Exchange • 4 min read
By Bitpanda Pro
Learn all about how to get started with finding out how trading bots work, how they can support you in crypto-trading and which one is the best trading bot for your needs.
Newbie crypto-traders in the making are curious about them and seasoned crypto-traders cannot imagine life without them: crypto-trading bots. These little helpers have come a long way from the early days and offer a vast range of features and functions to assist traders in successfully executing their trading strategy.
If you have ever wondered if successful crypto-traders are online 24/7 monitoring the markets and their trades, the short answer is no. It goes without saying that the international nature and complexity of cryptocurrency trading spanning all time zones around the globe and a manually implemented trading strategy can hardly go hand-in-hand. Manual trading has become far too difficult and time-consuming.
This is where cryptocurrency-trading bots come in. The accuracy and precision of trading bots have changed the entire landscape of crypto-trading within a short time. Based on algorithms created by developers, crypto-trading bots are software applications which automatically trade on exchanges for you by accessing data from an exchange account.
Thanks to trading bots, traders no longer need to be online day and night to adjust their portfolios and place trades. Instead, trading bots are able to automate trading strategies on single trading pairs. Coded for high-precision order placement, trading bot technology even allows for the intelligent routing of trades between various assets and actions such as trading across exchanges via real-time arbitrage to take advantage of very small price variations.
Just like you don’t have the time to stand on a mountain all day to watch the weather and instead opt to use a weather app on your mobile phone, you should look into getting a trading bot or later even programming your own to benefit from state-of-the-art trading.
Setting up your own cryptocurrency trading bot allows you to automate many of the cumbersome chores associated with crypto-trading. For instance, outsourcing mundane and repetitive tasks, such as rebalancing your portfolio at regular intervals of your choice through automation by a bot.
Trading bots are highly accurate and precise. Unlike human traders, bots can select and execute strategies quickly and on point while manual intervention can neither rival such precision nor automation. A cryptocurrency trading bot instantly calculates the optimal moment to process and to execute a trade 24/7, 365 days a year, even if highly complex trading strategies are involved.
Setting up a trading bot is much easier than it sounds. To set up your own trading bot for trading on the Bitpanda Pro Exchange, two types of information are needed to identify that you have authorised a bot to access the information on your exchange account, by giving the trading bot access to your account with both your API public key and API private key.
So how do you start? First of all, you are going to need to be a verified Bitpanda user and to set up your Bitpanda Pro API keys. In case you missed this Bitpanda article, read up on everything you need to know about Bitpanda Pro API keys here.
Once you have set up your Bitpanda Pro API keys, you have to decide on which trading bot provider is right for you. Bitpanda Pro has partnered with two innovative providers of trading bots. Coinrule has been a Bitpanda partner since October 2019 and in December 2019, we partnered with HaasOnline. Both HaasBot as well as the Coinrule Bot provide outstanding, innovative and safe, high-precision, automated trading.
A small note on settings for your trading bot: access to your API public and private keys is only granted if you give your explicit permission. Besides granting them access to “Trade”, trading bots need to be permitted to collect “Balance” and “Trade” data from your exchange account, however, a trustworthy trading bot does not need access to “Withdraw” funds. Should a trading bot ask access to this function, don’t use it. Additionally, you can withdraw access to your information and data anytime.
For instance, the HaasOnline Trade Server offers storing your trading bot data and exchange API keys on your own secure hardware to ensure there is no third-party tracking while Coinrule stores API keys in 256biz AES encryption with dedicated private keys generated for each user separately, on detached and encrypted data storage.
RISK WARNING: The information contained in this article is for general purposes of information only and is not in any form an investment advice. Please note that cryptocurrency trading may involve a significant level of risk and is not suitable for inexperienced traders. For further information regarding the risk in connection with cryptocurrency please also refer to our terms and conditions (see 13. Risks).
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