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Read about crypto bots, how they were created, and all the curious topics in our blog post.

 

Table of Contents

How Does the Trading Bot Work?

Why is a Trading Bot Necessary?

Various Crypto Bot Strategies

How To Create a Crypto Trading Bot?

 

How To Create a Crypto Trading Bot?

 

Trading bots, which attract more attention especially for those who are new to crypto money investing, are software tools that allow investors to adjust their portfolios and engage with their other work instead of being online all the time. In other words, instead of being locked to the screen in single or double transactions, the trading bot you will use will trade for you.

 

How Does the Trading Bot Work?

 

Cryptocurrencies, which are widely used all over the world and sit almost at the financial center of our lives, are full of people who make serious money, as well as people who make serious money every day. However, the dream of every new crypto money investor is to make easy money in a short time, of course, to make high money... Let's say from the beginning; Cryptocurrency trading is no different from real trading. This is not a world where you can invest in the evening and wake up as a millionaire in the morning. Of course, this can happen at times, but you should not think that this is different from a real trade. So, do all investors trade online 24/7? No, of course… The trading bot is software with life-saving features for many big traders. Manual processes always take more time and require more effort than automated processes. Especially if you are doing a monetary trade, you can make your trade more easily thanks to software such as trading bots.

 

Why is a Trading Bot Necessary?

 

Every day of our life is important to people. For example, if you are planning to make a nature camp, you cannot camp without looking at the weather conditions, or you cannot set up a camp by just looking at the first day during a 3-day camp. For this reason, you do not want to check whether it will rain for hours at the top of the mountain. Mobile phones now have weather apps and they show us the weather forecasts clearly. A trading bot can be likened to a kind of weather application. Instead of waiting for a long time at the screen while investing, you can automatically perform all the transactions you need to do with an order given to the bot, via the bot.

 

Losses are greater in manual trading. This is because it is not tied to any particular automatic algorithm. However, the trading bot calculates the most accurate results because it acts on a certain algorithm and performs the buying and selling transactions in this way. So there is no margin of error.

 

Various Crypto Bot Strategies

 

Not all crypto bots are the same. While there are several types of crypto trading bots available on the internet, the most popular crypto bot trading strategies are:

 

  • Trend Trading

These crypto trading bots are the simplest of the lot. These bots respond directly to any change in the market. Trend trading bots do not use complex algorithms like the predictive analysis. Useful when you want to apply stop loss or take profit to avoid losses or make sweet profits.

 

  • Arbitrage Boats

This model compares the price difference between various crypto exchanges around the world. Since each exchange has a slightly different crypto price, the arbitrage model takes advantage of the exploit. If you want to learn how to create a crypto arbitrage bot, read on. For example, if we compare South Korean and US-based crypto exchanges, we can see that South Korean exchanges offer much higher prices than their US counterparts. Big gains can be made by taking advantage of the price difference.

 

  • Coin Lending Bots

If you want to lend your crypto assets with limited risk at certain interest rates, crypto lending bots can help you. They automate the whole process and help you save profits.

 

  • Market Maker Bots

This bitcoin trading bot algorithm allows you to buy and sell cryptocurrencies in high volumes. The profit you receive is derived from the difference between the buy and sell price. If you want to trade high volumes, a cryptocurrency market-making bot is your only friend.

 

How To Create a Crypto Trading Bot?

 

Now that we are familiar with crypto bots and how they work, let's write a cryptocurrency bot. Follow the steps below to create an art bot that fits your needs:

 

1. Decide on the language you will use

While there are several programming languages ​​to choose from, we recommend choosing commonly used languages. Ideal candidates include Perl, C, and Javascript. The advantages these languages ​​offer will make things easier for both you and the developers.

 

2. List all exchanges you want your bot to work with

This is one of the most important things when deciding how to code a trading bot. List all possible replacements you want your bot to work with. Doing so will clearly show developers which services you will use.

 

3. Create an account on listed exchanges

The next logical step would be to create accounts on all crypto exchanges that your trading bot will access. Register with any exchange you will use and benefit from their APIs. Some common crypto exchanges include Kraken, Coinbase, Bittrex, Poloniex, and CEX.IO.

 

Some services allow you to trade anonymously on their platform, while others require you to create an account and be approved before taking any action.

 

4. Select the type of crypto trading bot you want to use

Before developing a crypto bot, choose the type of bot trading strategy you will use. Note that a complex algorithm will require more time.

 

5. Determine the architecture of the crypto trading bot

The architecture will determine the success of your crypto bot. Make sure the algorithm you use for your bot has a solid foundation. Otherwise, you may lose some money. The process involves deciding what kind of data you want your bot to work on. Some examples include historical trends, market analysis, and identifying market inefficiencies.

 

6. Coding

Coding is undoubtedly the most important part of the process. Communicate with your development team and let them know your expectations and what technology you want to use. An experienced team of developers will assist you with everything from algorithmic complications to UI creation.

 

7. Test

After completing the coding part, be sure to test your bot before deploying it. The process includes two functions. Make sure your bot works as intended and doesn't stumble or encounter any bugs. Test if your trading bot can handle complex data. The first phase includes the assessment of 'overfitting' and 'reward function against risk'. Fine-tune the performance of your cryptocurrency bot. Optimize your bot by adjusting the parameters according to your preferences.

 

8. Distribution process

The final step in making a crypto bot is deployment. An excellent mobile app development company provides support for some time even after the app is released. This ensures a smooth migration of the business. Sometimes businesses encounter an error or bug after the application launches.

 

We hope that this blog post will be beneficial for you. We will continue to create useful works to get inspired by everyone. We are sure that we will achieve splendid things altogether. Keep on following Finage for the best and more.  


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