How to Set Up Trading Bot on Bitvavo?

Contemporary investors are used to having access to flexible trading tools. However, if you are interested in running a Bitvavo trading bot or even connecting a third-party service, you are out of luck. The vast majority of providers do not support this CEX directly. For example, you cannot launch a WunderTrading robot directly without some back-and-forth with the support team. The lack of integration is an apparent weakness of this exchange.

How to set up a trading bot on Bitvavo

Since the platform has a functional API gateway that provides access to the spot market, account, and market data, you can create an ATS using various tools available to contemporary retail traders. We will discuss several options:

1. The native smart platform is called Pro Mode. It has some basic automation baked into the interface. While you cannot schedule trades, delayed orders (stop loss and take profit) can be adjusted and automatically close positions that reach specific loss thresholds. Unfortunately, you won’t be able to use staples like copying others or running a grid system.
2. Desktop applications. GunBot and HummingBot have clients that can be connected to any centralized exchange that has a functional API. It takes some time and effort to set up everything correctly, but you will be rewarded with access to a rich selection of strategies. For example, HummingBot allows you to run a grid or DCA strategy after customizing it according to your needs.

These two options are quite limiting and do not allow experienced investors to express their creativity when building portfolios. Nevertheless, it can be enough for retail traders who do not want to concentrate on active participation in the market. If you are among conservative investors looking for a relaxed experience, there are also additional solutions offered by this CEX:

• All users of the platform can earn rewards by staking different types of digital assets. You can access DeFi tokens from multiple chains including Solana, Near Protocol, LTO Network, Ethereum, and more. For instance, staking SOL yields 5% APR while investing in Axie Infinity is rewarded with a respectable APR of 15%. You can collect payouts weekly.
• Accessing early listings is another way of making money on the exchange that regularly expands its catalog of accessible financial instruments. Being early to the party is a great way to secure an exit that produces profits. You must carefully follow the news cycle and be ready to buy a freshly listed coin to be among the first movers.

These are good options if you are not interested in trying to find the best trading bots for Bitvavo. Only the most effective ATS designs produce results consistently. They can become a valuable source of passive income but you must use the best tools available in the market. If you cannot access systems like grid trading bot for Bitvavo or triangular arbitrage, focusing on things like staking, holding coins, or trying to game the system by becoming an early buyer is a much better option.

Bitvavo crypto bot setup

Launching a bot on this particular exchange can be a difficult task for those who do not have any prior experience with GitHub, coding, and using various applications. Without this expertise, it may take quite some time to set up everything correctly and achieve consistent results. We will talk about using HummingBot. It is a hugely popular open-source instrument that has strong backing from Binance, Kraken, and some other large CEXes.

Below is a short, surface-level instruction on how to launch a Bitvavo API trading bot using HummingBot:

1. Go to the HummingBot.org, the official website of the project.
2. Click “Install HummingBot” on the front page.
3. Pick the right configuration for the client by installing it from the source.
4. Open the installed app. Create a new password.
5. Acquire API keys from the exchange on the account page.
6. Use the “connect [exchange_name]” command in HummingBot.
7. Use the API key to establish a connection. If the system asks for additional credentials, provide them.
8. Go to the Dashboard and launch one of the strategies.

Note that onboarding is quite difficult with the app having an old-school interface and multiple controllers that are responsible for various features of any given strategy. You will need to spend a lot of time learning how to navigate this application efficiently before you can launch your first Bitvavo bot for beginners. Advanced stuff is quite complicated and should be attempted only after watching some tutorials.

Great Bitvavo bot trading strategies

HummingBot and many other similar apps offer users a wide selection of ready-made strategies that can be easily deployed on any CEX. We want to discuss some interesting solutions that can be used to increase efficiency, achieve consistency, or improve profits.

• Pure Market Making (PMM) is the base V1 strategy from HummingBot. This is a simple algorithmic system that can be triggered by the market data available on the CEX. You can adjust the settings to create a reasonable trading logic. Users define actionable spreads, position sizes, and other parameters.
• Spot Perpetual Arbitrage is a great tool for retail traders who want to use safe systems that produce results reliably. Opportunities for this strategy appear rarely but they are the closest to guaranteed profit among many other systems. Users can choose minimum divergence and convergence to instruct the bot to act only under ideal circumstances. It is an excellent Bitvavo arbitrage trading bot.
• Custom ATS designs can be created using the Strategies V2 functionality. There are three interconnected modules: data collector, data processor, and oder executor. You can adjust their parameters and logic to create any strategy and use it quite effectively.

Note that none of these ATS setups are simple, ready-made solutions that you can deploy in one click. You must spend time and effort to create something that works as intended and reliably produces profits. If you have experience in coding, technical analysis, and portfolio management, it is possible to build an advanced trading bot for Bitvavo even without accessing the tools offered by the best providers in the sector.

Users who lack the expertise and various skills required to use HummingBot should stick to using services that have customizable ready-made robots that you can launch in a couple of clicks.

Using an AI trading bot for Bitvavo

Artificial intelligence can be successfully applied to the world of finance. Some of the products currently available to retail traders prove that it is possible to effectively utilize machine learning and neural networks to build systems that consistently outperform humans. Below are some examples of products with AI components that you can try today:

• CryptoHopper integrated machine learning into their grid bots to improve investment outcomes. These robots react to the changing price action and adjust positions accordingly. This dynamic setup works well in volatile markets and produces slightly better outcomes on average. However, the data about the performance of this particular strategy is still insufficient making it hard to determine whether to focus on it heavily.
• GunBot uses AI in a distinctively different way compared to its competitors. The LLM based on ChatGPT can process user requests and turn them into a functional strategy that can be deployed on any exchange. The issue here is that this LLM suffers from the same issues as ChatGpt, namely, hallucinations, poor data, and emergent, unexpected behavior. On the other hand, if you want to build a unique Bitvavo bot for futures trading, this particular product may be very interesting to you.
• WunderTrading has a powerful AI crypto bot that can manage massive portfolios with hundreds of market positions. Since it was developed with a user-first mentality, this product has a simple UI and allows you to get started in just a couple of clicks. Statistical arbitrage is a complex system that usually requires many trained traders to work in harmony to achieve good results. However, contemporary SaaS platforms can easily replicate the setup without any human supervision or direct involvement of users.

These AI-enhanced instruments are still raw and require polishing. However, retail traders should use them to get a better understanding of the technology and how it can change the investment game in the near future. We recommend dedicating a small portion of your portfolio to instruments that rely on machine learning and AI.

Which is the safest Bitvavo automated trading bot?

If you are wondering which method to employ for the best outcome and the lowest risk, the answer is quite simple — DCA. Distributed cost average is a century-old method of reducing the price of asset acquisition by splitting a purchase into a series of long positions. DCA is used by the vast majority of Bitcoin holders who want to accrue a large quantity of coins as cheaply as possible.

While a DCA trading bot for Bitvavo can be sued for the same purpose, there are other ways to utilize a DCA system. For instance, you can extract good profits by simply using robots that enter the market at multiple points to reduce the average price and set the exit point at a price that guarantees profit. A good DCA trading setup can deliver results consistently without exposing your portfolio to excess risks.

Below are other safe strategies that deserve a mention:

1. Triangular arbitrage is a system that can be triggered only when the “stars align perfectly”. It is a robot that tracks three different pairs and waits until a price discrepancy occurs to make a three-way trade that results in a guaranteed profit.
2. Grid robots are some of the most consistent performers in the industry. They are hugely popular for a reason. Every single vendor that offers automation tools has some version of this particular system and offers it to its clients.
3. Market-making strategies rely on providing liquidity and searching for spreads between bid and ask prices. If you have a sufficiently large capital and have the necessary resources to automate the operation, it can be an incredibly safe and consistent strategy.

The main takeaway

Bitvavo is the most popular European exchange by a large margin. However, it is not integrated with many third-party service providers and does not have a strong technological foundation to provide a great service to its users. If you are interested in automation and want to experiment with contemporary robots, switching to another exchange can be a good idea.