In a recent article, we discussed effective strategies for cryptocurrency trading. An essential tip highlighted the importance of allocating at least 50% of your deposit to a reliable automated trading bot while learning cryptocurrency trading. In this article, we delve into the selection of the best cryptocurrency trading platform.
Crucial considerations for choosing a trading bot
For novice traders, the array of features on algorithmic trading bots can be overwhelming. Some boast convenient crypto trading apps, while others promise high profitability and present various crypto trading strategies. Selecting the best crypto trading platform can be challenging for beginners. Let’s explore key factors for choosing an algorithmic trading bot tailored for novices.
Ease of Use without Additional Knowledge
This is a primary concern for novice crypto traders. Most top cryptocurrency trading platforms offer the option to create your own bot, requiring you to choose settings. Crypto trading bot strategies typically fall into two categories: dollar-cost averaging (DCA) and the grid bot strategy.
DCA involves buying an asset at a local low and selling it when the price rises. If the price drops, you purchase more at a lower price, resulting in a lower average entry price. However, many DCA strategies suggested by trading platforms may lead to failure, requiring professional expertise for success.
Grid trading strategy is similar, defining a price range for future movements. The bot sets levels to buy in the lower half and sell in the higher one. While effective in sideways markets, unexpected trends can cause significant losses. For novice traders, opting for a crypto trading platform that provides a pre-set trading bot with proven statistics over two years is advisable.
Return on Investment and Equity Curve
Everyone aims to maximize earnings using a trading bot, with the monthly return on investment rate (ROI) being a crucial indicator. Normal monthly ROI in crypto typically ranges from 1% to 15% of the total deposit, depending on the risk associated with the trading bot. Beware of promises of excessively high returns, as they often indicate scams.
It’s essential to consider the equity curve, representing changes in invested capital over time. A reliable trading bot should maintain a steadily increasing equity curve without rapid drawdowns or crossing the zero line.
Subscription and Success Fees
Selecting a crypto trading bot also involves considering the charges and fees imposed by the platform. Several fee variants exist:
Fixed subscription fee: Ranging from $20 to $200, it’s important to ensure that the monthly fee does not exceed the expected monthly ROI. Annual subscriptions often come with discounts.
Percent of your deposit: This method is deemed less fair, as the platform’s fee depends solely on the deposited amount, offering no guarantee of profit.
Profit sharing: A reliable fee method where fees are paid only from the profit generated by the trading bot.
High watermark: While not a payment method, it ensures you won’t pay fees in case of losses during a trading period, indicating low-risk trading algorithms.
In conclusion, opting for a cryptocurrency trading platform that combines profit sharing with a high watermark is recommended. This ensures the trading bot’s performance and the platform’s commitment to your profitability. Red flags include platforms charging large fixed fees or taking a percentage of your deposit, indicating potential losses.
API Connection vs. Depositing
An additional crucial point is how the platform handles your money. Avoid platforms requiring you to deposit money into their accounts, as your funds should remain in your exchange account. Now, let’s analyze the most popular cryptocurrency trading platforms using the mentioned criteria.
Stoic AI
Founded in 2015, Stoic AI boasts significant market experience, having successfully weathered at least two bear markets and maintaining active operations. This enduring track record serves as a strong indicator of reliability. Let’s delve into the platform’s merits and drawbacks.
Advantages
User-Friendly Trade Bot Initiation
Stoic facilitates the initiation of its trade bot for users, including those with limited knowledge in crypto trading.
Diverse Trading Strategies
Stoic offers three readily available trading strategies suitable for beginners and seasoned crypto traders:
Long Only: Acknowledged as a high-risk strategy, it has the potential to yield an impressive +400% annual ROI.
Meta Strategy: Positioned as a moderate-risk option, it pledges a +50% annual ROI.
Fixed Income Strategy: Identified as the least risky, targeting a +26% yearly ROI.
Equity Curve
Stoic adopts a comprehensive approach by combining these three strategies. Users can choose from three modes based on their risk tolerance. Notably, Balance and Conservative modes allocate 65% and 95% of funds, respectively, to the Fixed Income strategy. This allocation ensures steadily increasing equity curves without significant drawdowns.
Chart 1. Strategy modes in Stoic
API Connection
Stoic employs API connection to execute trading strategies through your exchange account, assuring the safety of your funds. This practice aligns with the platform’s established tenure.
Disadvantages
Subscription and Success Fees
Stoic adopts a less reliable approach to fee structures, utilizing fixed fees for small deposits and a percentage-based model for larger deposits. This suggests a desire for guaranteed income, raising questions about their confidence in profitability.
Chart 2. Stoic’s fees
Return on Investment
Stoic AI algorithms exhibit low ROI for low-risk modes such as Balance and Conservative. Even a +50% yearly ROI may be considered insufficient for holding crypto on exchanges, especially when risking funds by keeping them in stable coins. In conclusion, Stoic AI stands as a seasoned crypto trading platform with a commendable track record. While it offers accessible features and diverse trading strategies, considerations regarding fee structures and ROI for certain modes are essential for prospective users.
Skyrex
Founded in 2017, Skyrex has undergone significant transformations in its trading platform. Their pivotal moment came in 2020 with the introduction of their first algorithmic trading bot, SmartBot, which has evolved consistently. A subsequent update, the AI Bot, employs advanced algorithms based on Elliott wave detection using machine learning. This ongoing development aims to enhance profitability month after month.
Advantages
Accessible Trade Bot for All Skill Levels
Skyrex offers a user-friendly approach, allowing individuals without prior knowledge of crypto trading to earn passive income monthly. The singular AI Bot caters to all market phases, requiring users only to create an API on their exchange, connect their account to the AI Bot, and commence the trading period. It’s a straightforward process.
Equity Curve and Return on Investment
The AI Bot employs a low-risk strategy during bear markets and increases risk during bull markets. This approach helps Skyrex avoid losses in turbulent market conditions while capitalizing on bullish trends. In 2020, the yearly ROI averaged around 85%, an impressive result considering the super low risk. All closed trades are transparently available on their website, allowing users to verify the performance.
Chart 3. Skyrex’s trading statistics
Subscription and Success Fees
As of now, Skyrex operates without a subscription fee, relying solely on profit sharing. This business model aligns with a super green flag, indicating confidence in the AI Bot’s performance and trading algorithms. The absence of fixed fees ensures that Skyrex’s income is directly tied to the bot’s success.
Chart 4. Skyrex AI Bot features
API Connection
Skyrex employs API connection to execute trades on user accounts, streamlining the trading process and ensuring a secure connection.
In summary, Skyrex stands out as a dynamic trading platform that has evolved significantly since its inception. The introduction of SmartBot and subsequent updates like the AI Bot demonstrates their commitment to advancing trading strategies. With accessible features, transparent performance records, and a profit-sharing model, Skyrex offers a compelling option for those seeking an innovative and reliable crypto trading experience.
EndoTech
EndoTech stands out by providing algorithmic trading bots designed for Bitcoin and Ethereum, uniquely catering to both institutional and retail investors. This article focuses on the retail trading aspect of the platform.
Advantages
Subscription and Success Fees
EndoTech employs a performance fee model with a high watermark, signifying confidence in their trading algorithms. Their income is directly tied to user results, a significant green flag indicating commitment to client success.
API Connection
Similar to the previous platforms, EndoTech utilizes API connection to execute their strategies on users’ trading balances, ensuring efficiency and secure transactions.
Accessible Trade Bot for All Skill Levels
EndoTech offers a set of trading strategies ready to be utilized even by novice traders. The platform’s user-friendly approach allows individuals to engage with the trade bot without needing extensive market knowledge.
Disadvantages
Chart 5. Endotech profitable strategy performance
Equity Curve and Return on Investment
The primary drawback for EndoTech lies in its annual return on investment, with a maximum of +35%, which is relatively low for the crypto market. While they provide clear statistics for all trades, there are concerns about the suggested connection to losing strategies, exemplified by the negative return of the 4h Alpha ETH strategy.
Chart 6. Endotech losing strategy performance
Summary
This article critically evaluated the essential aspects of choosing a cryptocurrency trading platform, comparing the best options based on these criteria. In the author’s opinion, Skyrex emerges as the top platform for generating passive income in the crypto space. Skyrex’s transparent statistics, API connection, and reliable trading algorithm contribute to its commendable standing.
While acknowledging the popularity of platforms like 3Commas and CryptoHopper, the article notes that these platforms may not be ideal for newcomers in trading. The absence of inherently profitable strategies makes them more suitable for experienced users who prefer tools to set up their own strategies.
In conclusion, each platform has its strengths and weaknesses, and the choice ultimately depends on individual preferences, experience levels, and specific requirements in the dynamic landscape of algorithmic crypto trading.
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