### Cryptocurrency trading bots are just software programs that are designed to manage your crypto trades.
These programs use algorithms to interact directly with crypto exchanges. They interpret the available market data and place buy and sell orders for users according to the predefined and pre-programmed rules.
A crypto bot makes its decisions based on analyzing various market actions like the trade volume, the number of orders placed, prices and so on. However, these parameters can be reset to one’s tastes and preferences.
When it comes to the type of bot to use, traders have three options. They can use third party bots where they pay a fee, and they get licensed to them. They can also use free bots that can be accessed through open source platforms and finally for the trader who is technically adept they can create their own bot.
## Table of Content
- How Crypto Bots Work
- Cryptotrader
-Advantages
-Disadvantages
- Gunbot
-Advantages
-Disadvantages
- HaasBot
-Advantages
-Disadvantages
- 3Commas
- Zenbot
-Advantages
-Disadvantages
## How Crypto Bots Work
Usually, crypto bots work by interacting with the APIs of different crypto exchanges. They interpret the information and then trade on behalf of the users. These software’s collect data on market action including the number of orders placed on different exchanges, price changes and the amount of volume that has been traded over a specified period.
Bots have many advantages. First, they can monitor the crypto market and trade 24/7 on behalf of their users even when these individuals are away from their machines. Secondly, they lack human emotions.
One shortcoming of human traders is emotions. For example emotions like fear and greed can make individuals give up good trade positions.
So, crypto bots work by reacting to the ongoings of the cryptocurrency market. They gather data and use it to execute a trade by analyzing a particular exchange. However, given that there are factors like news that influence cryptocurrencies but they cannot be integrated into bots, many work by using the exponential moving average (EMA) (as the start point for analyzing the market)
EMA can be used to track the price of an asset over some time. Therefore traders can easily programme their bot to monitor and also react to what happens to the price – for example, if it moves beyond a certain threshold.
So, traders can easily set their thresholds to match their risk appetites. The only downside to EMA is that it uses data from the past for analysis to predict future outcomes which sometimes can be very unreliable especially in the cryptocurrency market that is rife with volatility.
Now that we understand how bots work let’s have a look at five of the best cryptocurrency bots in 2019.
## Cryptotrader
Cryptotrader is a cloud-based crypto trading bot. It doesn’t require users to install its software on their machines as it’s fully automated. It has and remains one of the most popular bots among traders. It works on almost all crypto exchanges and also allows users to buy and sell strategies.
## Advantages
- The bot always alerts users of trades no matter where they are. This is done through SMS notifications and email alerts.
- It supports all the major crypto exchanges
- It supports backtesting- a process that involves running a set of rules on past market data to find out how the bot would have performed. An experienced trader can always identify similar market conditions and use the winning strategy to his/her advantage
## Disadvantages
- It’s quite expensive
- It’s not beginner friendly.
## Gunbot
Gunbot is one of the most advanced crypto trading bots available in the market in 2019. It’s a locally installed software that automatically executes trades for users on many of the top crypto exchanges. The software runs on macOS, Windows, Linux and even on a Raspberry Pi.
It utilizes individual strategies that can be customized and adapted to a user’s trading style.
## Advantages
- Access to free customer support.
- It supports over 32 different trading strategies.
- Users can integrate the Tradingview option – the world’s leading technical analysis platform.
## Disadvantages
- It’s expensive, and its price depends on the cost of Bitcoin.
## HaasBot
Haasbot is a crypto trading bot that employs artificial intelligence (AI) algorithms on the cryptocurrency market and then places trades automatically.
AI algorithms help the bot to analyze market trends faster than a human trader and execute trades on behalf of the user. The bot is owned by HaasOnline Software, a company that was set up by Stephan de Haas who is a Dutch software engineer. It was initially released in 2014 and this year will see Haasbot 4.0 hit the market.
## Advantages
- It supports all the major exchanges and also keeps adding new platforms regularly.
- There are no hidden fees. The bot doesn’t charge extra fees regardless of the number of trades placed.
- It has proprietary automated safeties and insurances that protect the capital of the traders.
- It supports backtesting.
- It can use technical indicators like MACD, RSI and Fib retracements that help users find low risk-high reward trades.
## Disadvantages
- It’s not beginner friendly
- It’s quite expensive.
## 3Commas
It’s a popular crypto bot that works exceptionally well on many top exchanges, e.g. KuCoin, Bitstamp, Binance, Bittrex, Poloniex, BitFinex, YOBIT, Huobi, and GDAX. Since it’s a web-based software, a user can monitor their trades from their mobile phone, laptop, and even desktop.
It allows users to set stop-loss and take profit targets. It also has a feature that allows users to copy the actions of the most successful traders.
3Commas also has an ETF-like feature that enables users to create, analyze and also back-test a portfolio. Users can also make choices based on the best performing portfolios that have been created by others.
## Zenbot
Zenbot is an open source crypto trading bot. Users can download it and modify its trading algorithms to their liking. It’s even possible to fork your own product by editing the source code.
## Advantages
- Can be configured to set sell stops and buy stops and also trailing profit stops.
- Supports backtesting
- Supports multiple assets and crypto exchanges.
- Supports high-frequency trading which is characterized by super-fast speeds.
- Its API keys don’t need deposit or withdrawal permissions.
## Disadvantages
- Not beginner friendly
- Not updated often.
*In conclusion*, crypto bots are useful to cryptocurrency traders as many individuals are unable to dedicate enough time to analyze markets. By employing bots, users can establish efficient trades without having to keep tabs on the markets at all times.
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