Trading with crypto robots has become a very common practice in Cryptocurrency trading today. Many crypto traders who are not able to devote a longer time to trading due to their other engagements now procure some robots to perform these tasks on their behalf and deliver the returns to them. However, not all crypto robots are profitable for trading. This work will therefore help you understand the risk associated with using a crypto robot and other things you need to know before using the Robot.
Meaning of crypto robots
Crypto trading robots are automated software designed using an API to execute trade orders on behalf of the trader at a given Crypto exchange. They are often referred to as expert advisors (EA) set to take action on behalf of their owners in the market. They open and close various positions depending on the instructions used in coding the robots.
Step-by-step guide on how to build a robot
- Develop a trading strategy: Developing a trading strategy is often the most important aspect of creating a Crypto Robot. This is because the Robot will be configured to follow such a strategy afterward. There are many trading strategies one can use to design a Robot, such as Scalping strategy, swing trading, trading fundamentals, trading Support, Resistance, etc.
- Program the Robot: Robots are usually programmed using the Application Programming Interface (API). This enables the Robot to be able to pick instructions and execute them on a linked platform such as the MT4 and other trading platforms, including the Crypto exchanges. The basic function of the API is to establish a connection between the Robot and the selected trading platforms.
- Coding the Robot: Coding the Robot is a very delicate task to perform while building a robot. The robots are usually coded using special metaquotes languages on when to buy and sell in the market. Coding is the general instruction given to the Robot on when and how to execute the strategies it has been made to follow.
- Link the Robot to your trading account: Once all the steps listed above have been completed, the next step is to link the Robot to a trading account at a chosen Crypto exchange for trading. This is to be done as we have mentioned earlier using the API. Not all trading platforms allow the use of robots on their platforms. Hence the trader needs to take time to identify those Crypto exchanges that allow the use of robots for trading on their platforms.
- Backtest the Robot: Before allowing the Robot to trade permanently after it has been linked to a trading account, it is always very necessary to carry out initial testing of the Robot’s performance for a short time to see how efficient the Robot could be in executing the orders and strategies it has been meant to follow. This is always very necessary to protect the trader’s account in case there have been some errors in the programming.
Understanding the risks associated with trading with crypto robots
- It is often hard to find a profitable robot today
- Some robots are not able to adapt to changing market conditions in cases of extreme volatility.
- Robots require VPS to function when not linked to the platform’s server and may cease functioning once the VPS expires without renewal.
- The Robot is not suitable for trading small capital
List of regulated Crypto Exchanges to trade with using the Robot
- eToro
- Capital.com
- Binance
- Kraken
- Bitstamp
- Kucoin
- Coinbase
- Huobi Global
- Kraken
- Bitfinex
List of best crypto trading robots
- CryptoHopper
- TradeSanta
- Shrimpy.io
- Zignaly
- Pionex
- Botsfolio
- HaasOnline
- 3Commas
- Bitsgap
- Trality
