Best Automated Trading Solutions for Crypto

If you have ever thought about alternative ways of investing, avoiding bank deposits and securities markets, then you have inevitably come across various ways for automated trading in the cryptocurrency market.

Usually, on traditional markets, the most interesting offers are concentrated in the hands of accredited investors, whether in terms of any IPO or deals with a good risk profile outside the secondary market.

However, the entry threshold into the crypto market is available to almost everyone. While some are serious about waiting for another Elon Musk’s tweet regarding Shiba Inu, others are looking for ways to wisely invest their hard-earned funds. So, do these automated bots even work?

The short answer is yes, but they are quite different. Let's figure it out in this article.

The post aims to shed light on some trusted cryptocurrency trading bots and explain the mechanics behind them. This is not in-depth research, but just an overview and comparison that will be helpful for anyone who needs a crypto trading bot in order to automate their cryptocurrency investing.

About Stoic

Stoic was developed in 2020 by the Cindicator team that is operational since 2015. The Stoic AI uses a long-only portfolio-based strategy of different altcoins in its pocket. The decision to either buy any token or keep it untouched is based on quantitative research.

Trading is carried out on the spot market, which has some advantages. For instance, not using margin or any kinds of derivatives may lead to more cautious trading and may be a good solution for more relaxed investors. However, there are also disadvantages behind this: when the market falls, the Stoic tanks as well. So, it makes an individual literally follow the bullish trend.

Despite the disadvantage described above, Stoic’s strategy has performed well in the long run since March 2020. There is a clear trend towards earning more during bullish trends and losing less during the bearish market compared to the cryptocurrency market as a whole.

Though there is no performance fee, you have to pay 5% of your portfolio value on Binance, which may raise doubts among some users. According to the Pricing section available on their website, it doesn't have many plans: 5% annual fee for $1000-99,999 deposits and 4% per annum for deposits that start with $100,000.

The onboarding flow is quite common: you need to create your Stoic account -> specify the amount you’d like Stoic to handle -> pay the management fee -> connect the API key and add the list of trusted IPs to hold further trading activities. That would be it.

Stoic is available for Binance Global & Binance US customers to date. The team claims to work on adding new L1 exchanges which is a nice sign in terms of the future product’s growth.

About alpha10

Founded in 2017, Xena Exchange is a global cryptocurrency exchange for trading cryptocurrencies and related derivatives. The initial goal was to create a convenient environment for professional trading audiences by increasing the opportunities and creating convenience in derivatives.

The team has decided to go retail by revealing their automated trading portfolios. The algorithms behind the currently available automated portfolios have been initially developed for internal usage. Being a time-proven synergy, they went public with alpha10,  but are still used by the team. It makes the team highly interested that algos work well as customers’ profit means they profit as well, while customers’ losses lead to the team’s losses.

Currently, there are 3 available portfolios that are correlated with each other, however, their risk profile, profitability, and drawdowns are different. Rocket is the most aggressive setup, Growth is the most balanced portfolio, and finally Gain is the most low-risk portfolio developed for cautious investors. They are able to go both long and short and trade Perpetuals and Futures contracts for BTC and various altcoins listed on Xena Exchange. The current USD yield starting from December 2019 stands as follows:

• Rocket : Profit USD: 2257%, max drawdown: -44.5%

• Growth: Profit USD: 1479%, max drawdown: -46.9%

• Gain: Profit USD: 1090%, max drawdown: -49.1%

  
  

In terms of pricing, the fee structure is quite flexible compared to other automated crypto trading bots in the industry. One of the best things that make alpha10 different is that there is no success fee and its customers do not have to pay beforehand. alpha10 users are supposed to be charged with a small slice of their portfolios on a daily basis at the rate of 5% per annum.

Just like with Stoic, the trading activities are held by the connected API to your exchange's account. You do not have to provide any permissions besides conducting trading operations on your alpha10 account within Xena Exchange. It makes it impossible for everyone besides you to withdraw your funds.

Currently, alpha10 is available on Xena Exchange only. Though we can expect the deployment of more CEXs in the future, just like with the Stoic AI case.

And last but not least… let’s talk about 3commas!

About 3commas

3commas is one of the most recognizable trading bots in the crypto space.

This bot is very different compared to the automated portfolio managers mentioned above for several reasons. 3commas presents its own trading bots for various types of trading. Setting them up requires some technical and trading experience. There are three types of crypto trading bots available on 3commas:

There are three types of crypto trading bots on 3commas:

• DCA bot: The Dollar-Cost-Averaging strategy has been deployed in order to avoid unprofitable entries at the local hights. You can set a fixed interval of time for the automatic purchase of any certain asset. It is a nice decision in case of doubt in terms of the current situation on the market.
• GRID bot: The following bot aims to automatically take profit with little effort. GRID users need to choose a cryptocurrency and the initial investment value. The bot will buy when the price drops and sell when it rises. Though it sounds quite simple, it requires some deeper analysis and configuring, for instance, setting the range in which your bot will purchase and sell, etc.
• Options bot: Options have always been one of the most difficult derivatives to deal with. Trading options requires a lot of experience from traders. The bot allows you not to only buy a Call Option (Bullish scenario) or a Put Option (Bearish scenario), but also to hold Straddle operations by either going Short or Long. The bot needs you to keep your finger on the pulse and use it for every trade separately, without the ability to automate it.

Unlike Stoic and alpha10, 3commas uses monthly plans for their subscriptions. You could start with selecting a free trial with limited features, and adjust your plan in the future. The PRO tier has unlimited crypto trading bots.

Since bots are not automated and their configurations are chosen by users themselves, it is impossible to talk about any fixed or total profitability.

For instance, DCA can be profitable or even harmful for your trading depending on the market conditions -- in case the bot has initially bought the bottom, then further entries to the certain asset during bull market will "blur" this entry and, therefore, its profit.

Other bots also depend on your investment decisions at this moment of time, rather than on their own technical components. We can conclude that this platform requires more experience and is not automated passive income without FOMO.

3commas users have 23 major cryptocurrency exchanges to choose from. The connection takes place, as in the case with the above-described portfolio managers, through the API keys.

To summarize, automated cryptocurrency bots work. Just choose the one which suits your needs. Some of them need your configuring and are on autopilot, some of them don’t. Some of them offer different features and allow you to manage the risks on your own, some of them don’t.

Always remember that a Holy Grail has never been in existence and cryptocurrency trading is associated with risks!