An In-Depth Guide to Coinbase Trading Bot
Founded in 2012, Coinbase (Nasdaq: COIN) is a popular and easy-to-use US-based regulated cryptocurrency exchange that supports a wide range of digital assets. It is safe to use, but some may find its charges relatively high. That said, despite its high fees, there’s no denying that Coinbase is one of the most popular crypto exchanges, both among newbies and advanced traders.
Thus, traders turn to Coinbase for profitable trades. But what if they want to trade 24x7 and remove their emotions? That doesn’t sound feasible without hiring a round-the-clock team of traders. Does it? Well, there’s an easy way, and it doesn’t need a huge budget to pull off.
All a trader needs is a trading bot to automate their crypto trading experience and speed things up.
A crypto trading bot is a software designed to automate trades and implement them on the trader’s behalf. It has pre-defined strategies to implement, but users can often also write code to develop a unique strategy using state-of-the-art tools as well to minimize risk, limit losses, and grow profits.
Why Trading Bots?
Even the best of traders can’t track the crypto market 24x7. This is where crypto trading bots can help take advantage of all the opportunities, even when the user is sleeping. In fact, it is estimated that half of the internet traffic is made up of bots that crawl webpages, chat with users, and perform other tasks.
Crypto trading bots execute functions using pre-defined strategies and parameters. The financial industry makes extensive use of algorithmic trading bots due to their ability to emotionless trading, backtesting, paper trading, risk diversification, discipline, and higher trading speed.
But, of course, they don’t guarantee success as that depends on many factors such as clear goals, patience, knowledge, expertise, and strategies.
Do Coinbase Trading Bots Work?
Coinbase trading bots eliminate human emotions from the equation, allowing users to trade crypto assets based on trends and data automatically. By working round the clock, it captures all the potential opportunities while minimizing risk. This way, a Coinbase trading bot allows users to increase their profit.
Trading bots usually support major crypto exchanges, including Coinbase, making it easy to make trades across different platforms and make the most of this tool for cryptocurrency investments.
Using a trading bot to implement trades is absolutely legal, but when looking for one to use on Coinbase, a trader needs to ensure that it is compatible with the exchange. Now, the question is, which bots are worth the time and money?
Can I use a trading bot on Coinbase Pro?
Yes, traders can use a crypto trading bot on Coinbase Pro — in fact it is recommended. Coinbase Pro offers some features that are pertinent for trading bots such as limit orders, full order books, and reduced trading fees. If you have a Coinbase account you also have a Coinbase Pro account automatically. From here on we will assume that you are using Coinbase Pro as all trading bots will work better there.
Choosing the Best Trading Bot for Coinbase
There are several trading bots for the Coinbase Pro exchange, so a user can trade free of human emotions and with an unbiased strategy. However, when choosing a trading bot, they must look beyond price. Besides features, good customer support, reliability of the bot, supported exchange platforms, community, and security are the things a user should consider.
Coygo offers integrated solutions to make trades smooth and straightforward with real-time charts, indicators, and technical analysis. Besides a user-friendly interface, Coygo supports the most prominent crypto exchanges and offers unparalleled security due to the fact that you don’t have to trust their cloud — your account credentials are only stored encrypted on your machine. Coygo’s servers never have access to your accounts.
This Coinbase trading bot offers near-zero latency and real-time data feeds that can react to market changes in seconds or even milliseconds due to its real-time, high-frequency trading nature.
Coygo has two paid plans: Casual and Pro, each which include a free trial for full access to the product, as well as a free plan.
Once a trader has chosen the right trading bot strategy, they have to connect their trading bot to their Coinbase Pro account and link its API keys to the trading bot. That’s it! The Coinbase trading bot is all set now.
Coinbase Pro offers a pretty reliable trading setup and provides a dependable API connection which minimizes connection issues. As for Coinbase Pro APIs, they are divided into two categories, trading, and feed; the latter brings market data and is available for the public, while the former requires authentication to provide access to placing orders. It further offers a FIX API for institutions’ order management and trading and REST API with full access to the account management, trading, and market data functionality.
But remember, paying taxes on profits is mandatory even when trading using a Coinbase trading bot. A trading bot is simply trading on exchanges for its users. So, to report crypto taxes, a trader must use the same process they would have implemented if they were trading everything on their own. So, make sure to keep track of all the trades.
So, to capitalize on crypto investments on the widely used exchange Coinbase, trading bots can help traders put their best foot forward, learn from the experts, and automate their trading.
When it comes to Coinbase trading bots, a trader can implement several different trading strategies such as arbitrage, DCA, Options, Futures, HODL, accumulation, triggers, scalper, smart orders, grid, sandwich, market making, portfolio management, and many more — it’s up to you to find what works best for your personal needs.