How to choose a bot for cryptocurrency trading?

Cryptocurrency trading is very popular, but not everyone knows that it can be traded not only independently, but also with the help of cryptobots. A trading bot is a program that trades cryptocurrency for you. Of course, first you will need to find a suitable bot for trading cryptocurrency. When you're new to the cryptocurrency world, it's not always easy. That's why we're going to help you with this. In this article, we will tell you all about trading bots, and which cryptobots are the best.

Looking for a reliable exchange for cryptocurrency trading? We offer Binance – the most popular crypto exchange in the world with a large selection of coins and low commissions.

What is a trading bot?

The emergence of bots for cryptocurrency trading has revolutionized the world of trading. A trading bot, also known as EA (Expert Advisor), is an automated software that buys and sells assets without your participation.

How does a cryptocurrency trading bot work?

The trading bot is based on mathematical algorithms. The cryptobot determines the entry and exit points of the transaction, focusing on market trends and financial market signals in accordance with the specified program code.

Advantages of trading bots

1. Saving time. The main advantage of a cryptobot is that it saves time because trading is done for you.
2. Optimized trading. The automated trading platform operates 24 hours a day, 7 days a week (day and night). Thus, the bot's decisions are based on logic and algorithms. As a result, decisions can be made immediately and quickly, using all the information from the financialabout the market, without the emotional factors inherent in a person.
3. Fast and autonomous trading. The trading bot allows you to conduct fast trading. This is an automatic program that performs a specific task. It can trade in milliseconds when scanning market data.
4. Increased liquidity in the financial market. By using a trading bot, companies and individuals benefit from a sharp reduction in trading costs. As a result, the market becomes more liquid.

Disadvantages of trading bots

1. The risk of fraud. Due to the growing popularity of cryptobots, many fraudulent sites have appeared. Viruses, malware, phishing, and trading fraud can cost an investor a lot of money if he is not knowledgeable enough.
2. You may lose all your money. Like all investments, trading bots carries the risk of partial or even complete loss of invested funds.
3. Bots can increase volatility. The more transactions are made in the market, the more difficult it is for the market to find stability. Thus, the growth in the number of bots makes the market more volatile and less balanced.
4. The declared profit has not been confirmed. Do not rely only on the winnings advertised on the cryptobot website. Remember that profitable trades in the past do not guarantee profits in the future.

See also what brokers exist with cryptocurrency trading.

1. 3Commas Trading Bot

3Commas is a widely used platform among crypto traders, mainly for conducting analysis. The platform offers various tools that can be used to research cryptocurrencies.

CromIn addition, the 3Commas platform has an automated trading bot for Binance. You don't have to worry about security because 3Commas is a well–known platform that thousands of users use. On the Internet, you can find almost only good reviews about this platform.

Before you can get started, you need to create an account with 3Commas. All you have to do is provide your personal details. After that, you can choose the type of bot. There are four different bots to choose from.

After you have chosen a bot, it's time to connect 3Commas to the cryptocurrency exchange that you use. So far, it is possible to link only the Binance exchange to 3Commas. After you have successfully connected the bot to your exchange, it's time to choose cryptocurrencies, and then set a goal.

What gives 3Commas?

You can set your own profitability target. A higher goal means a greater risk of loss. That's why it's important to find a balance between the different options to minimize the chance of loss.

To use this trading bot, you need to subscribe to 3Commas. Prices for different subscription types are listed below.

What are the advantages of 3Commas?

• 3Commas is a well-known platform, it has many users;
• in addition to the trading bot, you can also use all the other tools that 3Commas offers;
• creating an account and connecting your exchange to the bot is very simple;
• you can set the profitability yourself and determine the risk you want to take.

What are the disadvantages of 3Commas?

• so far, you can only link Binance to the trading bot;
• you need a subscription to use cryptobot.

See also what brokers there are with Bitcoin trading.

2. Trading bot Shrimpy

Shrimpy is a cryptocurrency trading bot that offers three different tariff plans.

Creating an account is pretty fast. Then you will need to link the trading bot to the cryptocurrency exchange. 16 crypto exchanges are supported, including Binance, KuCoin and Coinbase. We recommend visiting the Shrimpy website to find out the current list of supported crypto exchanges.

After you have successfully established a connection between the exchange and Shrimpy, it's time to set a goal. It works the same way as with other bots.

From a security point of view, Shrimpy is very good. It uses advanced techniques to ensure the safety of its users. You can also set up 2FA so that only you can access your account.

You can also use social trading. This is a unique feature of Shrimpy. With the help of social trading, you can follow the trading strategy of the most successful crypto traders.

What are the advantages of Shrimpy?

• easy to use;
• available subscriptions;
• social trading;
• user-friendly interface.

What are the disadvantages of Shrimpy?

• no cryptographic signals;
• using this bot costs money.

See also what brokers there are with Ethereum trading.

3. Coinrule Trading Bot

Since 2017, traders can use Coinrule as a bot for cryptocurrency trading. Coinrule was founded by a group of crypto traders. These people have gained a lot of experience in the world of cryptocurrencies and blockchains in the past, and therefore they know what they are doing.

The platform is mainly designed for advanced crypto traders. It offers various options for which you need some knowledge about cryptocurrencies. Without this knowledge, it will be difficult to successfully use Coinrule.

Creating an account is quite simple. Then you will need to link the cryptobot account to your exchange via the API. For Coinrule, you can use Coinbase Pro, Binance and Kraken.

In the past, the cryptocurrency trading bot Coinrule achieved high incomes. There is a calculator on the site with which you can view the profitability for the last year. We see that last year it was possible to achieve a yield of 200%. Of course, this is not a guarantee in the future.

Before you can use Coinrule, you first need to subscribe. The standard version is free, but doesn't offer many features.

What are the advantages of Coinrule?

• Coinrule is easy to use and ideal for people who are already familiar with cryptocurrencies;
• you can use the free version if you want to invest up to $3000;
• You can link Coinrule to Binance, Coinbase Pro and Kraken.

What are the disadvantages of Coinrule?

• if you are not well versed in cryptocurrencies, it is better not to use Coinrule;
• traders who want to invest a lot of money will have to purchase a paid subscription.

How to choose a bot for cryptocurrency trading?

There are a lot of good and bad bots on the market, so it is important to know how to choose a trading bot to avoid fraud. Here we will reveal the relevant criteria that you should consider before choosing a reliable trading bot:

1. View different bots. First, you should pay attention to the numerous reviews of bots that you you can find it on the Internet, as well as on the services offered by this trading platform. Always do this for multiple bots, not just one.
2. Check who is the broker. Secondly, it is important to check whether the bot is associated with a well-known and regulated broker. This will reduce the risk of fraud or identity theft.
3. Beware of the profitability indicators that the company promises. Some trading bots claim to guarantee success of about 98%, in practice this is impossible.
4. Learn more about cryptocurrency trading. Finally, it is necessary to have some basic knowledge about cryptocurrency trading, even if the trading bot automatically performs operations.

Unfortunately, many traders lose their invested money due to the dishonesty of the providers of bots for trading cryptocurrency. The question is how to recognize a scam with trading bots. First of all, you should take a look at the huge offers that the sites offer you. For example, when a trading bot claims that its winning percentage is 100%, it sounds too good to be true, and besides, it's impossible. In that case, it's definitely a scam.

Read also the article"How to make money on the fall of bitcoin?".