio rebalancing generally leads to reduced risk and improved returns.
| Advantages | Disadvantages |
| Cheap fees: Cryptohopper has quite affordable pricing. It is almost the cheapest compared to other crypto trading bots. | Security: As with 3Commas, connecting to the API may put your account status in a red flag. Therefore, please have an account protection mechanism to avoid risks. |
| Automatic allocation: Cryptohopper can help you adjust and allocate capital to suit changing market conditions. It will be fine if you only manage 1-2 investment portfolios. But up to 20 investment portfolios will be a complex problem. Therefore, Cryptohopper helps solve this problem. |
If you are a person who follows the “spread investment” school you manages too many investment portfolios, then Cryptohopper will be a reasonable choice.
It’s like a butler managing and operating your property. Of course, whether this butler is practical or not partly depends on your strategy.
Bitsgap
Bitsgap is best known for its unique automated trading bots. Bitsgap uses a GRID trading style. It allocates investments proportionally within a trading range predetermined by the investor. It is a closed loop that traders often see. A Limit order to buy is immediately created for every Limit order to sell. Of course, the condition is that the selling price must be higher than the buying price.
For example, if you trade BTC, the price of BTC is currently at $62,000. You place an order to buy 1 BTC for $62,001. Immediately after that, an order to sell 1 BTC for $62,003 was created. Just like that, it creates continuous loops to help investors make profits.
Pricing
Bitsgap starts at $AU20/month with a trading limit of 2 grid bots. Along with that is a 14-day trial version for investors to experience.
Notable Features
- Automatic trading: Completely automate investors’ trading. You can do this manually. But not everyone can do it manually continuously.
- Potential signals: Bitsgap has algorithms to analyse the fluctuations of current currency pairs. From there, it helps investors find reasonable entry and exit points.
- Integration with many exchanges: Bitsgap has integrated with more than 25 famous exchanges worldwide, such as Binance and Kucoin.
| Advantages | Disadvantages |
| Ease of use: With Bitsgap, you set up upper and lower bounds for each trade/setup. Bitsgap will then automatically trade within your safe zone. | Relatively new in the market: Bitsgap is also an emerging name in the cryptocurrency market. Compared to other products, the number of Bitsgap users is still small. Therefore, this will be a limitation for investors who love long-standing products. |
| Reasonable price: With such a regular and automatic trading tool, $AU20/month is a small number for many investors. | Security: This seems to be a common problem for all cryptocurrency trading bot products. API connections are always risky. Therefore, investors should have a plan to limit risks. |
This is probably a reasonable product as the cryptocurrency market is often volatile. For example, recently, BTC increased sharply from $61,000 to exceed $62,000. With the support of Bitsgap, experiencing price increases like this can also help investors earn large profits.
Investment strategies using crypto trading bots
Trading bots are not the deciding factor in the success or failure of an investment strategy. It is just a tool to support your investment process. Therefore, to earn profits, you should identify a specific strategy. Based on that, you will search for trading bots that match that strategy. Below are some investment strategies you can refer to.
Trend following investment strategy.
At present, the DeFi trend is blooming. The coins of DeFi-related projects are always attractive to investors. Taking advantage of this opportunity, you can trade automatically with an Automated crypto AI trading bot to seek profits in the price fluctuations of currencies.
Arbitrage
Arbitrage trading aims to exploit differences in the prices of cryptocurrencies on different exchanges. As a new and emerging market with automated crypto trading, you can profit from this strategy if well utilised.
Market Making Strategy
Market-making strategies are based on continuously buying and selling cryptocurrencies to take advantage of the difference between the buying and selling prices as prices fluctuate.
Copy Trading Strategy
Copy trading is a campaign to use other people’s abilities to profit for yourself. This copying has partly been proven effective by the results that investors have previously traded. If you are a newbie learning to invest, you can start with a strategy like this.
Risks with using trading bots
Anything has good and bad sides, and trading bots are no different. Although applicable, you should note some of the risks below when using it. A crypto trading bot should be treated as a trade support tool: it cannot completely replace humans. No matter how skillfully it was programmed, it is too rigid to be suitable in all trading situations. And if you intend to buy a tool and leave it to make money for you, this will be a terrible mistake. You may have to pay a monetary price for abandoning your property like that.
Trading bots can also be hackers in disguise. Some trading bots may request permission to access and manage your trading and wallet accounts, which is a sensitive issue. You will not be able to know what the programmer wrote inside the code, and this is like giving your house key to a disguised thief. Unfortunately, if it’s some kind of “scam” tool, it gets access to your account. Learning and researching it thoroughly will help you reduce the unnecessary losses mentioned above.
Conclusion
Using automated trading tools during cryptocurrency trading is advisable. However, investors should carefully choose an option that suits their needs.
It is especially emphasised that these AI crypto trading bots will only partially replace humans. It only has support, warning and enforcement functions based on human settings. Therefore, you must still be knowledgeable about this field to use it effectively.
Frequently Asked Questions
Does a trading bot guarantee profit?
It’s important to remember that utilizing a trading bot does not ensure that you will outperform the market; instead, it just executes trades according to the algorithm and the state of the market.
How does trading in cryptocurrencies operate automatically?
Trading bots offer improved speed and efficiency in trading, eliminating errors and being emotionally insensitive by automatically placing orders depending on your pre-set requirements. Trading bots are becoming increasingly common among traders due to market volatility and the impossibility of constantly monitoring the market.
Are trading bots good for passive income?
Instead of relying on dividends, trading bots allow you to leverage your existing cryptocurrency to generate additional profits. This income-generating system may not be quite as secure as double dividends, but it is one of the only viable options for cryptocurrency investors.
