All You Need To Know About Crypto Trading Bots

by Asheen Chowdhury  |  August 4, 2021

Ever since Arnold Schwarzenegger played the indomitable Terminator back in the ’90s, we’ve known that the robots are coming. But the change hasn’t been quite as eyeball grabbing as we imagined. Deep Learning, Machine Learning and Artificial Intelligence [AI] are definitely changing the world, but in more subtle ways than you’d imagine.

It’s not just traditional industries either. We’re here to tell you about how deep learning is pushing the envelope in an already cutting-edge space Cryptocurrency.

Ever heard of a bot trading Crypto? Well, they exist, and in a survey conducted by leading Cryptonomist Adam Cochran, bots accounted for 86% of the total money moved in Crypto trades amongst those surveyed.

While this was based on a relatively small sample study, Crypto bot trading is definitely gaining traction among new traders and those who don’t want to invest time in crunching the numbers themselves. 

Many of these bots are highly customizable and users can program based on their long or short term investment plans. To give you a better idea, let’s take a look at some of the types of Crypto bots that are out there.

Types of Crypto Trading Bots

Arbitrage Bots

The most popular type of Crypto trading bots is arbitrage bots, which examine and compare price differences across exchanges and then cash in on price discrepancies.

These bots work on the premise that exchanges can often take some time to catch up to the market price, given the high volatility of the Crypto market. However, the returns from arbitrage bots can be marginal and are often dependent on high initial investment.

Invest In Crypto With Just Rs.100

Social Trading

There are so many Crypto trading bots, that they even have social networks for them! Social Trading bots are algorithms that are listed on exclusive social trading platforms.

Once you join, you can automate your entire portfolio management process. All you have to do is pick and choose from established algorithms that can crunch historical data to come up with unique trading strategies.

These social platforms have curated lists of the most successful trading algorithms while providing features to ease communication and networking between traders.

DeFi Bots

Decentralized Finance (DeFi) is the next economic revolution waiting to happen. There are a number of DeFi Cryptocurrencies out there that are enabling peer-to-peer money and service exchange while bypassing traditional banking systems.

DeFi trading is a different ball game altogether due to the relative stability of the coins and complex use cases. Defi bots help individuals maintain a strong portfolio, with an automatic rebalancing of assets triggered by technical developments within the DeFi sector.

Here’s a look at some of the top DeFi coins in the market right now.

Advanced Bots

This is the realm of professional Crypto traders who have honed their skills to a legendary level. Advanced bots are highly customizable interfaces that allow you to add or edit existing algorithms and develop new ones.

These platforms are used by traders with immense knowledge of the market and crypto bot trading to develop highly sophisticated automation strategies.

Advanced bots are not even close to your singular algorithms, but are more of an amalgamation of different bots that the user has picked and chosen to combine.

Should You Let The Crypto Trading Bots Take Over?

When it comes to trading, there are some things that bots just can’t do. In a market as volatile as Crypto, it becomes difficult to accurately predict market movements, even for a machine.

The major problem that Crypto bots were devised to solve is the issue of time and awareness. Sometimes people may lack the time to actively monitor the market. Given the fact that nobody knows when prices can dip or rally means that having an automated solution in place is a great strategy to avoid taking a loss or boost up profits.

 

However, handing over your entire portfolio to a Crypto bot can sometimes be counter-productive. As a beginner or intermediate trader, you still need to put in significant time and effort to finetune your bot to meet your specifications. You’re also left unsatisfied when the market moves in ways your bot fails to pick it up.

The best bots out there also charge a fee, either monthly or one time. It’s almost like hiring a robot broker and letting it do all the hustling for you, which is probably not the best idea for those who are just getting into Crypto.

The Easy Way Out

A much more viable alternative for the majority of traders is limit orders, an option that is growing increasingly popular among the top Crypto exchanges in India.

CoinSwitch Kuber helps you automate your transactions with the power of limit orders. Our limit orders help you stay on top of market movement to buy and sell Crypto at your preferred price.

It’s pretty simple too. All you have to do is analyze the market and figure out a price that your selected coin is likely to hit in the coming week, month or year. Then you place a limit order and we automatically execute it for you when the market price reaches your specified buy or sell price.

P.S: KuberVerse is an educational initiative. Anything expressed here directly or indirectly is not investment advice. And we ask you to do your own research before investing.


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