Note: this bot is currently offline due to changes on Bittrex policy.
For a better alternative that operates on the same principle:
I decided to try out this bot to trade for me! I was sceptical at first because I’m a natural control freak and it’s not easy to give up control to a “bot” especially not when my money is involved.
I stumbled upon some youtube channel and the guy on there was explaining he used a free bot and was genuinely impressed by the results. Since it was free I thought why not give it a try.
The bitcoin requirements for the bot to operate with are relatively high for someone starting out. It requires a minimum amount of 0.5 Bitcoin. At current prices that may be too much for some but it is necessary for this bot to function correctly.
Note: they’re now enforcing the 0.5 Bitcoin
This bot I used is a completely automated, web-based trading system that anyone can use. No download or installation necessary.
So how does it work?
Actually it can’t be easier. This bot does not hold your money, it’s not like investing into Bitconnect where you trust a third party with your investment. Of course you have to trust the exchange you’re trading on but if you’re trading manually now you’re already doing that.
Currently the bot only runs on Bittrex but other exchanges will be added. Another requirement is that you hold at least 500 RBY coin in your Bittrex account other than that it’s 100% free.The reason for this is that the bot was made by the creators of RBY coin and part of the deal is you buy RBY. The bot checks if you have that amount on your account. I guess that way their coin gets more volume and higher price on Bittrex. But if you decide to stop using the bot you just sell your RBY coin back to Bitcoin.
The bot, according to the developer, uses AI to learn about the coin-pairs you’re trading, not sure whether that is true but I do know it uses a simple strategy of buying on down moves and selling on up moves by placing two orders at the same time. Each time it places a buy order it also places a mirror sell order at the price +1% sometimes it cancels orders when the market goes up to sell it at a higher rate but mostly it just settles at 1%. When the market goes down the bot averages the price down until it can sell at a profit again when things go up. This last feature actually saved me yesterday.
I put a lot of money on a coin but too early before I had proper confirmation of trend (read: I was greedy) and when the trend didn’t go as I expected I lost over a thousand dollars in less than half an hour. Normally I would have set a stop loss but I was so confident (read: hubris) it would go up that I didn’t. In a case like this I usually cut my losses and move on. But this time I thought let the bot handle this and trade his way out of it and went to bed. Next morning low and behold the bot made hundreds of trades and averaged down, meanwhile the market recovered and it had sold half of my coins for a profit of 1% on each trade, the rest I could sell during the uptrend.
Now that you know how the bot operates it becomes clear why it needs a lot of bitcoin to operate with. If it only makes 1% trades and hasn’t got enough money to work with it’s not really worth it barely covers your trading fees and your returns are minuscule.
Here’s an example of the bot with less than 0.1 BTC 1/5 of the requirement.
As you can see most trades are even less than a dollar of profit. So unless you can invest enough it’s not worth it. So the 0.5 Bitcoin is really necessary for the optimal functioning of the bot.
You can select up to 5 coins to trade against Bitcoin, this is a limit imposed by Bittrex.
For each of the 5 coins you can choose Market Liquidity, Slow Exit, Slow Accumulate. Market liquidity will basically trade your coin constantly, Slow exit let’s you take profits and exit a coin, Slow Accumulate let’s you accumulate coins. The bot will do so whenever it’s best to buy or sell.
On the Market Liquidity page you can set how much importance the bot has to give to a particular coin in this case POWR 50% and LTC 10%, so you basically divide your 100% among your coins.
Now how does this bot access your money on Bittrex in a safe way? Do you give it the password to your Bittrex account? Hell no, never ever do that! Bittrex has an API that allows external apps to access its platform and you can set a public and secret key for the application as you can see you can set the key to only allow reading your portfolio and trade with limit, market trades and withdrawing money is disallowed.
When you create the keys the secret key is visible for a limited time. You need both keys for the bot.
This bot does what it promises it never settles a losing trade but on the downside the gains are too small if you can’t put 0.5 bitcoins on your Bittrex account for it to work with. Another downside is it only trades against bitcoin as it’s aim is to increase your amount of Bitcoin. That way it’s gains are largely impacted by bitcoin going up or down.
For more info check out this tutorial:
Now what if you don’t have 0.5 Bitcoin to invest? You can still get a bot that works with smaller amounts of capital but most of these bots aren’t free. However they are far more configurable and can pull in a lot more profits as they can be configured and backtested (tested with market data from up to 32 weeks back in time).
It’s not the aim of this post to go into detail about those other commercial bots but here are the most popular bots listed in case you want to learn more about them.
Conclusion
Please note that running a bot does NOT mean you will automatically get high returns. A badly configured bot will lose you probably more money than you could do yourself, you still need to learn the fundamentals of technical analysis.
For a better alternative that operates on the same principle:
The above references an opinion and is for information purposes only. It is not intended to be investment advice. Seek a duly licensed professional for investment advice.
