What are crypto trading bots and are they worth it?

2 min readJan 14


Crypto Trading became very popular in the last couple of years and many youtube channels promoted crypto trading during the bull market in 2020–2021. For being a profitable trader, it often takes months or even years of experience and often several account liquidations as well. A trader has to be in control of his emotions as well as be disciplined regarding his trading strategy.

Another possibility to profit from trading are trading bots.These bots are computers which buy, sell or hold cryptocurrencies based on a trading algorithm automatically. Crypto trading bots can execute different trading strategies on different trading time frames. Furthermore, they can buy undervalued cryptocurrencies or trade assets to gain from price fluctuations.

Trading bots using programming scripts like Python, Java or C and employ APIs to interact with exchanges, where the trades are executed. The algorithm usually needs information about the price data in the past in order to calculate the entry signals, stop loss levels and take profit levels. Moreover, the bot also allocates the capital in proportion to the risk defined by the trader in order to ensure a necessary risk management.

Investors can benefit from trading bots by gaining profits automatically without the need of spending time to analyze the market or executing every trade manually. The trading process can go on 24/7 without getting tired. Moreover these bots can take out several human errors as the trading algorithm trades strictly according to the rules which were set. Hundreds of trades per day are possible and investors can earn profits even if the markets are going down.

A lot of companies are already offering crypto trading bots. On the companies platform, you should have the possibility to track the performance of the trading algorithm. Often users are also able to connect their crypto exchange to an account with a trading bot. This is recommended as your assets stay on the exchange of your choice. Furthermore it is important to have access to the performance in the past for at least the last 6 months before choosing a crypto trading bot.

The cost of a trading bot can vary. Some platforms take an annual or monthly fee, while others take a percentage as a commission of the monthly profit. Depending on the capital amount, it is important to choose the right cost structure in order to maximize profits.