A trading bot has a few major components regardless of language & framework used. We also wrote

Running an algorithmic trading strategy blind is the best way to lose all your money. To see if your strategy works, you must backtest it against historical market data.

Collecting this high-quality, tick-by-tick data is usually done by tapping into exchange APIs.CCXTis a great library that enables you to interface with a bunch of exchanges in the same manner.

In order to simulate a realistic backtest, you must take into consideration latency, slippage, and trading fees.

Usually you can retrieve historical price data, but you cannot retrieve historical order books. Some of the data must be streamed. This makes high-quality a scarce and valuable resource.

The code that implements the strategy actually makes up a tiny fraction of the whole project. But here is where you would specify the logic & calculations which determines when to trade, and in what quantities.

Once youve created a strategy, you should be able to backtest it in order to analyze its performance. Typically, only strategies that are very profitable make it out the backtesting phase because so much can go wrong in the real world. Be careful here ofoverfittingyour strategy to historical data.

Once your strategy is decided on, the next step is order execution. Consider this a bridge between your strategy and the exchange you are trading on. This code turns your strategy into order request API requests that the exchange can understand.

Some bots will have a paper trading feature, which will allow you to simulate your strategy in real-time with fake money.

Lastly, you want to let your bot run autonomously. Leaving your computer on all day is not a good way of doing this. You want to spin up a server and set-up a job scheduler to execute live strategies autonomously.

I designed and created a trading bot for cryptocurrencies. Its calledHodlBot. After using it for myself, I saw that it could also help others invest in a smarter way, but also save them time. Were strategy agnostic, and at the end of the day our job is to help you automate the boring stuff.

Heres a few of the things we pride ourselves on:

– Not every strategy can beat the market. For the average trader, market indices are a great choice because they are proven to beat most active traders in the long-run. As a passive & risk-conscious investor, indices are very dear to my heart.

As a power-user, you can customize and create your own portfolios in the blink of an eye. E.g. Select the top 30 coins by market caps or choose 20 different coins and give each a fixed %.

– Rather than launching a strategy blind, you can use backtest your strategy to see how it would have performed in the past. Backtesting is a vital part of the research process.

You want to automate as much of the boring stuff as possible, such as portfolio rebalancing.

A rebalanced portfolio is shown to improve returns and decrease risk in the long-run.

HodlBot is free for users under $500 and $10/month for anyone that has more than that. Most other cryptocurrency trading bots charge 5-10x as much.

We write about everything that is going on and share everything with our users.

Heres a blog we wrote on the recent Binance API attack.

Its really well-designed with a modern UI. Simple to pick up for as a beginner, but also capable of a lot in the hands of a power-user.

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