Following an initial coin offering (ICO), startups and traders anxiously await to see which cryptocurrency exchanges will include the new coin. But once the coins are listed, investors who want to trade in certain coins may find it difficult to efficiently navigate the over 100 cryptocurrency exchanges. Beyond finding the cross-cryptocurrency pairs they want to trade, traders are challenged to find the best pricing, liquidity, and risk management instruments. Arbitrage opportunities — buying low on one exchange and selling high on another — are abundant but difficult to execute. Despite the administration headaches, traders are signing up with more than one exchange to access the coins, spreads, and liquidity they seek.
A new cryptocurrency exchange on the blockchain is aiming to provide a streamlined trading experience across the many cryptocurrency exchanges. The 3 Commas trading platform links to 12 of the top cryptocurrency exchanges by volume. Traders are provided with their own API key to automatically sign up with its participating exchanges. The exchanges include Bittrex, BitFinex, Binance, 0 Bitstamp, KuCoin, Poloniex, HitBTC, Cex, GDAX, OKEX and Huobi, and more may be added. The high volume exchanges are more likely to provide good liquidity in listed cryptocurrencies.
The 3 Commas platform has made trading across these exchanges and cryptocurrencies seamless. During a trade order, drop down menus prompt the trader for their preferred exchanges and cryptocurrencies. The trader can choose between a simple bot — one currency pair — or a composite bot — multiple currency pairs. There are minimum trades for each coin, for example, .001 for Bitcoin and .01 for Ethereum.
The rise and fall of crypto trading bots
Traders can easily be misled in the current crypto trading bot market where claims of 50 percent returns are not unheard of. Offers abound for customized automated arbitrage bots from traders who made thousands of dollars trading Crypto Kitties. The lack of historical pricing data in many cryptocurrencies makes it more difficult to substantiate such claims and evaluate a trading bot in a live trading environment.
While many trading robots and technical indicators are being developed for the cryptocurrency markets, few have the long track record enjoyed by trading bots in the forex markets. As a recent entry to cryptocurrency trading, 3 Commas is quickly distinguishing itself. While not a bot per se but a platform for traders to develop bots, 3 Commas’ safety trade — a mechanism for smoothing out volatility to produce higher returns — is giving bot builders a head start. The average monthly profit of 3 Commas’ 30,000 plus active traders is 15 percent. Daily trading volume is $10.5 million.
Backed by a robust analytics suite, 3 Commas provides a transparent rating of the daily best performing bots and currency pairs. For copy traders, a copy button beside the currency pairs makes it easy to mimic a trade. The performance history of the bots by profit is also provided.
Following the signals
With 15 percent returns, copying social traders on 3 Commas could more than pay for the monthly dues. The monthly pricing of 3 Commas’ platform and trading tools is in the mid-range, from $25 to $84 for individuals. This compares with, at one end of the price spectrum, the most popular crypto bot, Gekko, a free tool providing basic pricing indicators, take profit and stop loss orders, and historical data used in trade simulations. At the high end are bots such as Cryptotrader and Haasbot, which can run over $500 for a monthly plan. An important distinction is 3 Commas directly links to all 12 exchanges, enabling traders to monitor all exchange activity on one screen and utilize the same set of trading bots and analytics.
The system itself applies a set of proprietary technical indicators to provide a price signal to the trader. These tools are currently available on Binance and are expected to be rolled out to the other 12 exchanges. With over 100 bots already developed and plans to add more exchanges, 3 Commas could become the ‘Metatrader’ of cryptocurrency trading platforms.