15 April 2021 • 8 min read
Creating your own trading bot has gained the unfortunate reputation of being a difficult, cumbersome and highly-technical process. And although this was true in the past - that understanding is now long-since outdated. In fact, the reality is quite the opposite, the rise in bot trading has ushered in a range of solutions scampering to be go-to for those who want to create bots. The problem is that even if their intentions are good, their execution is less-than-perfect and users on these platforms end up using black box, copy/paste bots that everyone else is using.
Trality does it differently. We put emphasis on the bot-creation process and encourage our users to develop their own, unique algorithms to outperform the rest. The best thing is that we do it in an all-in-one, community-driven ecosystem that is welcoming to both experienced and new users alike. Trality is the place to create, test and deploy your bots in the world’s most popular markets.
A Binance trading bot would be a trading bot that you create on Trality and deploy to Binance. Of course, you can deploy your bot to the world’s other most popular exchanges but many of our users find Binance—with its high volume and liquidity—the best place to trade.
Trading bots are just programs that trade on your behalf based on rules that you create for them. They execute functions and use AI to make decisions such as buying and selling automatically.
Trading bots give the bot creator unprecedented speed and efficiency. They communicate with cryptocurrency exchanges directly and place orders for you based on conditions which you determine in the bot-creation process.
Essentially, there are three moving parts to trading bots.
The signal generator takes care of the trader’s most cumbersome job: to scour the charts, execute technical analysis and identify the best opportunities to trade.
Risk allocation determines what percentage of your assets the bot is free to trade at any given moment
Execution is the moment that the bot actually makes the trade based on the rules you have written out. The bot will send a request via an API key which links it to the exchange platform and the trade will be made (this happens very quickly and multitudes of trades can be made in the space of seconds)
It doesn’t matter if you’re a casual trader, a Python whizz or at the very beginnings of your trading adventure, we will give you the tools to get it done properly within our community-driven and educational ecosystem.
Here’s how to get it done.
The first thing you will need to do is sign up to the platform. Simply head over there, enter your email address, choose a strong password and click on the confirmation link in your inbox and you’re ready to get creative.
Now it’s time to create your bot. You can achieve this in two ways: you can use our Rule Builder which is geared towards beginners or the Python Code Editor which was designed with coders in mind. For the purpose of this explanation we will be using the Rule Builder although the directions for linking the bot to Binance will be the same for both tools.
Simply click on ‘Create new bot’ and choose ‘Rule’ for the Rule Builder interface.
Here, you will also be asked for a few more pieces of information such as the exchange that you intend to trade this bot on, the quoted asset and even the colour of your bot so you can really customize it to your liking.
3. After that, you will need to choose the assets that you intend to buy or sell. You’ll find the options in the ‘Assets’ tab on the bot setup screen. Of course, only the cryptocurrencies that are available on the exchange you chose will be in this list. For the sake of simplicity, we will say USDT and our bot will trade BTC/USDT.
Now you can start laying the foundations of your bot properly. Go to the ‘Settings’ tab where you can specify exactly how much of your portfolio you want your bot to be able to trade with.
4. Now the real fun begins. It’s time to build your strategy. Head over to the ‘Strategy’ tab where you can put together your own indicators to build your bot one step at a time. There is a massive library of indicators so feel free to get creative and use the backtester to see how your bot might perform. If you’re not sure where to start, we put together a very informative guide to strategy building right here.
Don’t forget to hit the ‘Expert’ switch to toggle even more useful settings to help fine tune your bot to the point of peak performance.
5. Here comes the moment you’ve been waiting for. Backtesting. You’ve put in time and effort to create this bot but is it going to work? Well the great thing is that you can test it over and over on historical data until your bot is sharp and ready for any market scenario. A good place to get started backtesting is simply running your bot against the past few months or the past year. After the backtest is done, the results will show up on screen including all of the important information you need to understand if the bot is doing its job properly (e.g. total return, maximum drawdown, number of trades executed, etc.). What’s greater still, is that all of your backtesting history is recorded, as are the bot’s settings which means you can switch back and forth between earlier and later versions seamlessly.
Read more about how to backtest like a pro in our article.
So you have built and tested your trading bot and you’re excited to get it out there in the wild cryptocurrency market. How do you get it running on Binance? Well the first thing you need to do is add Binance as one of your exchanges.
To do this, you must visit your Trality settings.
Simply click ‘Settings’ at the bottom left of the dashboard or click the three dots to reveal the Settings button.
From there you should already be in the 'Exchanges' tab.
Select 'Add new exchange' in the upper right
Choose whether you want to add a virtual exchange account for paper trading or a live account with your Binance account
If you want to add a live account then you will need to prepare API keys (and potentially passphrases) beforehand on the exchange itself
To help you along with that, Binance has created a guide on how to generate an API key and passphrase.
Once you have set up your new exchange on Trality, it could not be simpler to deploy your bot.
First of all, click ‘Bots’ on the left of the dashboard and choose the bot you wish to deploy. Once you’re inside your bot creation screen, you will see a deploy button which looks like this.
Just click that button and select the Binance account that you just linked. You will be greeted with a couple of questions which you can read through. Just confirm that you wish to deploy the bot and voila! The bot will start running. We’ve prepared a small video showing you how it’s done below.
If you’re trading manually on Binance then that’s fine. But that’s about it. The more you read into automated trading, the more you will understand that it’s simply not the best way to trade when there are other, more effective solutions available. Bots are superior traders in virtually all aspects of investing. Let’s get into it:
The old statistic goes that more than 80% of private investors aren’t making money at all. In fact, they are losing money due to a variety of factors. It’s hard to not get emotional on the wild rollercoaster that is the cryptocurrency market and traders are inclined to get FOMO (fear of missing out) or FUD (fear, uncertainty and doubt) which leads them to make decisions that are not based on hard mathematical calculations.
Bots simply don’t have emotions and therefore use only cold, hard data to make their choices and usually - they are right.
Instead of being one of those 80% who are losing. You can make the change to be one of the 20% who are effectively using bots to invest profitably.
As we mentioned before, bots can execute far more trades than you can at any given moment. This is beneficial to any trader who knows that getting in and out of positions quickly can be the difference between making profit and losing. Are you beginning to understand why Wall Street institutions have been using this tech for decades?
This is one of the greatest advantages that bot traders have over manual traders. On Trality, you can automate your strategy, build a bot and backtest it on historical data until you are happy with it. In fact, you can also test it on current data via our awesome virtual trading feature that allows you to run your bot in a virtual environment therefore risking none of your valuable cryptocurrencies.
Why is this so important? Well, you can test and refine your bot to the point where you feel assured that it will perform.
There is no getting rich quick in the crypto markets. Unless, that is, you have the luck of the Irish. Trading bots are not about being a money-making machine but instead about minimizing your risk and not banking on big bets. Running a couple of trading bots on different symbols allows you to spread out any risks associated with your strategy and try out different techniques while keeping your assets safe.
To achieve anything in life, you need discipline. But that is easier said than done especially when it comes to trading. Automating your strategies will help you attain some form of discipline over your investments because you won’t be doing it - your pre-trained bot will handle that.
You don’t need to spend your whole trading career seeing losses anymore. Be like one of the top 20% of traders who is actually making money consistently by building a bot that works for you day and night. It won’t miss a trade and it will not allow itself to impulse trade on gut feelings or questionable news sources. Just cold, hard data and an algorithm.
Don’t be a stranger. We encourage you to explore our state-of-the-art tools absolutely free and see for yourself how easy it is to create, backtest and deploy your own trading bot on Binance.