Crypto Trading Bots Comparison: 20-Day Profit Challenge

With the growing influx of new investors into the world of cryptocurrency, many are now looking to utilize automated trading software (bots) in order to take advantage of price fluctuations while they are asleep/away from their computer. Out of all the options available, which one provides the best results? We attempted to find out by putting them to a 20-day profit challenge where the two leading platforms: 3Commas and Bituniverse were put through a real-world performance test. This testing was conducted in a live market and evaluated based on many metrics such as performance level, ease of implementation/usage and technical efficiency of their grid bot strategies.

Test Environment Setup

We tested both platforms with the same settings (no different entry points/exchange liquidity) to provide a basis for comparison. This is critical as there are many variables that could negatively influence an automated trading system.

Investment Amount

We placed $1,000 USDT into each trading bot to allow plenty of capital for creating a dense trading grid with sufficient liquidity to absorb large price fluctuations without causing an instant liquidation or depleting all base currency.

Timeframe

Both bots were tested for 20 continuous days. This was done to demonstrate performance through multiple market cycles as well as experiencing “boring” sideways movements as well as sudden surges in volatility (which is key in determining how resilient the grid trading strategy can remain through a sustained period of time).

Market Conditions

The 20-day period of testing was conducted during a fairly moderately volatile period of the Cryptocurrency markets. Much of the test was not in a clear Bull or Bear cycle but rather demonstrated the “saw-tooth” or sideways pattern resembling a sideways trading pattern with very brief periods of 5-7% price fluctuations. According to the CoinMarketCap website, based on data from the period in question, the overall market capitalization of cryptocurrencies has remained steady during this period, making it an ideal time to use a grid bot to buy at lower rates and sell at higher rates.

Trading Pairs

Binance Exchange operations were conducted using two trading pairs — BTC/USDT and ETH/USDT. These two pairs have the highest level of liquidity and the tightest bid/ask spread available which enables the bot to execute trade orders instantly using the API without exposing the bot to an excessive amount of slippage.

Platform Configurations

The overall configuration and interface of the trading platform is critical to the success of any automated trading strategy. Here are our configurations for each of the two contenders. Both platforms — Bituniverse and 3Commas — have a varying degree of configuration and flexibility.

Bituniverse Settings

Bituniverse has become well known due to its "AI Strategy". The parameters used were those recommended by Bituniverse; the upper and lower bounds were determined using the last 7 days' worth of price action. By using a grid with a defined a total of 50 grids with a "neutral" configuration within Bituniverse, it provides a seamless mobile-first trading experience which allows new traders to easily begin trading on Bituniverse.

3Commas Settings

The 3Commas setup provided significantly greater control and adjustment capability when defining the grid limits. Rather than relying upon the automated strategy of Bituniverse, in the 3Commas interface, we set the grid range based upon the defined support and resistance levels. In addition, we utilized two unique features of the 3Commas application, "Trailing Up" and "Trailing Down". Both of these features enable the grid to move dynamically with the trends in the market. This provides a highly sophisticated trading experience which has made the 3Commas platform a popular choice among professional traders who seek enhanced levels of control and customization over their portfolio.

Feature Comparison

Overall, while Bituniverse positions itself as a “set-it-and-forget-it” style trading solution, 3Commas offers a complete trading package. 3Commas has a feature called paper trading that allows users to test automated bots without using real funds. This is particularly helpful in initial calibrations of the automated trading system for automation purposes.

Strategy Implementation

The strategy will be based on grid trading. It consists of placing orders based on price increments (a grid) and automation enacts the buy or sell order according to the price's movement up or down from that grid.

Risk Management Tools

In managing risk in cryptocurrency trading, the most important risk is losing your capital as opposed to chasing after gains. Therefore, we utilized a stop loss set at 10% below the bottom grid boundary to protect the capital from larger losses. By using the integrated take profit and stop loss options in the bot settings for 3Commas compared to the manual process that Bituniverse employs, it was easier for 3Commas to manage risk.

Profit Maximization

To maximize the efficiency of the trading strategy, we set the profit per grid to be within 0.5%–0.8%. This means that if there are price fluctuations or movement within that range, trades will be completed on a daily basis. Additionally, we researched and tested the 3Commas bots, including the DCA bot and Signal bot; however, the grid bot had the most value to automate within this particular assignment.

Performance Analysis

After 20 days of auto trading, there were clear differences in how the different trading tools performed in a cryptocurrency environment based on analysis of the data.

Profit Comparison

When comparing profits, the profit generated from 3Commas was a net of 6.4% ($64) providing an opportunity to capture an additional profit due to the Trailing feature on the bot after a brief period of upward movement. Bituniverse to date has made 4.8% ($48) in net profit, and while this is consistent, the bot did miss out on gains when the price moved past the fixed AI-generated range.

Fee Impact

Both bots executed hundreds of orders on exchanges such as Binance where the fees can erode profits from trading. 3Commas will automatically track all fees for you and give you net profit with consideration of the fees for trading long term on 3Commas. Therefore, high-frequency or multiple types of trading would require care and monitoring of the exchange account balance to help with covering these micro-costs.

Technical Capabilities

A 3Commas account is not merely a bot; you will be receiving an entire ecosystem. The app and website platform of 3Commas provides a level of holistic analytic information that would not generally be found from something like Bituniverse as well. 3Commas accounts for social trading and has third-party trading signals courses from TradingView as well.

Strategy Flexibility

The stability of the 3Commas APIs, for both free and pro plans for connecting to Coinbase or Binance rarely experiences latency issues — the information about smart trading indicates that the bot is only as good as the API connection to the exchange.

Key Findings

In our 20 days of automating our trading activities with both players provide several insights.

• Efficiency: Efficiency of 3Commas based on trailing was 2% higher than Bituniverse.
• User Experience: Bituniverse is very beginner-friendly in that it allows the user quick buy/sell, size of trade with a low learning curve.
• Versatility: 3Commas has more pricing options, as well as subscriptions, than most other trading systems so it is scalable from a hobbyist to a professional level.

The Bottom Line

The Profit Challenge exercise has confirmed that although automated trading can be very effective, but automated trading platforms will yield varying results depending on the type of trading the trader is doing. Therefore if you're an investor looking to automate your trading strategy with a high degree of precision, 3Commas is your best bet. However, if you're looking for simplicity, Bituniverse is still a good place to start. While both Bituniverse and 3Commas can help you trade profitably, 3Commas has the highest potential for profitability.

FAQs

Which features are the most important when using a bot to trade profitably?

Most important are the Trailing Up and Trailing Down features. These allow your grid bot to trail behind and follow the price outside of its original range; therefore preventing it from going out-of-bounds.

How can trading fees negatively affect my trading performance?

In high-frequency automated trading, fees can consume 20% - 30% of your gross profits. It is essential to use an exchange with low fees or to use the native token (e.g. BNB) of that exchange to save on fees.

What risk management tools are required to trade automatically with a bot?

A stop loss must be used to keep you from holding "heavy bags" when the price of the market drops dramatically. Another tool that I recommend before trading with real capital is paper trading, as this allows you to test out your trading strategy without risking any money.

How significant is using the trailing stop feature?

The trailing stop feature is absolutely critical to be able to capture profits that result from sudden price movements. A crypto trading bot without a trailing stop feature might sell too early and not be able to buy back into the market when the price falls.

What should I set my grid up as when trading crypto?

For most of the 3Commas community users, grids should consist of 40-60 levels and have a profit of approximately 0.6% per grid level.