While the earning power from cryptocurrencies is very strong, the volatility and 24/7 nature of cryptocurrency means that fluctuations can happen at any time, within a very short period of time. This means that if crypto traders rely solely on manual trading, their earning power (or even power to limit their losses) may be negatively affected.
Having noticed this limitation, crypto companies have sparked a new trend that has hit the shores of crypto trading – crypto bots. Crypto trading bots are typically extremely advanced, automated, and data-driven; and can help you do your trading when you’re busy doing something else or even catching up on your sleep. Such bots help to automate trading so traders will have time for their own life, be it research, work, business, or family; hence, many investors use these bots to take advantage of the crypto market which never sleeps.
To better illustrate this, here are some of the main types of bots within the crypto trading industry:
- Arbitrage bots
- Trend Trading/Technical Trading bots
- Market Making Bots
Arbitrage bots
Arbitrage bots examine prices across exchanges and look to take advantage of the price discrepancies across them, making trades accordingly. This works as the price of a cryptocurrency can vary from exchange to exchange, so bots can typically move faster than humans and beat exchanges that were delayed in updating their prices.
An example of an arbitrage crypto bot would be GTAI Trading Bot, a world-class AI trading plus arbitrage system designed to help crypto traders maximize trading profits while minimizing risks and losses.
Galaxy Trading Analytics (GTA), the leading regulated Fintech company founded in 2022 by a team of AI and Deep Learning experts that created the Bot. They have constructed a clear and transparent system that conducts trading transactions according to the parameters set, and have connected investment tools and financial protection algorithms to it. There are currently 4 proprietary trading and arbitrage strategies implemented, with more trading strategies that are currently being developed and will be added to GTAI once more stringent tests are being done.
Trend Trading/Technical Trading bots
Trend Trading bots analyses the trends of certain cryptocurrencies and executes buy and sell orders based on this analysis. If the asset is trending upwards, the bot will enter a long position; conversely, if the asset is trending downwards, the bot will enter a short position. To determine a trend, bots can use various indicators such as moving averages, price action, momentum indicators, trend lines and so on. Technical Trading bots work similarly, in using indicators and various signals to predict future price movements and hence make a profit.
Some examples of such automated trading bots are 3Commas and Coinrule, where you can do portfolio analysis and copy trading, and various indicators are used to ensure a well-informed decision is made.
Market Making Bots
Market Making bots function quite simply – they place multiple buy and sell orders to for users to get quick gains. For example, if an asset is currently trading for $10, your bot could create a buy order for $9.90 and a sell order for $10.10 in order for you to make a quick profit. Market making bots generally help users to prevent large swings in price and make small quick profits, by making both buy and sell limit orders near the current market prices.
An example of a market making bot that has been around for a while is Haasbot from HaasOnline, but many market-making bot traders are often associated with their crypto trading projects so you can do further research on them.
In summary, with how active the crypto market is today, it is impossible to make the same gains and have a life outside of crypto if you’re only using manual trading. Based on your needs, you’ll definitely find a crypto bot that’s relevant for you and will help you save time and increase your earnings from crypto trading!