As crypto trading trends and strategies change daily, many chatbots are emerging to teach and discuss the latest trends in crypto trading. These bots are computer programs that automate a function across multiple crypto exchanges or other platforms.
Types of Trading Bots
The functions of each bot vary depending on the different plans you choose to trade with. These bots could also buy and sell at the price points you set or invest in different assets using different currencies. There are many different bots based on crypto trading.
They are as follows:
1. Trend Trading Bots
Trend reading bots are used to analyze the old prices of commodities to identify and find new trends and patterns. These bots aim to take advantage of upward or downward price movements by entering long or short positions. This bot will be useful in markets with clear trends and can generate profits.
2. Mean Reversion Bots
This bot works on a specific principle. This bot is fed by the concept that prices tend to revert their mean or average value over time. These bots are effective in markets with frequent price fluctuations and are often used to trade range-bound assets.
3. Scalping Bots
Scalping bots are best for small traders or people who invest only a small amount of money trading. This bot takes advantage of small price movements and variations and executes trades within seconds. These require low latency and high trading volumes to be fully functional.
4. Margin Trading or Leverage Bots
Margin trading allows traders to amplify their trading positions by borrowing funds from the exchange. This enables traders to take larger positions with smaller capitals. This has huge risks involved though. So it is in the investor’s hands as to whether or not to take the leap.
5. Market-Making Bots
Market-making bots place both buy and sell at pre-defined levels to provide liquidity. These bots help investors profit from the difference between their selling and buying prices. This is known as spread. This works best on commodities where the fluctuations of price are minimal.
6. Arbitrage Bots
Arbitrage bots work by taking advantage of the price differences between different exchanges. This bot, like Trend Trading Bots, buys low and sells high which makes a profit. For this to be practical, this requires fast action and access to multiple exchanges.
7. Coin Lending Bots
This bot enables them to lend their cryptocurrencies to others in exchange for interest payments. This bot also has the facility to connect lenders and borrowers. This provides an alternative way to generate passive income from currency holdings.
8. AI Trading Bots
AI trading bots use machine learning and AI algorithms to analyze the market with vast amounts of data. These bits learn continuously and make decisions accordingly. This bot is effective in markets with complex patterns and high-frequency trading.
9. Quantitative Trading Bots
These bots use statistical and mathematical models to identify trading opportunities and analyze historical data and other factors to make trading decisions. Quantitative trading bots work best for professional traders and it also requires advanced programming skills to give the data required.
10. Algorithmic Portfolio Management Bots
Algorithmic portfolio management bots are used to manage crypto portfolios as they automatically rebalance the portfolio based on predefined criteria ensuring optimal asset allocation. This bot helps save time and effort for the traders by automating the portfolio process.
Comparing Different Crypto Trading Bots
| Bot | Cost | Strategy Used | Suggested For |
| Shrimpy | Free, Standard($15/month), and Plus($39/month) | Portfolio rebalancing, backtesting, social trading | Beginners |
| Kryll | Prices may vary based on trading volume | No code trading Bots, bot marketplace | Beginners |
| 3Commas | Free, Pro($37/month), Expert( $79/month) | Selling by multiple targets, trailing stop loss tool | Beginner to Advanced |
| Gunbot | $199 to $499 | Service-based trading bots | Advanced |
| Immediate Edge | Free | Customizable boosting investments | Beginner to advanced |
| Quantum AI | Free | Leverage-based schemes and customizable strategies are available | Beginner to advanced |
| Pionex | Free | Free crypto trading bots | Beginner to advanced |
| Trade Santa | Basic($25/month), Advanced ($45/month), Maximum ($90/month) | Customizable bot with long and short strategies | Advanced |
| HummingBot | Free | Professional liquidity providers and market makers | Advanced |
How To Choose the Right Crypto Trading Bot?
Investors have several techniques under their sleeves when choosing the right bot. While choosing a crypto trading bot, make sure it is legit by checking its dependability, security, and customer support. Choosing a bot that goes with your strategy and goals is also important. As this is a bot, even though you could customize it, it takes a lot of time and effort to do it, so it is way better to choose one among thousands of bots that align with your idea of making profits.
Investors could do this by researching different providers and comparing them with other bots before making a stern decision. Several bots also tend to charge a fee or take a percentage of your profits, take that into consideration too.