Best Crypto Trading Bots: Review For 2023

In traditional markets, automated trading accounts for 73% of all U.S. trading volume. The situation is similar in the crypto market. Using a automated app is not a novelty anymore, and the industry is getting flooded with new solutions.

What Is a Trading Bot and How Does It Work? 

A bot is software that automates technical analysis and interpretation of market statistics. It can execute the buying/selling of cryptocurrency assets without human intervention based on pre-established parameters.

For example, you can set up a bot to buy a certain amount of BTC when its price goes lower than a specified limit.

Advantages of Using Crypto Bots

Here are the main benefits that trading bots bring into speculative activity:

Drawbacks of Using Crypto Bots

Even considering all the positives, you should be aware of the other side of the argument. Below are several disadvantages inherent to most bots:

Types of Crypto Trading Bots

There are multiple ways of automating the trading process - and it gets more complex than just letting bots open/close positions like you would in manual trading. If you want to know what exactly the bot is doing while you’re not there, figure out which type of bot you’re dealing with.

Algorithmic Trading Bots

Algorithmic bots are code-driven programs, the main components of which are a combination of mathematical models, complex formulas, and human oversight. Since they use technical indicators, they are also sometimes called technical trading bots.

Algo trading runs on rules that generate and execute buy and sell signals. They account for variables such as price, time, and volume. And if all of these conditions are met, the bot will be set in action. The decision to buy or sell assets is not the only functionality - but we’ll talk about that later.

Overall, algorithmic bots are the conservative trader’s best friend and the most widely-used type on the market.

Arbitrage Bots

Not surprisingly, arbitrage cryptocurrency trading bots are based on the arbitrage strategy (which we also cover in the later sections). But briefly, it’s the simultaneous purchase and sale of an asset to profit from a price difference.

If you choose this bot type, here is how the process will go. You’ll have a base currency and choose one or several crypto assets that are prone to offer arbitrage opportunities among certain exchanges. Then, you’ll need to connect your exchange accounts and determine how long your positions should stay open on the exchanges configured. The bot will look for such opportunities and place simultaneous orders.

Market-Making Bots

Market-making is a High-Frequency Trading business. This bot provides liquidity by filling up the order book with buy and sell orders and charges a spread. Thus, other market participants can execute their orders at any time. Many market-making bots are affiliated with their trading project to support the efficient exchange of assets.

For example, for an asset trading at around $1, the bot places a buy order for $0.99 and a sell order for $1.01. When both orders get filled by other traders, it generates a profit of $0.02.

Profile Automation Bots

This is a more unique type of bots that doesn’t focus on specific transactions. Instead, profile or portfolio trading software create, obtain, and maintain the portfolio with their preferred diversification level. This is less about active trading and more about automating the tedious process of managing a portfolio of assets.

How to Choose the Trading App - Tips and Basic Criteria

While bots can be different, there are certain points that are important for all bots available in the market today. We used the following criteria in our own research as well:

Our List of the Best Bots

Now is the part you’re probably most interested in - what are the best cryptocurrency trading software out there? Below are 10 great solutions that stand out based on functionality, price, convenience, and other factors.

3Commas

3Commas is a smart trading terminal enchanted with the trading bot feature. It offers numerous bots that you can filter out based on the bot type, profit per day, days running, deal start condition, and exchange.

Features:

The onboarding process may be overwhelming. But once you learn all the controls, the customization options are straightforward. Plus, you can choose between different types of trading bots based on your skill level.

All data is protected through physical measures, such as secure areas, technical measures, such as encryption and secure servers, and organizational and administrative measures. In case of a breach, the service will implement its Incident and Breach Response Plan. Also, 3Commas encourages users to enable 2FA and install the authentication app.

3Commas has been described as the service disrupting the crypto sphere. Needless to say, it has an outstanding track record. That said, we have to point out that there are some negative reviews, especially on TrustPilot and Reddit. These reviews are hard to verify but still important to consider.

Trade Santa

TradeSanta is a cloud-based software where you can customize and deploy a trading bot in two minutes. As long as you remember to set stop-loss and take-profit orders, it can be a source of consistent profits from market fluctuations.

Features:

The features, settings, and strategies are nicely packed within its design and UI. The dashboard has a user-friendly layout that should take a long time to get familiar with.

Trade Santa only works with exchanges with high-security standards. Also, API keys only allow the bot to trade, which means they can’t access your funds or withdraw them. The website undergoes regular security audits. And lastly, there is an entire section listing security tips.

In terms of reputation, we found no issues. There are dozens of dedicated articles giving this automated software five stars, and regular traders seem to like it as well. The only thing is that reviewers aren’t satisfied with the quality of support.

Pionex

Pionex is a cryptocurrency exchange - the first one that brought GRID trading bot to their platform. There is no need to connect to other services or exchanges - you can track your strategy statistics, create all types of bots, even from the mobile application.

Features:

Since Pionex is not only an automated trading service but also an exchange, the in-browser interface is more complex than some other platforms featured in this article. It’s nothing to be intimidated about - just know that there are more features to discover.

Pionex was the first service with in-built trading bots to get the U.S. MSB (Money Services Business) license by the U.S. Treasury Department's Financial Crimes Enforcement Network (FinCEN). All clients can have a peace of mind knowing there’s an oversight. Since the exchange was established, it has been operating safely, with no hacks or exploits. Even giants like Binance can’t say the same.

Pionex has no monthly subscription fee. You just need to pay regular trading fees that are some of the lowest when compared to other exchanges, only 0.05%

The Pionex app is highly rated by users, with the iOS version rated 4.8 stars out of 5, while the Android version is rated 4.7 out of 5 stars.

Cryptohopper

Cryptohopper is a data-driven, technologically advanced trading bot. It specializes in different types of bots, including market-making bots that recognize market trends and configure different trading strategies per market trend. In other words, you don’t need to go through the hassle of adjusting strategies.

Features:

Cryptohopper specializes in offering more advanced charting tools and trading options. So, inexperienced traders may not find their way around the platform and the bot as easily.

Cryptohopper doesn’t give exchanges permission to withdraw funds. This means even in case of a hack, users’ crypto assets can’t be moved. The website is protected by Cloudflare, and any saved passwords and API keys are encrypted in the database.

When you combine Cryptohopper bot’s overall popularity and reputation, it’s easy to see it as a trustworthy service. Unfortunately, it was recently flooded with bad reviews on TrustPilot. But based on their repetitiveness, it seems to be an orchestrated move by third parties.

Bitsgap

Features:

Self-admittedly, Bitsgap tries to simplify their trading tools to make them easy to use for anyone. Judging from the interface, we can’t say that it’s suitable for complete beginners. The dashboard is a bit more technical - but nothing too overwhelming.

The number of users on Bitsgap is still modest as compared to platforms that provide similar services. Still, the majority of reviews we found online are positive, praising it for consistent profits and excellent customer support.

Shrimpy

Features:

By laying out the features in such an accessible way, Shrimpy makes it easy for complete beginners to pick up this trading bot. There are only a few tabs and a clean, minimal interface. Some traders may find that the dashboard lacks details, but it depends on how involved you want to be.

Shrimpy’s crypto bot is a perfect introduction for new-day traders. Experienced day traders would find it quite different from conventional tools but may still enjoy it. The reputation is solid, with criticism only mentioning the limited technical aspect.

HaasOnline

HaasOnline is advertised as the world’s most advanced trading bot. It allows users to develop, backtest, and deploy high-frequency crypto trade bots and connect them to dozens of exchanges. The three main products are HaasScript, HaasOnline CLoud, and HaasOnline Trade Server.

Features:

If you were looking for something more complex than Shrimpy’s sleek interface, HaasOnline might be just right. The built-in bot has a slight learning curve. But the layout is easy to navigate since each feature is separated by a special tab.

The project is one of the more transparent on the market and has provided a clear outline of how it operates. This instills confidence in prospective users.

Zenbot

Zenbot is a command-line cryptocurrency trading bot using Node.js and MongoDB. It connects to your chosen exchange while you dictate its actions through online natural language and chatbox hosts. One important distinction is that it’s an open-source system.

Features:

Zenbot is an advanced platform, which is probably the right option for investors with experience and has been on the playing field for a long time. Complete beginners may find the command-line interface too difficult.

The topic of security also takes teamwork. Anyone can suggest a security policy or report a vulnerability.

Zignaly

Zignaly is a copy trading bot, which means you can copy expert traders under the profit-sharing model. Aside from copy trading, the bot can work based on your own (or recommended) settings and rules and is fed signals from 46 providers.

Features:

The elements of the navigation terminal won’t take much time for newbies to get familiar with. It offers a good toolset, although with some limitations. The main thing is that it offers everything you need to get started.

The funds in the Zignaly Exchange go directly to Binance, and it is under Binance security. And this is where you don’t need to worry at all. Binance meets the internationally recognized ISO/IEC 27001 standard, and they also keep an insurance fund for emergencies, known as SAFU.

Zignaly doesn’t have monthly subscriptions to use the crypto bot. The free account will get you unlimited exchange accounts, coin pairs, positions, and priority support.

Trality

Trality is a platform offering creator tools to build your own bot. It targets those who want to make the most of their quantitative skills and code sophisticated trading algorithms. But there are also more relaxed tools if you’re eager to try out something new and simply test out a trading idea.

Features:

To secure our website and optimize loading times, Trality uses the Cloudflare CDN. And the host providers are Amazon Web Services and Google Cloud Services that are known for robust global infrastructure. All other details are available in the Privacy Policy.

Traders will need to know Python to code their algorithms, which is why we can’t say Trality is an easy-to-use trading bot. But if you do have some coding knowledge, you should find the Code Builder nicely structured.

Interestingly, there aren’t many reviews on Trality. But the complete transparency about the team behind this project makes up for it. They come from a range of backgrounds, which you can read about on their website.

Best Automated Trading Strategies

When it comes to strategies, there are endless opportunities for experimentation. Below are a few that you can try with trading bots. But please remember not to dive headfirst into a new strategy - start slow and work your way up.

Mean Reversion

Prices move back and forth following a broader trend. While doing so, they often revolve around a mean. A mean reversion strategy is based on a phenomenon that prices may shift away from their average but will eventually revert back. Statistically, extreme fluctuation is likely to be followed by a less extreme event.

When the mean reversion strategy is hardcoded into a cryptocurrency automated trading bot, it will sell the asset in bulk when the price goes up. When it falls back, it will accumulate the asset again.

Arbitrage

We’ve already talked about the fact that arbitrage auto trading take advantage of the price differences of exchanges. This happens due to geography, time, and regulations. So, the bot spots these market inefficiencies and places trades on multiple exchanges at the same time. Potential profits aren’t huge, but they add up over time.

Consider a use-case example of an Arbitrage bot. one exchange has listed asset X for $1.00 and another exchange - for $1.03. The bot will buy X on the first exchange and then sell on the second.

Arbitrage is a relatively low-risk strategy. It just requires speedy buys and sells, even simultaneous - the perfect task for a bot.

Momentum Trading

Momentum trading is also called the trend-trading system. The basic premise is that the price will increase over time until it eventually runs out of momentum and drops. Imagine market volatility as a series of waves. Momentum strategy involves holding short-term positions and selling at the peak of the wave before it crashes.

In momentum trading, timing is also essential. Sometimes, these momentum switches happen when you’re not behind the computer. Bots monitor the market and take care of the buy-in and sell-off for you.

Natural Language Processing (NLP)

Prices of cryptocurrencies tend to fluctuate depending on news articles, statements, and other types of content online. Trading software running on NLP programming try to respond to these changing sentiments. They interpret the content and enter the market at advantageous times and leave when the sentiment gets negative.

Copy Trading

Copy trading bots follow one trader's positions and place the same orders as them. Not every trader’s action and portfolio are mimicked, though. This strategy incorporates a social community and gamification elements, such as a leaderboard. So, only prominent traders are involved in these strategies, and they usually receive some sort of incentive for sharing their trading activities.

Final Thoughts

Hopefully, this guide narrows down all the countless choices of trading software. As you can see, we’ve created a selection for all budgets and skill levels. But! Even upstanding services aren’t safe from trading risks. That goes for all bots, exchanges, wallets, coins you invest in or trade, etc.

When choosing bots, use backtesting and live testing. The first one will show you the bot’s performance using historical price data. The second one will run your strategies on the live market without actually investing.

Lastly, bear in mind that different coins behave differently, so what works for Bitcoin may not work for Ethereum. BTC tends to be the steadiest coin and may respond well to strategies that altcoins will not. Choose your strategies as diligently as you choose bots.

FAQ

Find out more or solidify the knowledge you already have with these questions.

Are Trading Bots Profitable?

The truth is not every trading app is profitable, and even with good ones, not every transaction it carries out will be profitable. But if you choose the right bot and configure it to your preferred trading strategy, it’s very likely to perform more efficiently than a human would.

Do Trading Bots Really Work?

It ultimately depends on the person running it. Bots place orders automatically and use trading opportunities based on the pre-defined settings. If the strategy behind the bot is strong and you don’t intervene, it can work, and it can work very well. Another important variable is the market dynamics - sometimes, even the best software can’t outperform certain market moves.

Are Trading Bots Legal?

Yes, automated trading is not banned by any government or any crypto exchange. The only thing you need to look up first is whether your chosen broker allows trading apps. But overall, any action that a bot performs on behalf of a trader isn’t seen any differently.

How Much Money Can a Trading Bot Make?

There is no limit, actually. Your potential rewards depend on how risky the strategy is. You can calculate the risk/reward ratio with the formula: R = (Target Price – Entry Price) / (Entry Price – Stop Loss). A ratio of 1:1.5 is good - you shouldn’t go lower than 1:1.

What Are the Best Crypto Trading Bots?

The best automated trading software are described above: 3Commas, Trade Santa, Pionex, Cryptohopper, and six more.