For quite some time now, humans have been ultimately dedicated to the pursuit of automation in all of its various, dynamic forms. In fact, from the ancient Sumerian invention of the wheel to Leonardo da Vinci’s proto-helicopter model, the human species has always been deeply inspired and thoroughly fascinated by the mechanics of technological advancement and automation.
Two of the most pertinent examples showcasing this sentiment are the First and Second Industrial Revolutions. This is because both these historical époques were fundamentally characterised by a sustained level of mechanical development, enhanced engineering structures and true innovation, all in the name of progress and industry.
To some extent, the same thought process can be applied to our current, blockchain-enabled digital asset economy. Indeed, it is compelling to analyse the parallels that have been drawn between the financial revolution spearheaded by Bitcoin and Ethereum and the forthcoming, somewhat inevitable 4th Industrial Revolution.
Blockchain, in fact, has long been defined as the pillar of the new digital, financial and, with NFTs, even artistic layer in societal economies. Its innovative distributed ledger technology (DLT) allows for the creation of intricate monetary paradigms that inherently go well above the established economic frameworks of the traditional financial system. Furthermore, the digital asset sphere has come such a long way since its inception, progressively architecting new models and conceptualising some of the most electrifying value propositions and FinTech designs.
Consequently, in a similar fashion to the way the Industrial Revolution sought to automate manual labour with mechanical, automated processes, crypto has also integrated a technological framework that enables traders and investors to automate much of their on-chain operations. This aforementioned system primarily relies on robots, commonly referred to as bots, to execute transactions, trades, as well as buy and sell orders in a completely hands-free manner.
The implementation of trading robots, or bots, is by no means a structure native to the crypto economy. In fact, a variety of platforms have reported that 70-80% or more of shares traded on U.S. stock exchanges come from automated trading systems. This is primarily due to the fact that traders and investors can turn precise entry, exit and money management rules into automated, robo-driven trading systems that allow computers to execute and monitor trades.
The trade entry and exit rules can be based on simple conditions such as moving average (MA) crossovers, oversold-overbought Relative Strength Index (RSI) levels, volume-weighted average price (VWAP) or MACD indicators, or they can implement more complex strategies that require a comprehensive understanding of the programming language specific to the trading platform used by the trader.
Thus, while automated trading systems first made their appearance in the more traditional FX and Stock markets, the demand for trading robots in the incredibly fast-paced cryptocurrency market has skyrocketed over the course of the years. This should indeed come as no surprise as crypto market structures primarily thrive on assets that are by their very nature hyper-volatile, meaning that traders can leverage the pre-established set of rules ingrained into a robot to maximise trade execution in the most efficient way possible.
So, without further ado, let’s dive into the top, most widely adopted crypto trading bots.
Cryptohopper is a crypto trading robot that aims to simplify the overall process of crypto asset trading and helps users of all experience levels to make the most out of different trading opportunities in the market. In parallel with a few other crypto trading robots, Cryptohopper seeks to empower traders by providing them with a user-friendly, fully featured service that allows its users to seamlessly execute trades on multiple crypto asset pairs while removing the bottlenecks of human intervention.
The primary focus of this trading bot is to facilitate the process of investing in the dynamic crypto space and benefit from the most profitable trades and market plays, both long and short-term.
The Cryptohopper platform in itself is rather intuitive and allows investors to automate their investing processes, copy professional traders, set signals and alerts through their mobile app or more directly through the Cryptohopper platform. These features essentially enable investors to stay on top of the market no matter which coins they trade, which exchanges they use and where they travel.
According to the Cryptohopper website, the proprietary crypto trading robot was developed by two brothers, Ruud Feltkamp and Pim Feltkamp, who decided to merge their expertise, skills and passion for the crypto space to create a bot that trades automatically for the user, operates on a 24/7 basis, implements a variety of token pairs, while also being compatible with a number of digital asset exchanges via an in-house Application Programming Interface (API).
The official site houses the semi-automated trading bot that allows traders to remove human tendencies and emotions from the trading process and rely instead on purely technical based trading algorithms and programmed trading approaches.
Cryptohopper offers a wide array of trading features on its platform, including:
- Automatic Trading
- Exchange Arbitrage
- Market Making Bot
- Mirror Trading
The Automatic Trading feature, specifically, is perhaps the most sought-after application on the platform, as it allows traders to either leverage some of the ready-made automated trading strategies built in the bot or even deploy their own personal trading strategies by programming them into the robot. This automated trading methodology has mostly proven to be rather beneficial for those investors who either don’t have the time to stare at charts all day waiting for the perfect entry or simply aren’t experienced enough to execute trades on their own accord.
In terms of pure functionality, Cryptohopper operates as a web-based solution and features an easy to use User Interface (UI) that includes a wide range of functions. Users can configure the bot to trade automatically 24/7 and make use of both algorithmic and social trading, for instance.
Trading strategies can be derived via various technical indicators or by following the actions of third party trading experts. Furthermore, the platform provides a good range of trading tools and incorporates features such as a bot backtesting tool, configurable and saveable templates, trailing stops, and customisable technical indicators. Users can also rely on popular TA indicators such as Stochastic, RSI, Bollinger Bands and MACD.
For instance, if the bot is operating in a potential bull market, traders can use the trailing stop loss and take profit features to secure profits and protect themselves against any losses. In essence, this allows traders to exit the market when an eventual correction takes place or exit the market when a specific price target is hit, enabling them to automatically incorporate a risk management strategy into their trading activities.
If, on the other hand, the markets decide to take a turn for the worse, Cryptohopper users can instruct and pre-program their robot to fully prepare by exiting a trade at the first glimpse of a downtrend. Alternatively, depending on the exchange used, traders can also instruct their bot to engage in short selling.
In addition, the Cryptohopper platform incorporates a support team that is available to deal with any issues users may encounter when utilising the crypto trading bot. Users can contact the team by submitting a support ticket in the Support Section and they may also get in touch with them directly via Twitter, Facebook or Telegram. The Cryptohopper website also contains a number of FAQs in the Support Section, as well as a number of Tutorials that help users to navigate the platform.
Programming the Cryptohopper Bot
As with the majority of crypto trading robots, bots can only be as good as the individuals programming them. This means that, because the bot is pre-programmed to follow specific rules in pre-determined conditions, a weak strategy will almost certainly cause losses. In terms of design, the way these crypto trading robots work is actually pretty similar to the ‘IF-THEN’ function found in Microsoft Excel. The ‘IF’ component of the equation is the market trigger, whereas the ‘THEN’ is what the automated bot should do when the trigger is activated.
For instance, let’s assume that the market trigger is Bitcoin breaking 50k. To be certain that the pricing target is broken convincingly, a user could set the market trigger at $50,100, which would activate the ‘IF’ element of the equation. A trader would then need to pre-program the bot to execute a specific trade at this level, representing the ‘THEN’ component of the equation. This not only enables traders to better gauge the potential direction of the market but it actually gives them an extra layer of confidence and security. This is because, quite frankly, no one really wants to end up like this guy here below!
At this stage, a trader could instruct the automated bot to engage in a trailing stop loss whereby the bot purchases say $500 of BTC every time it increases in value by 5%. At the same time, the bot can be programmed to adjust stop loss orders autonomously, so that when the price of BTC decreases by 5% at any given time, the bot can close the trade immediately.
Another valuable feature offered by Cryptohopper is its marketplace, which is an area containing a variety of different automated trading strategies pre-designed and pre-built by other traders.
While many of the pre-programmed crypto trading strategies can be obtained for free, some come at either a monthly or one-time-fee cost.
As with any crypto trading bot, however, it is important to note that even if the bot has demonstrated an extensive winning streak of trades, users should always exercise caution and some form of due diligence before even thinking about purchasing one. In fact, bots can be an incredibly powerful tool but there is nevertheless no guarantee that you’ll be able to profit when using one.
Now, let’s briefly discuss how the Sign-up process works for Cryptohopper.
Cryptohopper Account Signup
Creating an account on Cryptohopper is a very straightforward process. First of all, the main thing that you’ll need to do is :
- Head over to Cryptohopper.com
- Enter a name, email address, user name and password to register.
- You can then confirm your email account by clicking the activation link in the email sent, and gain access to the dashboard.
- From here you can simply follow the wizard as it will help you to quickly configure your Cryptohopper. You just need to select an exchange and configure the bot via your preferred exchange’s API keys and also set up basic hopper configurations. The process is very straightforward and there are links to tutorials and additional useful information on each step.
- From here you can immediately start using your hopper, and once you have used the wizard and set up your account, you will be able to access a host of features from the dashboard. You can subscribe to signals, configure templates, and begin back testing your bot, as well as set up two factor authentication on your account.
- And you’re all set!
3Commas is a cryptocurrency trading platform designed to help users build automated trading bots. As of September 2021, 3Commas is considered to be one of the most successful and widely adopted crypto trading bots with over 33,000 regular users and over $10 million in trading volume each day.
The 3Commas platform is relative intuitive to use, making it a great solution for users trying to get acquainted with the process of automated crypto trading as a whole, as well as catering to more veteran, sophisticated traders.
In addition, 3Commas works with 23 major crypto exchanges and offers a spot trading interface that adds risk management tools to manual trades.
3Commas Smart Trading
3Commas leverages its own in-house Smart Trading system designed to facilitate the process of crypto trading and create the most comfortable, user-friendly, seamless automated bot experience for its users. At first sight, the Smart Trade interface aesthetically resembles the trading interface one might expect from an online FX trading platform or brokerage, expect that it’s primarily geared for crypto trading.
With Smart Trade, users can buy or sell pairs of digital currencies using a few essential risk management tools. First, users can set market or limit orders, and even set a price conditional that must be met before a market or limit order is subsequently triggered. Users can also set trailing buy or sell orders, which allow them to repeatedly purchase or sell an asset pair once a specific price condition is triggered.
Another key advantage offered by Smart Trade is the ability to add stop loss and take profit levels to every trade, a feature that many crypto CEXes don’t allow.
Dollar Cost Averaging (DCA) Bots
As you might have guessed, the main attraction of 3Commas is the platform’s trading bots. Out of the three main bots designed by the platform, two are primarily centred around dollar cost averaging, or DCA in short.
The Gordon bot is a largely pre-made bot that users can program to run in just a few seconds. All one needs to do is decide how much capital to deploy to the bot, which exchange to run it on and select the desired strategy between conservative, moderate or aggressive.
The Gordon bot offered by 3Commas implements the popular QFL trading strategy, which looks for potential dead cat bounces. A conservative strategy, instead, will wait longer for additional price drops before executing a trade, whereas a more aggressive strategy will enter trades at the first sign of a price bottom. Furthermore, it is important to note that the Gordon bot, by default, runs on all asset pairs available on the exchange it is connected to.
In addition to the Gordon bot, 3Commas offers an Advanced bot that is a more customisable dollar cost averaging (DCA) trading robot. The Advanced bot allows traders to choose from a variety of trading strategies, including QFL and scalping, or connect a TradingView account to interface personalised trading signals. With the Advanced bot, users can also decide whether to make it a simple, one asset pair bot or a composite bot monitoring multiple asset pairs at once.
3Commas GRID Bot
The GRID bot is 3Commas’ newest automated trading robot and it works by subdividing a technical price chart into slices. Each one of these slices covering a range of prices is assigned a specific buy and sell signal, and when the currency’s price crosses into a new slice, the GRID bot will automatically buy or sell based on the signal assigned to that particular slice.
One of the major advantages that come with the GRID bot is that users can either determine slices and their respective price signals automatically via the AI settings, allowing for a more automated trading experience, or they can set their preferred slices manually. For instance, if users decide to set up the bot manually, they can decide the price levels of the maximum and minimum slices and the price range covered by each slice.
Overall, the GRID bot has proven to be particularly useful for stablecoins, which typically trade in a sideways range since they are meant to keep a roughly constant value relative to another currency.
3Commas offers four different plans, with these being Free, Starter, Advanced and Pro.
- The Starter plan costs €14.50 per month and includes the Smart Trade manual trading terminal, but limited use of automated trading bots.
- The Advanced plan costs €24.50 per month and adds simple bots, which are able to open trades on only one coin at a time. If you have a separate TradingView account and create custom trading signals through that platform, you can also import them to 3Commas with an Advanced plan.
- The Pro plan costs €49.50 per month and includes composite bots, which enable you to open trades on multiple cryptocurrency pairs rather than only on a single pair. In addition, Pro users can connect to the Bitmex, Binance Futures, ByBit, FTX and Gemini exchanges for automated cryptocurrency futures trading.
Of course, you can try out 3Commas before committing to the platform with a three-day trial of the Pro plan with no credit card required. After all, it’s Guy approved!
Gunbot is yet another popular crypto trading robot that allows users to perform automated trading of a large selection of asset pairs across the cryptocurrency market.
Gunbot comes with a built-in browser interface, and users can safely access the interface on their local machines or open up access from the web. The interface is optimised for mobile devices, supports two factor authentication (2-FA) and can be served via https. Additionally, Gunbot is compatible with Mac, Windows, ARM and Linux, essentially allowing traders to run it on pretty much any device.
Just like with Cryptohopper and 3Commas, traders using Gunbot can create their own trading strategies or leverage any of the ready-made ones available through the platform. However, Gunbot differs from the two mentioned above in that it doesn’t operate on a monthly-fee-based subscription model but it allows users to purchase its automated crypto trading services with a one-time fee.
In fact, all plans are life time with no recurring costs, a major advantage for those users looking to utilise the platform long-term. These one-time plans can be purchased with Bitcoin, various sets of altcoins, stablecoins and even through PayPal.
The process of using Gunbot is rather straightforward and entails:
- Selecting your desired plan.
- Downloading the software and launching it.
- Choosing your log-in details.
- Setting up your API Keys for the exchanges which you want Gunbot to operate on.
- Setting up your trading strategy by either choosing a preset or customising parameters to your liking.
- Picking the trading pairs which you want to trade.
- Allowing Gunbot to begin trading based on those specifications on a 24/7 basis.
Gunbot Features and Trading Strategies
Gunbot supports some of the most popular digital asset exchanges, including Binance, Binance Futures, Bitmex, Bybit, Coinbase Pro and Kraken, and many more. When it comes to trading, Gunbot strategies can be assigned to one or more trading pairs. Moreover, the platform comes with a variety of free trading presets, which are ready to be used after making some minor adjustments, such as regulating and configuring how much the trading bot is allowed to spend for trade, for instance.
Users can create an unlimited amount of custom strategies, including ones specially adapted to both spot and futures trading. On futures, for instance, users can choose between mean reversion or trend following variants of individual strategies, and they may also incorporate trailing strategies to maximise profit from any given position. Every strategy can use a number of protections, such as setting custom gain and stop limit values, limiting the number of sell orders before trading is halted and preventing buy orders above the last sell rate to protect against buying in a surging market.
Confirming Technical Indicators
To refine a specific trading strategy, users can configure confirming indicators to activate buy and sell orders exclusively when pre-determined conditions are met. For example, traders can configure their bot to execute a buy order when the Relative Strength Index (RSI) crosses below the 30 zone and execute a sell order whenever it crosses above 70.
For its set of confirming indicators, Gunbot implements:
- EMA Spread
- Stoch RSI
- Additional Indicator combinations via AutoConfig.
Back Testing Add-On
Another valuable feature offered by Gunbot is the ability to back test strategies on the popular trading/charting platform TradingView. The back testing add-on allows for back testing of almost all strategy parameters available in Gunbot. It can also be used to send alerts based on Gunbot strategies to be executed by the bot with the TradingView add-on.
Strategy back testing takes place directly on TradingView.com, which offers a powerful engine to back test and visualise tested trading performance. As long as TradingView.com supports the exchange a user is trading on, historical data for back testing is available for almost every available asset pair on the exchange.
Overall, Gunbot offers all the bells and whistles that you would expect from a crypto trading bot. It offers an excellent user experience as well as a suite of tools to develop and execute automated trading strategies. Whether you’re a beginner or an advanced trader, you could add Gunbot to your trading arsenal and use it to efficiently implement your favourite trading strategies.
Over the course of the last few decades, traders have consistently been on the lookout for the most profitable, most performant trading strategies enhanced by automated technologies.
Emerging first in the more traditional Stock and FX markets, and progressively moving into the more dynamic digital asset space, automated trading systems, commonly referred to as bots, have firmly established themselves as the go-to solution for many retail and institutional traders alike.
This should indeed come as no surprise as crypto market structures primarily thrive on assets that are by their very nature hyper-volatile, meaning that traders can leverage the pre-established set of rules ingrained into a robot to maximise trade execution in the most efficient way possible, and gain access to some of the most sniper-like market entries and exits.
The automated trading robots analysed in this piece all present users with top-notch applications, cutting-edge functionalities and highly desirable use cases, allowing traders to increase their profit potential as well as their trading sophistication.
Ultimately, the introduction of automated trading systems in the incredibly fast-paced digital asset sphere constitutes a fascinating development and it has thus far proven to be a massive success. While there are most definitely advantages that come with using crypto trading robots, it is however of utmost importance to emphasise the fact that, firstly, profits from bots are NOT 100% guaranteed and, secondly, that sustained levels of risk management and protection measures are required regardless of the bot’s historical performance.
Disclaimer: These are the writer’s opinions and should not be considered investment advice. Readers should do their own research.