November 13, 2018

Automated crypto trading platforms vs common crypto bots

November 13, 2018
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4 min

The idea of robots as depicted in sci-fi may still seem futuristic, but automation is already everywhere. It’s happening across roles, industries, and countries.


And while some people nervously anticipate the day that humans become obsolete, crypto traders around the world are trying to get automated trading bots to do the hard work for them.


To trade crypto to the fullest, hardcore traders invest a lot of time and energy. They might spend hours staring at screens, anxiously awaiting the right signals. And even when they’re physically separated from the screen, it can be difficult to take their minds off the markets.


So, in an effort to make trading a hands-off process, many automated crypto trading bots have cropped up. What they appear to offer is tempting: a chance to take eyes and minds off trading while the bot pulls a profit.


But of course, if something sounds too good to be true, it usually is.


To the unfamiliar trader, bots might sound like an ingenious solution. However, the truth is more complicated. Though these bots communicate directly with financial exchanges, place buy/sell orders on behalf of a trader, and take the emotion out of trading, traders maintain no control over the bot’s strategy.


Bots are a blackbox solution, offering little to no opportunity for customization. Instead, traders are left to trade based on someone else’s strategy and hope for the best. While they are technically automated, they don’t account for the diverse array of data — market data, macro-economic events, fundamentals, cryptocurrency trading attributes, information about token sales, social media feeds — that move the markets.


There is a huge variety of bots to choose from, which fall into a number of different categories. Among those categories are arbitrage bots and market making bots.


Arbitrage bots take advantage of the difference in price from one exchange to another. They spot the differences early, then buy at the lower exchange and sell at the higher exchange. Though these bots were useful in the early days of cryptocurrency, the spread between exchanges is much smaller now, making it tough to turn a profit.


Market making bots continuously buy an asset then sell it for a profit, capitalizing on the spread between these two prices. This strategy, however, is extremely competitive, making it difficult to turn a profit.


But whichever bot a trader chooses, they’re all built to execute trades on the trader’s behalf, freeing up the hours they’d typically spend staring at screens while waiting for the right signals. This also eliminates the emotional aspect of trading, so traders won’t fall victim to last-minute, emotion-driven decisions.


Bots aren’t the only choice to automate execution and keep trades emotion-free — automated trading platforms also do the job. Plus, automated trading platforms give you control over your trades. They aren’t fully hands-off, allowing traders to tailor their trades to their investment strategy. With a bit of oversight, traders can simply set them up to rake in the crypto.


Automated trading comes in many shapes and forms, with different features, advantages, and add-ons. Capitalise brings you full control over your trades and the best in automated trading technology.


Capitalise’s automated crypto trading platform allows you to plan out your full trade from start to finish. Just use the Wizard to write out your entry and exit strategies using natural language, and the platform takes care of the rest. Of course, you can check up on your trades at any time — so you can see exactly what’s happening, when it’s happening, giving you complete control over your trades.


And with Capitalise, you get to trade using your own ideas. Where bots allow you to automate a few preprogrammed executions, the Capitalise Platform will transform your own ideas into fully automated strategies. You choose your triggers, your conditions, your scenarios — all aspects of your trade are up to you and you can run as many scenarios as you would like.


The platform also incorporates all the data that the bots leave out. So, you can automate trades based on market data, macroeconomic events, fundamentals, cryptocurrency trading attributes, information about token sales, and social media feeds (on the Capitalise roadmap).


And if you’re not ready to go all in, Capitalise’s simulation mode allows traders to take the automated crypto trading platform for a spin — they can simulate trades with real-time data and without risking real money.


Though bots might purport to be the future of crypto trading, they’re really only rudimentary tools that help the most skilled traders in the crypto game. In contrast, Capitalise’s feature-filled platform puts you in charge of your trades, allowing you to truly automate your crypto trading.


And when there’s so much at stake (financially speaking), why use a Nokia of trading when you could have an iPhone?


Alma Vilcov

Head of Customer Success

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