Are you tired of slow reactions and emotional decisions? It’s time to evolve and use modern algo bots. In this article, we will check out some top trading bots like Hummingbot, Zenbot, 3Commas, Shrimpy, and MetaTrader EAs. We will explain to you how they automate your trading strategies in both the cryptocurrency and traditional financial markets. Also, you’ll learn about the pros and cons of using bots.

Next, we will tell you how our advanced tools, like Tradermap Pro and Tradermap Lite, can detect market-making bots and provide deeper insight into market conditions. Let’s get started. 

What Are Trading Algo Bots? 

Trading Algo Bots are “automated systems.” These bots automatically perform trades for traders or investors based on pre-set

• Rules,
• Trading strategies, and
• Technical indicators.

For example, say there is a “moving average crossover bot.” It is specifically programmed to buy when a short-term moving average (e.g., 50-day) crosses above a long-term moving average (e.g., 200-day). The bot can also react to other technical indicators, such as a volume spike. 

It must be noted these bots are specifically designed to make trading decisions and execute trades much faster than humans. Also, they remove emotional biases that often lead to poor decision-making. For more clarity, let’s check out some key features of trading bots:

Are you looking for more efficient ways to trade? Check out our powerful Algo trading tools for precise, real-time data analysis.

How to Optimize Trading Efficiency

Trading bots are excellent at automating tasks. However, they perform best when combined with real-time market analysis tools, such as our tool Bookmap. This tool offers a deep visual analysis of

• Market liquidity,
• Order book data,

and

• Real-time trades.

By using our tool, traders can get a more detailed picture of market activity. This information helps to fine-tune the bot’s strategies and improve decision-making accuracy. 

5 Best Algo Bots for Futures & Stocks Trading 

Below is a list of 5 best algorithmic trading bots you can consider while putting money in futures or trading in stocks: 

1. Hummingbot

Hummingbot is an “open-source” trading bot. It is specifically designed for automating trading strategies in a variety of markets, such as cryptocurrency, futures, and traditional assets. This bot supports different strategies, like market-making and arbitrage. For more clarity, let’s check out some of its key features:

For a greater understanding, let’s check out some examples and see how you can execute popular trading strategies using Hummingbot:

• Market-Making Strategy

• • • A trader sets Hummingbot to continuously place buy orders at $9.90 and sell orders at $10.10. 
    • When the market moves within this range, the bot captures the spread.
    • In this way, the trader earns a small profit each time the market fills the orders.

• Arbitrage Strategy

• • A cryptocurrency might be priced at $1,000 on one exchange and $1,020 on another.
  • Arbitrage bots buy low on the cheaper exchange and sell high on the more expensive one.

2. MetaTrader Expert Advisors (EAs)

Expert Advisors (EAs) are algorithmic trading tools. They are available on MetaTrader platforms (MT4 and MT5). These EAs automate trading strategies based on predefined rules or technical indicators. They are particularly popular among forex and futures traders. Let’s check out some key features of MetaTrader EAs:

Now, let’s study an example:

• Say a trader sets up an EA to trade S&P 500 futures based on Fibonacci retracement levels.
• When the price reaches a retracement level (e.g., 61.8% or 38.2%), the EA automatically places a buy or sell order.
• The trade is executed with precision and without emotional interference.

Program your trading bots with MetaTrader EAs and back them up with real-time market data from our platform for better results. 

3. Zenbot

Zenbot is an open-source and lightweight algorithmic trading bot. It provides traders with flexibility and control over their trading strategies. This is built for both backtesting and live trading. It covers various markets, like cryptocurrencies, stocks, and other asset classes. Unlike some other trading bots, Zenbot is highly customizable. It is an ideal choice for traders who want full control over their automated trading strategies. Now, let’s look at some of Zenbot’s key features.

Now, let’s study an example:

• Say a cryptocurrency trader configures Zenbot.
• The bot will execute trades based on support and resistance levels. 
• When the price of Bitcoin touches a support level, the bot automatically places a buy order.
• In contrast, when the price reaches a resistance level, it executes a sell order. 
• This ensures that trades happen instantly, without manual intervention.

4. 3Commas

3Commas is a versatile trading platform. It provides access to advanced trading bots designed to automate strategies in both cryptocurrency and stock markets. It’s highly regarded for its user-friendly interface. 

This bot allows traders to:

• Build and manage their trading bots 

or

• Use pre-configured ones based on popular strategies

3Commas is particularly appealing to those who want to automate routine tasks like executing trades across multiple platforms. Let’s check out some key features of 3Commas:

Furthermore, traders must note that “grid trading” is one of the most popular strategies on 3Commas. This strategy entails adding buy and sell orders at intervals above and below the current price. Traders using this strategy earn profits from small price movements in a volatile market.

For example, 

• Say a trader is doing futures trading.
• They configure 3Commas to automatically buy when prices drop and sell when they rise within certain levels (grid). 
• Now, based on the instructions, the bot would place orders at predetermined intervals (or “grids”) around the current price.
• By repeating this process within the grid’s range, the trader takes advantage of frequent and small fluctuations without manually placing orders.

5. Shrimpy

Shrimpy is a cryptocurrency trading platform. It is designed specifically to help traders automate portfolio management. It includes unique features like “rebalancing” and “strategy testing.” Shrimpy is an ideal tool for long-term investors who want to maintain and optimize their crypto portfolios across multiple exchanges. Let’s study some key features of Shrimpy:

It must be noted that one of the primary use cases for Shrimpy is automating portfolio rebalancing. Rebalancing one’s portfolio is important for maintaining the optimal asset allocation. For example, 

• Say a trader’s target is to hold 50% Bitcoin and 50% Ethereum.
• However, due to price changes, Bitcoin’s share increases to 60%.
• Now, Shrimpy will automatically sell some Bitcoin and buy Ethereum to restore the balance.  

How to Detect Market Bots? 

To let traders easily detect market bots, we offer our advanced tool, “Tradermap Pro.” Currently, several traders are using it to detect the presence of market maker bots by using Market by Order (MBO) data. For the unaware, this data provides granular information on individual orders. This allows traders to visualize and understand how market makers and bots influence order flow. 

Also, Tradermap Pro creates heatmaps. These heatmaps highlight areas of significant market-making activity. By analyzing them, traders can easily spot bot-driven patterns that might otherwise be invisible. For more clarity, see the graphic below to learn how it works:

Get a clear view of market maker activity with Tradermap Pro. Start now! Apart from TraderMap Pro, we also offer its simplified version, “Tradermap Lite.” It is ideal for traders who want a more streamlined solution. This tool focuses on identifying market maker bot activity, specifically in futures markets, such as 

• ES (S&P 500 Futures) 

and 

• NQ (Nasdaq 100 Futures).

While it offers fewer features, it is highly effective for traders who need a quick way to detect bots and focus on liquidity pockets. Discover how Tradermap Lite can help filter out market-making bots for a cleaner view of order flow. Test it out today! 

Pros & Cons of Using Algo Bots for Trading 

Firstly, let’s talk about some pros. Algo bots execute trades much faster than human traders. They process large amounts of data and react almost instantly to market changes. These bots are especially beneficial in high-frequency trading, where even milliseconds matter. Some other pros of algo bots are:

• Reduced Emotion 

• • • Trading bots eliminate the emotional component of trading decisions. 
    • Be aware that fear, greed, or hesitation can lead to poor trading or delayed decision-making.
    • Bots rely solely on data and pre-set rules.
    • Thus, they execute better deals and earn more returns. 

• Consistency

• • Bots strictly follow predefined algorithms consistently.
  • They trade in a disciplined manner without deviation from the plan. 
  • This consistency is particularly helpful in following strategies like scalping, arbitrage, or grid trading.

Now, to give you a neutral view, let’s focus on some of its cons.

• Don’t Put Over-Reliance

• Placing complete reliance on bots without manual oversight can be dangerous.

• This risk increases even more during unforeseen market conditions. 

• It must be noted that if the bot encounters an unexpected situation, it may not perform optimally.

• Bots Underperform During Market Volatility

• Bots often struggle in highly volatile markets. 

• Unexpected changes in the mood of the market or catalytic events often lead to losses if the algorithm isn’t designed to adapt quickly to such changes.

Conclusion

Algo bots offer traders speedy and emotion-free decision-making. By automating trading strategies, bots even maintain discipline and consistency in execution. Some top trading bots are 3Commas, Zenbot, Shrimpy, and MetaTrader EAs. However, traders need to be cautious about over-relying on bots, especially in volatile markets where bots may not adapt well to sudden changes.

To optimize the effectiveness of algo bots, traders can integrate them with advanced market analysis tools like our platform Bookmap and our popular add-ons “Tradermap Pro” and “Tradermap Lite.” These tools easily detect market-making bots and provide insights into market liquidity and activity. 

By using Tradermap Pro, traders can filter out large institutional orders and adjust their strategies accordingly. On the other hand, Tradermap Lite helps day traders focus on liquidity pockets by identifying and excluding artificial bot activity.

Are you ready to automate your trading? Try out Tradermap Pro today on our platform to gain a deeper insight into market makers’ activity in futures markets.