The crypto industry is complicated and requires investors to dedicate significant time and effort to learn about new projects and tokens currently dominating the market. Since many projects are based on technology that many people do not fully understand, it is quite hard for people to apply both fundamental and technical analysis to their trading strategies.
The vast majority of successful traders will say that using a good crypto trading bot is a good solution to the issue of market complexity. Technical analysis does not require you to learn everything about an asset you want to trade. However, many strategies based solely on TA usually require investors to spend a lot of time tracking prices. Bots allow you to maximize profits easily.
How does crypto trading bot software work?
A bot is a simple script run by specialized platforms. While companies usually have different approaches to coding and developing their products, you will unlikely find two identical services, but the vast majority follow a very simple pattern:
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Users set up bots and choose sources of signals (it can be another successful trader or a technical indicator).
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Bots receive signals and act according to their settings. For example, if you use RSI and command the bot to short an asset when it reaches 70, the program will do just that.
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Bots send commands to exchanges via API and place orders in your name. You define stop loss and take profit parameters.
The whole process usually takes seconds and does not require any active participation from users. It is a great solution for a market that has so many unique qualities. Crypto exchanges operate 24/7, cryptocurrencies are very volatile, and prices differ across multiple trading platforms. It means that an efficient trader is someone who never sleeps, quickly reacts to price changes, and can track multiple exchanges at once. Humans rarely can do that.
A bot for crypto trading has numerous advantages over biological humans:
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Bots do not require rest. Since markets are open for business around the clock, you miss out on valuable opportunities when you are asleep. Using a time-tested strategy with a bot allows you to stay active 24/7 and capitalize on every good moment to enter the market!
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Robots never hesitate. Machines do not have the same emotions as humans and won’t make rookie mistakes due to anxiety or stress. They will perform as instructed even in a situation where people may doubt themselves and miss out on a chance to make money.
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Robots analyze data quickly. They don’t even have to look at graphs. Numerical inputs are received from multiple sources and analyzed momentarily allowing bots to make decisions instantly! People can never be faster than computers.
How to choose the best crypto trading bot in 2022
Many respectable companies offer useful trading tools to a large audience of investors across the globe. However, many have specializations, different integration options, and other unique features that make them distinctly different. Some services will work for people who want to focus on social trading or copy strategies from others, while others will be a great choice for those who aim to implement scalable strategies across multiple exchanges.
Regardless of your requirements and preferences, you should be choosing platforms based on their qualities. Two things must be considered above all else:
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The versatility of tools. A crypto trading bot app must have diverse instruments for automation. While you may think that you need only copy trading or DCA buying, using Arbitrage and GRID can be very effective. If you have a sufficient portfolio to work with different automation tools, you should always consider implementing additional ways to generate income. Diversification is key to success. Choose platforms with multiple products.
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Pricing. Many contemporary companies offer their services for free to allow new users to test products without committing to paying. WunderTrading has a good free plan with up to 5 bots that you can use as you see fit. You don’t need to pay for anything and can upgrade whenever you feel comfortable doing so. The free plan gives you access to the whole spectrum of analytical and automation features that you can use to learn more about the crypto market.
Reading user testimonials about platforms, checking their interfaces to find good products that you can easily navigate, and looking at integration options are all valid approaches to finding a good platform. However, pricing and versatility are two ingredients that usually play the most significant role in determining the viability of any given automation service.
TOP 3 Platforms
We decided to put together a very short list of companies that will most certainly attract your attention. These are good choices for any automation purposes.
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WunderTrading is one of the best providers in the industry. It is a great platform with many tools like DCA, GRID, and Arbitrage bots as well as specialized analytical instruments allowing newcomers to quickly understand the intricacies of the crypto market. WunderTrading offers an excellent crypto trading bot for beginners: you can set up your first script effortlessly, start trading without any experience, and use their tools for free.
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AlgoTrade is a good option for those interested in the customization of trading strategies. While not as polished as many other platforms in the market, it is a good place to start investing if you are interested in algorithmic approaches to investments and want to engage with all sorts of financial markets. It is not specialized but works well for crypto.
3Commas is a platform that appears to be focused primarily on social trading. However, it has a variety of automation solutions and many integration options. The company also offers a free plan and can be used as a good starting point for inexperienced crypto investors. On the other hand, the list of premium features is quite limited compared to some other platforms.
