Best Crypto Exchanges for Automated Trading

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Coinrule

6 min readMar 4, 2022

The cryptocurrency market is the most volatile and fast-changing financial market. This volatility provides many opportunities for profiting from trading, but it also creates a lot of risks. To minimise risks and obtain the maximum profit from these opportunities, more and more traders are attracted to automated trading. Using the best crypto exchanges is essential in assisting them to achieve their trading goals.

Today, there are many crypto exchanges, but not all of them are good for automated trading. To find the best crypto exchange for automated trading, you need to know what requirements are important. In this article, we will show you these requirements, and then give you a list of exchanges we recommend.

What Is Automated Trading?

Automated trading is known as algorithmic trading, or system trading where orders are placed by a computer program or system rather than an individual trader. It executes trades based on predefined parameters. These parameters depend on the trader’s strategy and can be based on technical analysis and fundamental analysis.

One of the main advantages of automated trading is that it eliminates human emotions and biases, which are often responsible for costly errors. It also allows traders to leverage their skills and experience to generate profits without needing to be always present — allowing the perfect passive income lifestyle.

How Will You Choose The Best Crypto Exchange?

Picking the right exchange is an extremely important step in your automated trading journey. You need to find an exchange that fulfils the following requirements:

Liquidity

High trading volume and depth in the order book will help you ensure that there is sufficient liquidity on an exchange. This means that it should be easy for you to execute your automated trading strategy without having to worry too much about the price fluctuating wildly in response to the lack of buyers and sellers.

Trading Pairs

The number of tradable pairs will depend on the exchange. Some exchanges offer only a few trading pairs, whereas others will offer a much wider range of trading pairs. Make sure the exchange offers your desired pair(s) for automated trading.

Low Fees

You should review all types of fees you may incur when operating on an exchange, such as trading fees, deposit fees, withdrawal fees, and more. Make sure that the fees charged by the exchange are low and affordable. If the fees are high, you will end up spending a lot of money on charges which will decrease your overall profitability. Hence, it is essential to check out their charges before you register yourself with them. It is also wise to calculate the potential profitability of each trade and see how this compares to the trading fees. This can have a large impact when your strategy is only profiting a small amount on every trade with fees eating into this small profit.

Security Of the Exchange

Cryptocurrency exchanges have a history of being hacked with security vulnerabilities taken advantage of to steal money from users’ wallets. Therefore, it is important to ensure that they have adequate security measures in place and insurance policies to compensate users in case of such unfortunate events.

Features

Some exchanges have very sophisticated trading platforms with a wide range of charts, indicators, order types, and other advanced features available. Others lack certain tools or have a more limited selection of them available in their system. Therefore, choose an exchange that has the technology and tools you need for your automated trading along with the types of markets you want to trade — Futures or Spot.

3 Best Crypto Exchanges You Should Use for Automated Trading

Below, we have listed 3 top cryptocurrency exchanges that you should use for automated trading whether you are a beginner or a pro:

Binance

Binance is the largest crypto exchange on the market by trade volume. It was launched in July 2017 and currently supports over 350 coins and 1400 trading pairs. It has a high trade volume of around $20 billion per day, meaning you can get low spreads for your trades with large amounts of liquidity — resulting in more reliable and consistent market conditions.

It also offers plenty of features that truly make trading easy and effective, supporting Futures, Spot and Margin Trading. When it comes to fees, Binance charges a 0.1% fee on every trade you make, which is low compared to other exchanges. Binance also allows you to get a 25% discount on trading fees by holding their Binance Coin (BNB) in your wallet with fees deducted from this balance. You can see the associated fees of spot trading below:

If you are looking for a secure, easy-to-use, cost-effective, and user-friendly way to invest in cryptocurrency, Binance would be one of the top choices.

Bitmex

Bitmex is one of the most advanced derivative crypto exchanges that provide futures contracts, allowing traders to trade 100x more than their capital with Bitcoin as collateral. It also offers perpetual swaps, which are similar to futures contracts but don’t expire. Apart from Bitcoin, it also supports Ether and other cryptocurrencies for margin trading.

Bitmex charges fees based on the Maker/Taker model. The fees range from 0.01% (Maker) to 0.05% (Taker). It also offers a discount to high-volume traders. Below is the chart showing the amount of discount you’ll receive on your taker fees based on your rolling 30-day Average Daily Volume (USD).

If you want professional-grade crypto trading experience and want to take advantage of high leverage trading, then Bitmex would be a great option for you.

Kraken

Kraken has been around since 2011 and is currently one of the largest US-based exchanges. It originally started with the offering of bitcoin, litecoin, and euro trading, but since then it has expanded its cryptocurrency offerings and even introduced various services like futures and spot trading. It now also supports more than 120 different coins and 465 trading pairs on its platform.

It is a secure well-established platform and follows best practices to protect user accounts — including bug bounties with rewards of up to $6,400. For the most part, all trading fees on Kraken are competitive. It charges fees from 1.5% to 0.9% for placing market orders. The chart below showcases the details of Kraken Pro fees, based on users’ 30-day trade volume.

Kraken is one of the best crypto exchanges for automated trading, specifically for those who live in the US. They have many options that make trading easy, convenient, and secure.

Conclusion

We believe that any of the three options listed above will be a solid choice for individuals looking to get into automated trading. Depending on individual needs, trading size, and experience with the tools and features offered at each exchange, one may be more suited than the others.

What is Coinrule

Coinrule allows you to create trading rules that run automatically across your favourite exchanges.

With Coinrule you can easily develop your own trading rules and strategies and set them up to run automatically. It is the “if-this-then-that” for cryptocurrency trading that allows you to plan your crypto trading rather than having to sit for hours in front of charts. Best of all? No coding skills are required, meaning anyone can use Coinrule.

DISCLAIMER

I am not an analyst or investment advisor. Everything that I provide here site is purely for guidance, informational and educational purposes. All information contained in my post should be independently verified and confirmed. I can’t be found accountable for any loss or damage whatsoever caused in reliance upon such information. Please be aware of the risks involved with trading cryptocurrencies.