AI Bots for Trading on Coincheck: A Step-by-Step Guide

WunderTrading

MAKE YOUR CRYPTO WORK

The Japanese market has been one of the most proactive cryptocurrency-focused territories for a long time with vending machines offering BTC appearing in the early 2010s and the rate of adoption outpacing other nations by a large margin. Today, it is a large global exchange under the management of Monex Group. As a respectable establishment, it does not dilute its spot offerings with memecoins and questionable digital assets and focuses primarily on time-tested currencies.

It is possible to run advanced Coincheck trading bots using various tools available to contemporary retail traders. However, some of the novel instruments won’t be usable. For example, you cannot launch an AI crypto bot on this CEX because it is not supported by many modern automation providers operating in the industry.

Automated trading on Coincheck

The exchange offers some basic functionality to partially automate investment activities but these features are limited and do not offer the necessary freedom of expression. In some cases, such functionality could be enough to create a balanced portfolio but the lack of diversity in the spot market can be an issue if you do not have different ways to work with the limited number of digital assets.

Since the exchange has a functional API gateway allowing for both public and private access to its infrastructure, it is possible to launch some of the best crypto trading bots for Coincheck using tools like GunBot or HummingBot. We will discuss these particular options in detail below. However, it is important to know the extent to which the CEX allows users to employ popular automated setups before we dive into available toolkits and their capabilities.

How do Coincheck trading bots work?

There are two main ways to automate investment activities on the platform:

  1. You can use the the periodic automatic purchasing option allowing you to create a DCA robot that makes small purchases from time to time. It is a useful strategy if you are interested in building up a portfolio concentrated on certain assets. Bitcoin and Ethereum have a strong potential to appreciate in the long term, making this particular approach quite effective at accumulating wealth.
  2. Use the private API gateway to connect a bot directly to the spot market. The private API allows users to order, cancel orders, and manage the balance. This means that you can create a powerful strategy that does not require human supervision since stop-loss and take-profit orders can be created using this limited functionality.

The good thing here is that CEX customers can easily launch a standard DCA trading system without going to third-party providers. The bad thing is that you cannot do anything else. It is a confined instrument that only allows users to make a schedule for purchases. You cannot even create the same schedule for selling.

Since the crypto trading bot performance in 2024 is largely defined by the flexibility of the system and the quality of the digital infrastructure that robots work on, not having versatile tools to build ATS setups is a huge downside.

How to set up a Coincheck trading bot

The only real option left to investors interested in using automation to increase the efficiency of trading is to employ various desktop apps that can be connected to the exchange. While some surface-level solutions can be found among GitHub repositories, you will be better off using time-tested platforms that provide a good user experience and have many ready-made strategies that you can launch right away.

The two best options available to retail traders who want to use a Concheck algorithmic trading bot are these:

  1. GunBot is a great choice for forward-thinking investors who believe in the potential of the DeFi sector to take over the financial world. The project is focused on bridging the gap between decentralized and centralized finance by creating a unified toolkit that can be applied to both DEXes and CEXes. You can download the client and connect it to a wide range of different platforms manually. It takes some tinkering, but using the app is not a big challenge.
  2. While HummingBot is certainly not among the crypto trading bots for beginners on Coincheck, it is still one of the most useful instruments in the arsenal of a contemporary investor. HummingBot is an open-source project backed financially by different CEXes including Binance, Coinbase, and many others. The interface is non-existent. Everything is done in a console. You need to learn the basic functionality and the library of commands to use it effectively. It all takes time and effort but the results are often worth it.

Since GunBot provides a straightforward experience to its users making it easy to establish a strong connection with the CEX, we won’t be covering this particular option. Instead, we will focus on HummingBot as one of the best free tools that support this CEX.

How to create a Coincheck trading bot step-by-step

The process of setting up HummingBot is quite simple yet many people complain about difficult onboarding and poor user interface. Unfortunately, these complaints are justified by the app only offering a simple console that does not please the eye.

Below are the steps you need to make to start using one of the best crypto trading automation tools for Coincheck:

  1. Go to the official website of HummingBot and click “Install HummingBot”.
  2. Click the fitting installation package (via Docker, from Linux, MacOS, or Windows).
  3. Launch the installed application and type “conda activate hummingbot”.
  4. After the process is finished, type “./compile” and follow it with “./start”.
  5. Create a local password that is used to access the application on your device.
  6. Run “connect [exchange_name” to automatically connect to one of the exchanges supported by the app.

In some cases, you will need to use a connector. It is a code package that can be used to teach the app how to connect to a certain API. HummingBot supports CLOB Spot, CLOB Perp, and AMM standards.

With this setup, you can create all sorts of strategies. For example, it is possible to build a custom grid trading system that will use the limited functionality of the API to enter the market and exit when the conditions are good. While it is a clunky mechanism that can fail at any moment, it is the only reliable way of automating trades on this particular exchange.

AI cryptocurrency trading on Coincheck

One of the biggest trends in the automation industry is the implementation of new capabilities into existing designs. While some of the experiments do not pay off as expected, there are several interesting products that demand your attention. Unfortunately, you cannot use them on this particular exchange. However, it is possible to use AI-driven market signals on Coincheck with some bots and manually. It sounds like a hassle, and it is, but missing out on the benefits of AI in the fintech industry is a bad move.

Let’s take a look at what the industry can offer:

  • CryptoHopper has been around since 2017. It is a continuously improving platform that rolled out multiple market-defining products throughout its existence. Lately, the attention of the company has been focused on various ways to implement artificial intelligence in their current product lineup. As a result of lengthy R&D efforts, the company presented its new grid robot that can be enhanced with an autonomous agent. It can react to various price action changes to adjust positions and aim at optimal profitability. The company claims that using ML has improved outcomes by a slight yet noticeable margin.
  • GunBot allows you to create unique ATS designs using your creativity if you don’t know how to code. The proprietary LLM based on ChatGPT understands natural language and can build systems based on user descriptions of them. In some cases, it produces gibberish or unusable code. However, the vast majority of outputs are quite good and can be used to inform the creation of sophisticated trading systems and complex strategies. You can use this tool to form the foundation of an effective strategy.
  • AI Signals is one of the newer companies that managed to catch the rising wave of AI and has been riding it since the very beginning of the craze in 2023. The company offers a wide range of products based on machine learning. While using AI bots for cryptocurrency on Coincheck is impossible due to technological limitations, you can manually open and close orders based on signals received from a platform that uses artificial intelligence to identify good entry points. The problem with this service and many similar ones is that the inner workings of their predictive models are never made public. We have to trust that their signals are produced by effectively trained models and verified by industry experts.
  • WunderTrading is a good place to go if you are interested in the best implementations of autonomy in an ATS. While this platform does not support the CEX directly, you can still run the AI-enhanced statistical arbitrage system on the paper trading account and repeat adjustments on the main spot account on the exchange. This setup is labor-intensive and requires some serious dedication from an investor but can be quite effective. WunderTrading has a plethora of other useful tools that can be used to achieve consistent returns and build advanced strategies. The platform has a diverse social marketplace with hundreds of lead managers from all supported CEXes. You can also take full advantage of the informative portfolio tracker and make investments efficiently.

These intelligent tools are great for people who believe in the future of technology and want to be among early adopters. We strongly believe that all retail traders must test at least some of the novel tools to prepare for the inevitable proliferation of them in the near future. Understanding these instruments now means that you will feel more confident tomorrow.

The main takeaway

Despite the fact that you cannot create a machine-learning crypto bot for Coincheck or use some of the best ATS designs available to modern investors, this exchange is still a reliable establishment that always puts its users first. For example, after the infamous hack incident in 2018 when the company lost over $530 million, the CEX reimbursed all clients using their own funds. It is a trustworthy corporation that does care about its users.

On the other hand, a retail trader who wants to use an advanced trading bot on this exchange will have very limited options. Switching to a CEX supported by one of the leaders in the automation industry can be a good idea. For instance, Binance, Kraken, Coinbase, and many other exchanges are supported by multiple third-party vendors offering all sorts of highly efficient automation instruments.

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