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10 Crypto Trading Bots Compared in 2022 | Finder Canada

Started by Bitcoin, Sep 16, 2022, 04:53 am

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10 Crypto Trading Bots Compared in 2022 | Finder Canada

Compare and learn about crypto trading bots.
Your guide to the benefits and risks of automating your crypto trading with a crypto bot.
In this guide.
How To Buy.
Cryptocurrency markets are famous for their volatility, which presents a lot of opportunities. Crypto trading bots are designed to leverage these opportunities better than a human could alone.
Need help choosing a crypto trading bot?
Find which cryptocurrency trading bots best suits your needs.
Disclaimer: This information should not be interpreted as an endorsement of cryptocurrency or any specific provider, service or offering. It is not a recommendation to trade.
Learn more.
Let's take a look at what crypto trading bots can do, what they cannot do, and what to consider if you're thinking of using one.
Compare some of the world's most popular crypto trading bots side by side so you can see the differences and find the one that's best for  Kucoin you.
Want to keep it simple? You could try a pre-programmed crypto bot.
Want more advanced options? You could try building your own cryptocurrency trading bot.
How crypto trading bots work.
Trading bots are computer programs that log in to cryptocurrency exchanges and automatically make trades on your behalf.
How good they are depends on how they're programmed, and how suitable their programming is to current market conditions.
There are many different kinds of bots to suit different market conditions and individual needs. Different types of bots are known as different strategies.
For example, "scalping" is a strategy for making small but consistent profits in a sideways market. A "scalping bot" would be designed to automatically place the trades required to shave those profits out of the market. Scalping could be the right strategy for a sideways market, but wouldn't be ideal in a more bullish or bearish situation.
So the first challenge is to know which kind of strategy to use at different times. The second challenge is to find a bot which can effectively execute that strategy based on market activity and signals.
What are signals?
In crypto trading bot terminology, signals are like alarms. For example, someone might craft a signal based on a combination of factors like moving averages, volatility and social media mentions, and when those factors move in a way that's believed to indicate a good time to trade, the alarm is triggered.
Trading bots can be programmed to automatically respond in specific ways to these signals. You can create your own signals or use a third party's signals. And just like bots themselves, some signals are more consistently accurate, while others are more error-prone.
How to get and  crypto trading bot use a cryptocurrency trading bot.
There are two different ways of getting and using a crypto trading bot.
You can either use a pre-programmed one, or build your own.
️ Build your own crypto trading bot.
These are bots that you create. You decide which signals the bot will read and which trading actions it takes in response.
Once you've created a bot, the next step is usually to backtest or paper trade with the bot against actual market movements, to see how it fares in real-world conditions before you entrust it with real money.
Building your own bots will always require some trading experience, but it won't necessarily require any technical experience. On the easier end of the scale you can build you own bots with simple and intuitive graphical user interfaces. On the harder end of the scale you'll need to have enough programming know-how to code your bot.
All platforms will let you build and customize your own bots to a certain extent, although the number of tools they provide for doing so will vary between platforms.
 Use a pre-programmed bot.
The other option is to use a bot that someone else has built. These will often be purchasable from the creators, and some platforms include bot marketplaces for people to buy and sell pre-programmed bots.
Other platforms will include a range of their own pre-programmed options, which are included as part of the subscription package.
In many cases bots will only be partly pre-programmed, meaning you won't be able to trade with them directly "out of the box," but will instead need to customize and  kucoin adjust them.
You'll still need to know which kind of strategy is best to use in a given situation,  kucoin trading bot and can often choose which signals to feed it, but will be able to use those pre-programmed bots to execute those strategies rather than needing to build your own.
Copy trade features, such as is found on a platform like eToro, is an example of a trading bot. In this case the bots just automatically mimics other traders. Some platforms will also let you use copy trade bots to get the same functionality on other exchanges.
Choosing a crypto trading bot in 7 steps.
When comparing cryptocurrency trading bots, make sure you consider the following 7 factors at least:
Trading strategy. What strategy or  crypto trade bot strategies can the bot implement? What sort of market data and technical indicators can it analyze and what parameters can you program in? Ease of use. Some bots have pre-programmed strategies set up and ready to go while others allow you to program them however you want so you can implement your own strategy. The right platform for you may depend on your level of trading and coding knowledge, so make sure any program you choose is easy to understand and use. How to make changes. How easy is it to adjust your trading strategy and parameters? Is the bot designed to automatically rebalance your portfolio on a regular basis,  crypto trading bot or is it up to you to make adjustments as you see fit? Cost. Some bots don't charge trading fees but many do. Compare the cost of different options and make sure you know exactly what you're paying for. Longevity. How long has the bot been around? Is it a new program or does it have a long history of successful use? Reputation. Does the bot have a good reputation among the wider crypto community? Check online forums for reviews from other users to see if the bot is legit and if they would recommend using it? Exchanges. While most reputable bots will work with most reputable exchanges, make sure any program you choose will allow you to trade on the exchange(s) you want to use.
Benefits of cryptocurrency trading bots.
Crypto bots can offer a number of advantages over manual trading.
24/7 trading. Unlike stock exchanges with their regular trading hours, global crypto markets are open 24/7. Humans have to sleep eventually, but a bot can keep trading 24/7. With cloud-based trading bots your computer won't even need to be on for the bot to keep working. Fast execution. Cryptocurrency markets can shift extremely quickly, and some opportunities last only seconds. Bots can automatically process and act on information that humans can't. Reduced human error. Manually entering trade details yourself always introduces the risk of human error. By automating trade execution via a bot, this risk is reduced. Just make sure you don't make any mistakes while setting up the bot. Take the emotion out of trading. Effective trading is about having a plan and sticking to it, rather than running with gut feelings. Crypto trading bots take emotion out of the equation and react to pure data only. Ability to diversify. Using a bot can allow you to trade across numerous accounts or try out various trading strategies. This can help you spread risk across a variety of crypto assets. Backtesting. Want to test a trading idea? Use a bot to backtest, which is where you test your strategy using historical market data to see how it would have worked. You can also paper trade, which is when you use a bot to trade pretend money against the markets of today.
Risks of using crypto trading bots.

Source: 10 Crypto Trading Bots Compared in 2022 | Finder Canada

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