As technology continues to dominate every nook of the world, cryptocurrency has evolved as one of the finest ways of elevating an individual’s income. Ever since the introduction of this medium of earning, individuals globally have been trying out their luck in the world of cryptocurrency exchange.
A lot of countries have adopted cryptocurrencies as an alternate form of currency. Any individual who displays an inclination towards earning from cryptocurrency must be aware of the different strategies. There is no doubt that the crypto trading market fluctuates a lot. Cryptocurrency trends often fluctuate in a matter of milliseconds. Traders who choose to trade every single day manage to earn huge profits.
What Are Crypto Trading Bots?
Crypto trading bots are automated software programs used to carry out certain activities while keeping human involvement to a minimum. Once these trading bots are programmed, they can distinguish different trends within the crypto market and automatically place a trade. A trading bot follows a predetermined algorithm and automatically executes a transaction.
Trading bots can help a trader save time, increase profits, and more. If you are looking for a platform to hunt down crypto trading bots, the 3commas crypto trading software is what you have been looking for!
However, the real question is – how exactly is a crypto trading bot built? We break down the entire process in complete detail in the article below.
1. Choose a Programming Language
When an individual designs a crypto trading bot, it’s wisest to decide on the programming language they are most comfortable with. C, Java, Python, and Perl are the most frequently used languages to program a crypto trading bot. Using well-known programming languages will ultimately work out in your favor, as you can seek the assistance of other developers to write or fix the code if any issues arise.
2. Integrate Crypto Exchange’s
Before you begin the procedure of developing your trading bot, you must list down the APIs your bot needs to access various crypto exchanges.
3. Create Accounts
Once you integrate the crypto exchanges you wish to trade on, the next step is creating accounts. This is a relatively simple task and barely requires any effort. The method that should be opted for in this step differs from exchange to exchange. A few cryptocurrency exchanges require traders to undergo an entire authentication process, while some platforms allow anonymous trading.
4. Determine the Type of Bot
After creating accounts on your desired platforms, you must decide the type of crypto trading bot you want to design. Most individuals opt for the two most frequently used trading bots.
Technical Charting Bots
A significant number of people use technical charting while planning their trading tactics. Regardless of how experienced a trader may be, much time is required when one opts for charting. However, training a bot can simplify this task.
The other type of bot you can design is a Crypto bot. Arbitrage is a tactic frequently used while trading in crypto. This strategy refers to profiting from the price fluctuations of a single asset on numerous trading platforms.
The only factor you should consider while designing a bot is that more complex trading models require more time to build.
5. Confirm the Architecture of the Bot
A factor that massively affects how well your crypto trading bot performs is the bot’s architecture. The architecture of your bot determines how well it functions. To ensure that your bot functions smoothly, you must clearly define the type of data that you would like your crypto trading bot’s algorithm to interpret.
The mathematical body on which your algorithm is based must be solid. This step is of utmost importance and must not be neglected, as undermining the architecture’s importance could lead to a financial loss.
6. Begin the Designing Process
Once you have decided on the programming language, the nature of the bot, and the architecture, you can proceed to the next step. After outlining the architecture of your bot, you can begin coding. You must ensure that you follow a set procedure for this part. There is no doubt that this will be the most time-consuming part of the entire bot’s creation.
Regardless of what you are programming, testing is of utmost importance. Testing helps ensure your bot functions as desired and can comprehend asset fluctuations. Multiple factors, including modeling errors, must be evaluated at this stage. Additionally, performance tweaking is the second purpose of testing your crypto trading bot. You must understand that “performance” refers to the behavior you would like your bot to exhibit.
Once you are through the steps mentioned above and have resolved any errors you came across while testing, you are all set to launch your crypto trading bot on the market. The most substantial part is that you remain steadfast and monitor your bot’s performance constantly.
Given how fast trends change within the world of crypto, a significant proportion of traders choose to opt for crypto trading bots. Trading bots provide traders with the optimum opportunity to increase their earnings while keeping their manual involvement to a minimum.