So you clicked this article because you have some inkling of curiosity towards either passive income, trading bots, or you just randomly stumbled here.

I want to go over and spill the beans on all the knowledge I have on trading bots (if you have anything you would like to contribute)

Lets get into it

What are trading bots

We can start by dissecting the two words, “trading” and “bot”:

Trading:

In lay mans terms, this is the practice of making profit from the fluctuations in price of certain tradeable assets and profiting from market volatility, i.e. buy low, sell high…. PROFIT

Bot:

So, in the ever advancing technological ecosystem we live in, there are now programs and “API’s” that can do this trading for the user automictically, basically you give a robot a certain set of parameters and it will trade automatically on your behalf, now there are pro’s and cons to this, the upside is you can “make money while you sleep” and not have to think about “where should I enter this trade” Or “should I exit the trade now”, the downside is you could probably make more in the markets than the bot if you refined your trading skills.

The reason plenty of individuals flock to these bots are for the hopes they will make money in their sleep and also so they don't have to deal with the emotional distress that trading involves.

Different types of Bots:

Before we get into this section I need to inform you that there may be some bots I do not include in here, but that's only because I don't know about them lol.

Grid trading bots:

The above chart suggest that the bot sets multiple orders, as the price of the asset goes higher the bot starts to sell some of the asset and as the price falls it will continue to buy more, in theory if this goes on long enough the bot will have accumulated more of the asset it is trading as the price fluctuates.

I have minimal experience with this bot, but I can say that the more consistently volatile an asset is (within a certain range) the more profitable this bot will be.

DCA bots:

I have set up a few of these in the past with the hopes of making a quick buck.

I did make some profits, but no “quick buck” I was looking for, if you look at the above chart, the first entry order will be the smallest order, and as the price falls your orders get larger, in turn lowering your average buying price, so when the trend finally turns around you are able to make some nice profits when the bot decides to sell.

Below are my results from running these bots for a month(ish):

Keep in mind this was a small account ($200), so this is quite profitable if you have the patience.

If you have a larger account this bot will be even MORE PROFITABLE, because you will be able to place larger and larger orders as the price falls, as this was a small account I ran out of capital because I was running bots on too many pairs 😅.

lets move onto the next set of bots, (my favorite) for lack of a better term we will call these “Special bots”

“Special” trading bots:

These bots are a little harder to define as they cover such a wide array of trading strategies, from “AI Bots” to “Sniper bots” etc.

Our first look will be at “Astrabit’s bot marketplace”,

Above we can see 6 different strategies (there are plenty more), each of these strategies apply to a different tradeable asset e.g. BTC, ETH, AVAX etc, each of these bots use a different strategy trying to give you the most profitable return.

The bots discussed prior to this were mostly free to setup, but as these are “Special bots” with special algorithms and parameters they are more costly, in return for the fee you are promised higher returns than the free bots….in theory.

This is just one facet of the trading bot ecosystem, if you delve deep into this topic you will find hundreds of “gurus” trying to sell you their “State of the art” trading bot for $1,000’s of dollars a month, I wouldn't recommend pursuing anything like that until you have dabbled with your own bots at least.

Secondly we have “Metatrader’s marketplace” this is for the traditional markets such as Forex, Metals, Commodities and Stocks etc.

These bots can range anywhere from $50 to $1500!!!, all of them are trying to accomplish the same thing in a different way, do your research on the profitability of these before purchasing.

Before I go on any more of a tangent we will continue to the next section.

How do they work

Lucky for us, we do not need any prior coding or trading knowledge to set any of these up.

Just grab the script and plug and play, and BOOM your bot is running. (Most “Special bots” platforms give detailed instructions on how to get started)

If you would like to set up some of your own FOR FREE, then I recommend checking out the following playlist, this is also how I got started.

But if DCA bots or Grid bots don't satisfy your cravings and you are more inclined to go after the “Special Bots” , then you will need to be familiar with how to link the bots to your exchanges API so the bot will have permission to trade with your balance.

Or if you are on the Forex side of thing you will need to familiarize yourself with the MetaTrader platform and how to setup “Expert Advisors”

Forex versus Crypto

Why is this important?

Well, one is SUPER volatile, while the other one is more predictable and has waaaaaay more history

The potential for higher profits is with Crypto, but simultaneously there is also higher losses.
Crypto has new assets being created on a daily basis, while Forex pairs haven't changed in decades.

I personally have done both, only slightly dabbling with Forex, but even with my slight exposure I do in fact prefer Forex.

If you have a fat wallet and big bank roll I would say doing some low risk strategies on some crypto pairs would make you some nice profits, but if you are looking for consistent reliable gains I would probably suggest Forex.

Risk Profiles

Crypto can see such unpredictable swings in price so therefore it is inherently more risky, but with higher risk comes higher rewards.

Are you willing to bet the farm for a chance to get 2–3x back?
Alot of people are not willing to take that risk, losing money is never a comfortable feeling.

Above is the chart for EURO against USD, the more predictable nature of it allows the bot to make more consistent but smaller profits, I consider this less risky than running a bot on BTC, or some Altcoins.

I believe I have covered all that my knowledge permits me to cover, if there is anything else you would like added to this article please do let me know.