Which cryptocurrency trading bot will bring me the biggest returns?
As always in life: it depends!
Me, I use two cryptocurrency trading bots. With big returns. I will tell you why.
Using trading bots for trading of bitcoin (or any other cryptocurrency) is really fun!
And you can really make good profit!
If, and this “if” is important to consider:
You have to do it right!
Sounds simple, isn’t it?
Well, if it would be simple there would not be so many questions about it here.
I want to tell you more about my personal experiences with trading bots:
Me, I have two bots running: Hodlbot and Cryptohopper.
I use these two different bots for two completely different strategies.
Which leads us to the first step to be checked:
Step 1: Define your personal investment strategy
Before you start to care about any bot, sit back and think first about your investment strategy.
- Which are your available assets? How much can you afford to invest?
- Which is your goal?
- Which is your investment timeline?
- Do you want to re-invest profits or do you want to withdraw profits?
- Which is your profit expectation?
- Which kind of investor are you: do you prefer big wins or small losses?
Take your notebook and answer these questions, save them in a file.
The complete trading bot issue should be a brain driven thing, not just your gut feeling.
From my point of view, there are two major strategies:
Buy and hold
You buy once your portfolio of cryptocurrencies and just hold, because you believe in the positive long-term development of your portfolio.
This is a very simple and classic strategy.
You invest once and let the money work for you. You don’t have to re-invent the wheel every day. And you save a lot of trading fees.
This strategy is the synonym for HODL.
The opposite strategy makes profit of the ups and downs of the volatile cryptocurrencies market.
You would never doing this for assets like gold or real estate.
But for a new market as the cryptocurrency market is, this can be a good choice.
An important benchmark is your profit expectation.
1% per day as average profit is a well-established and proven number for day traders.
It’s not bad, it means even 30% per month!
Step 2: Define the best trading bot
After having defined your personal strategy, your available money, your goal and your timeline, it’s time to choose the best suitable trading bot.
Because I have experiences with only two trading bots, I only want to talk about these two: Hodlbot and Cryptohopper.
The Hodlbot is a cloud-based trading bot which is based on the HODL strategy. The bot is programmed to buy once a set of cryptocurrencies and (if enabled) to rebalance it once a month.
The investment target assets are basically three different kind of self-created indices:
- Hodl10: the 10 biggest cryptocurrencies based on market capitalization
- Hodl20: the 20 biggest cryptocurrencies based on market capitalization
- Hodl30: the 30 biggest cryptocurrencies based on market capitalization
The big advantage of this portfolio is the incorporated risk mitigation. You invest in the 10 (respectively 20 or 30) biggest cryptocurrencies and spread your wins and losses.
And to keep the portfolio always “on track” as defined, the bot can rebalance the cryptocurrencies regularly, e.g. once a month.
Hodlbot works with the cryptocurrency exchanges Binance, Kraken, KuCoin and Bittrex.
The monthly plan of Hodlbot costs 10 USD per month.
The Cryptohopper trading bot is a cloud-based trading bot for day trading. Because it’s not coupled with software on your computer but independently saved in a cloud, Cryptohopper works for you 24/7.
The investment target is always a cryptocurrency pair or a crypto / fiat pair.
After using the hopper one big advantage is the so-called paper trading. It enables you to invest your money first virtually, as a test.
This way you have enough time to optimize your investment before linking it with the real world exchange.
You have the choice of three different subscription plans, Explorer, Adventure and Hero.
For starters like me I am the Explorer plan with 15 cryptocurrencies available is fair enough. It costs 19 USD per month.
Step 3: Configure your bot
The final step is to configure your bot. That’s really easy.
As with all cryptocurrency tools you need to proof your identity.
As soon as this is finished, both presented trading bots have well-structured and easy to understand dashboards.
Then you can connect your bot to your currency exchange by using API keys.
If you use the Hodlbot, you choose your index: Hodl10, Hodl20 or Hodl30.
If you use the Cryptohopper, you choose your bot strategy and if you want to subscribe to external signalers.
And let your bot running.
For me, trading bots are really a valuable tool.
The main advantages are:
- They never sleep, which fits perfectly to the never sleeping cryptocurrency markets
- They put emotions apart by using trading algorithms
- They are easy to handle
- And at the end it’s still you who decides the strategy or the goal
If you are interested in knowing more about using trading bots for cryptocurrencies I invite you read my extensive article “How to build an empire with bitcoin trading bots”.
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