How to Build a Crypto Trading Bot

There are lots of reasons as to why companies and individual traders might want to build a crypto trading bot. It might be to allow them to buy and sell cryptocurrencies such as bitcoin without needing to physically undertake  transactions. Another common reason for creating a crypto trading bot is to make it commercially available to others for a fee.

Whatever the reason, crypto trading bot development is a lucrative field, provided you get it right. In this article, I want to examine how companies can build their own trading bot so that they won’t have to pay to use existing ones.

I will begin by defining exactly what a crypto trading bot is before explaining how such programs operate. To do this, I will take a look at the different types of trading strategies these bots use before finally going on to explain how to create your own trading bot.

Since the intention of this article is to provide an overview of the process, I will add links at the bottom of the page to articles that cover the process of creating a cryptocurrency trading bot in more detail.

Please keep in mind that articles often outline bot architectures and algorithms that quickly go out-of-date. For this reason, all of the articles I reference should be viewed as guides rather than a step by step process to follow.

If you don’t have experience creating a trading bot then you should seek expert help to do so. A great tip on how to find the most up-to-date information and approaches is to hit the popular developer forums that include CodeProject and Stack Overflow.

Sites such as these are loaded with topics that will help and also serve as a great way to tap the best programmers for free advice.


What is a crypto trading bot?
Different crypto bots strategies
How to make your own crypto trading bot
Go it alone: Download an exisiting open source bot
Start from scratch: Get a great dev team together and start coding
Key steps to creating a trading bot from scratch
Cut out the hard work: Pay an outsource development team to create your trading bot

What is a crypto trading bot?


Since the beginning of the cryptocurrency boom that started in early 2017, people all around the world have been clamoring to trade in bitcoin and other altcoins. The problem with any commodity in the global marketplace is traders cannot be at their station 24 hours a day, 7 days a week.

Apple co-founder and tech guru Steve Wozniak recently admitted that he had sold his entire holdings of bitcoin because he had grown tired of constantly looking to see what the price was. Even the most dedicated trader will not want to spend their entire life staring at cryptocurrency price charts either.

Trading in cryptocurrencies is particularly addictive because the market is highly volatile. Bitcoin prices can and have dropped by as much as 25% in a day. While investors who are in for the long term might not worry about taking advantage of such fluctuations, cryptocurrency traders can make huge amounts of money from such volatility.

The solution to this problem is the trading bot. Such bots have been used by companies to set buy/sell commodities on global stock exchanges for decades. Trading bots help to automate the process and thereby relieving pressure on companies and traders.

Trading bots are software programs that use API’s to interact with financial exchanges. They actively monitor exchanges around the clock and will react in accordance to whatever predetermined criteria they have been programmed with. To give a basic example, if a trading bot has been told to buy a commodity once the price hits $1 or lower, and sell once it hits $2, it will act in accordance with these limits, hopefully making a profit.

A cryptocurrency trading bot operates on these exact principles to facilitate the buying and selling of bitcoin and other cryptocurrencies.

Different bot trading strategies

Trend Following Strategy

This is the simplest trading strategy in which the bot responds to direct market changes. Trend following doesn’t require complex algorithms that need to factor in such things as predictive analysis etc., and so are very simple.


The arbitrage model involves cryptocurrency bots exploiting the difference in prices between the numerous cryptocurrency exchanges throughout the world.

Since there is no one centralized exchange to determine the price of a cryptocurrency – a role that with fiat money is a filled by the central banks – for this reason prices vary from exchange to exchange.

South Korean exchanges, for example, have historically had a higher price than U.S ones, so offering good potential profits for anyone trading between the two.

Trading bots help traders take advantage of this differential by allowing them to trigger trades when certain price differentials are met.

Market Making

The market making strategy allows traders to buy and sell high volumes of currency and profit from the spread. In order to be able to trade such volumes, market making traders rely on trading bots.

For a complete list of the main types of trading strategies you can read this list.

List of the best cryptocurrency trading bots:


How to make your own crypto trading bot


Go it alone: Download an exisiting open source bot

There are several ways that you can create a cryptocurrency trading bot. The cheapest and easiest approach is simply to find an open source crypto bot that you can download and use straight away. This requires only a minimal amount of technical knowledge and helps to keep costs and development time to a minimum.

However, in order to build in your own features, continue development, and fix any bugs/security issues etc., you will need to retain at least one expert software programmer. Since the bot has already been developed, the downside is that this approach often makes it harder to build in your unique features or adapt its trading algorithm.

Best open source crypto bots:


Start from scratch: Get a great dev team together and start coding

Cryptocurrency trading software development can be both a personally and financially rewarding thing for those people who are able to be successful at it. The most important part of this approach is ensuring you have a team that is filled with passion and dedication, as well as all the relevant skills and experience, of course.

The most basic trading bot can be built in a matter of weeks. One such example is the arbitrage crypto trading bot built by Carlo Revelli. His bot allows for the trade between two exchanges, Etherdelta and Bittrex, and was created using his “own python etherscan API wrapper and pythereum to create the transactions and etherscan to publish them”.


Carlos crypto trading bot contained around 400 lines of code and took 2 weeks to write.

You can read more about how he created his bot in his article How to make your own trading bot.

To create a more sophisticated trading bot, which can trade on multiple exchanges, will naturally take more time. More time will also be needed for creating the algorithm and ensuring that there are no obvious security flaws which can be exploited by hackers.

Key steps to creating a trading bot from scratch

  1. Decide on the programming language you will use.

It is a good idea to select a familiar programming script to write your bot with. Python, Javascript, Perl, and C are the most commonly used languages for crypto bot development. The advantage of using such well-known programming languages is the ability to easily bring in other developers to help write/fix the code should you need to.

  1. Getting hold of your APIs

Before you begin coding you will also need to get hold of the APIs that allow your bot to access whichever exchanges you want your bot to trade on. The good news is that all of the main cryptocurrency exchanges offer APIs to allow access to their currency data.

API links for main currency exchanges:

       3. Create accounts with all the exchanges you will use

Account creation is a relatively straightforward task. Please keep in mind that different exchanges have different procedures for setting up new accounts. Some exchanges require personal information to be vetted and approved while others allow for anonymous trading. Vetting takes more time, so factor this in when project planning.

  1. Pick a bot trading model

Trend following, Arbitrage or Market Making etc.? Keep in mind that more complex trading models will require more development time.

  1. Architecture

Your bot’s architecture will have massive implications as to how it functions and performs. Key to a how a bot operates is deciding on the algorithms it will use to interpret data. Algorithmic trading is a massive industry that makes billions of dollars each year in profits.

For any algorithm, the mathematical model on which it is based must be solid. If it is not then it is likely that the bot will either prove to be unreliable or will end up losing money. You can read emore on the topic of mathematical modeling via this link.

Part of the process involves clearly defining the type of data you want your algorithm to interpret. For more complex trading models you will need your bot to be able to identify such things as market inefficiencies etc. This means it will need to be able to analyze historical trends as part of its function.

All of these things need to be considered before getting down to creating your bot.

  1. Creation

Once you have outlined your bot’s architecture you can get coding. Naturally, this will be the most time-consuming part of the process. If you have a team of developers working on different parts of the bot then it is vital to make sure that you have good project management/communications procedures in place.

Start by opening a group chat on Slack or a similar program where every member of the team can talk to one another. Hold weekly meetings to make sure each and every member knows where the project is and what problems have been encountered etc.

  1. Testing

Testing has two key functions. Firstly, it is to make sure your bot functions as it should and is able to cope with the kind of data fluctuations that will be thrown at it. Factors such as risk vs. reward and modeling errors such as ‘overfitting‘ should all be evaluated at this stage.

The second function is in fine-tuning performance. Keep in mind that what I mean by performance is the optimizing the kind of behavior that you want your bot to exhibit.

By increasing the level of risk that the bot factors in, for example, you increase the chance of higher returns but also decrease the effectiveness of your bot to respond to high levels of price fluctuation etc.

  1. Live Deployment

Once you have ironed out any issues, you are now ready to set your new auto cryptocurrency trading bot loose on the markets. While you might dream of making instant fortunes, remember that no platform in history has ever been launched without experiencing teething problems.

A good trading bot is an evolutionary thing. The more you put into its development the more you will get out. Constant monitoring of your bot’s performance is definitely recommended, at least for the first few months. After that, you should be confident enough to let your bot get on with it without much need for supervision.

Cut out the hard work: Pay an outsource development team to create your trading bot

If your company wants to ensure a smooth and easy project development then the best way is to hire a professional development team to do the hard stuff for you. A good dev team is likely to get the project completed in a much faster time and ensure that the bot is the best it can be.

Since a cryptocurrecny trading bot will most likely be handling large sums of either yours or your client’s money, reliability is hugely important. Currency markets are built on trust so your bot will need to be 100% reliable for it to be successful.

If you have the budget, do yourself a favor and outsource the project to a great development company.

A word of warning

While I hope this guide has provided you with a good understanding about cryptocurrency bots and the process of creating one, I feel that I should add a few words of warning regarding trading cryptocurrency in this way.

Assuming that you have built yourself a world-class trading bot that has no security or reliability issues, traders still need to be aware of the dangers posed by trading in the cryptocurrency markets.

To start with, cryptocurrencies are still relatively new, meaning the market is largely unregulated. Prices are prone to massive fluctuations, which as I said, does offer the chance to make enormous profits, but inversely also could result in huge losses. Don’t invest money you cannot afford to lose.

A much better idea, now that you have created such a great trading bot, would be to charge others for the pleasure of using your bot so that you can be assured of making money, and without having to take any risks either. Whatever you decide, good luck in creating a great crypto trading bot.

Other Resources:

Let’s write a cryptocurrency bot

How to create a Cryptocurrency Trading Bot in Node.js

Building a Simple Alt Coin Trading Bot Using Bittrex API

Learn how to build an automated trading Robot

How to Manage a Development Team

Aran Davies

Aran Davies

Blockchain Expert | Developer | Writer | Photographer
Aran Davies