How to Set Up a Trading Bot for Dex-Trade: A Guide for Beginners

If you want to run an advanced strategy like using an AI trading bot for Dex-Trade, you will find yourself disappointed rather quickly as this CEX does not have any native automation options. Not a single industry-leading provider of such tools supports the exchange making it quite challenging to optimize profitability and investment activities. Nonetheless, there are several approaches you can use to try and add automation to your strategy even if you trade here.

Advantages of algorithmic trading on Dex-Trade

Cryptocurrencies are inherently volatile, speculative assets that do not have strong fundamentals. The best way to analyze them is through the prism of technical analysis. Seeking certain patterns and identifying traders' repeating behaviors can be very rewarding and provide you with incredibly valuable insights. It happens so that using various algorithms aligns perfectly with this style of analysis.

Running a capable automated trading system (ATS) that simply follows an algorithm is a great way to increase the efficiency of all investment activities and improve the outcomes in the long run. For instance, setting up a Dex-Trade arbitrage trading bot is a great idea for many people with sufficiently large investable capital since arbitrage opportunities are easily spotted by a strategy that relies on quantification of metrics and real-time data collection.

This particular exchange is a great destination for many retail investors due to several reasons:

●        A solid spot market. The daily trading volume here reaches $300 million consistently. You can access 105 coins forming 195 different pairs allowing for all sorts of triangular arbitrage strategies to work well here. You can also try launching a spot trading bot for Dex-Trade to increase the speed and reliability of all operations.

●        Passive earning opportunities. One of the greatest advantages of this platform is the variety of earning mechanisms that allow investors to allocate funds to a variety of promising projects and decentralized protocols. As of the time of writing, there were 7 distinctly different investment options with APYs ranging from 2% to 80%.

●        Access to many IEOs. If you are not interested in running consistent strategies like a DCA trading bot for Dex-Trade, it is a good idea to take a look at riskier propositions. IEOs allow retail investors to be among early investors and purchase certain tokens at a discount to earn even more. While the vast majority of IEOs are memecoins and other weird digital assets, you can occasionally find a gem.

●        The Bonus Center is a special promotional program that rewards participation in various activities offered by the platform. Here, the most proactive retail traders can receive DXU tokens or even small gifts like a $2 deposit bonus. Professionals are rewarded with SOSF, EZC, and USDT tokens. Achieving high trading volumes required to get rewards is more than possible with an automated trading bot for Dex-Trade.

Other minor advantages include a functional API port, regular tournaments, confirmed reserves, and solid security features. The exchange is a solid choice for many aspiring newcomers and seasoned veterans interested in working with a global exchange that has many options for passive earning. Automating your operations here would be a great way to optimize potential profitability and earn rewards quickly by clearing milestones in a matter of weeks.

How to use a Dex-Trade trading bot

As mentioned previously, not a single serious automation provider supports the CEX. Cryptorobotics had this platform among supported exchanges a couple of years ago but it has since removed the support for unknown reasons. It is hard to find a provider that works with the exchange.

Here are several options you can try:

1. Talk to customer support representatives from your automation provider and inquire whether they can add this CEX to the list of supported platforms. While industry leaders like WunderTrading and Cryptohopper are unlikely to reciprocate such requests, smaller vendors may be interested in providing a connection for some of their most loyal customers.
2. Create a piece of software or hire a developer to build a robot that can connect to the exchange via the API port. GitHub has a lot of interesting automated strategies that can be easily adjusted even by people without advanced coding skills. You can also find freelancers specializing in building unique automation solutions for retail investors and institutions.
3. Use tools like HummingBot to automate trades on any exchange. HummingBot is an open-source software project that has hundreds of contributors. It is backed by several centralized exchanges including Binance, Kraken, and Coinbase. Note that it is not a commercial product and can be used freely by anyone. Learning how to operate them takes some time but it is free and can work with most CEXes and DEXes.

The first option may be feasible only in some niche scenarios where you either work with a relatively small provider willing to put in the work for just a couple of customers or you find a vendor that supports this particular CEX directly. Setting up a Dex-Trade API trading bot is a more realistic solution that can be used by technically savvy traders with some coding skills or people who can invest in the development of a highly specialized small application for specific strategies.

The last option is to use HummingBot, an open-source application that is freely available on GitHub. While it does not offer the same quality of services as industry-leading platforms, such as WunderTrading, you can still use it effectively to launch some of the most reliable strategies like market-making, arbitrage, and others.

However, you will have to forget about using some staples like a grid trading bot or advanced statistical arbitrage systems. In theory, you can create something similar using the tooling provided by the HummingBot app but it will take some serious tinkering with the source code and a whole lot of trial and error.

The best crypto trading bot for Dex-Trade

Simply because the range of options is limited to a couple of platforms, HummingBot can be considered the most optimal choice. The setup can be quite painful for newcomers who do not know much about running apps locally using GitHub repositories. We will provide you with a surface-level step-by-step guide that explains how to download, install, and launch the app.

Here are the requirements:

1. You need a Linux or Windows machine.
2. Download and install the GitHub Docker.

The application does not work on mobile devices and requires some technical prowess from a user to be used successfully. However, like in the case of any other technology, it takes practice to become proficient in using it. If you have everything to run the app, you can use HummingBot to create efficient Dex-Trade bot trading strategies.

Below is a step-by-step guide on how to get started:

1. Download the Gateway from github.com/hummingbot/gateway.
2. Open the Docker and use the “git clone” command to get the …/hummingbot/deploy.git.
3. Run “cd deploy” and “bash setup.sh” in the command line.
4. Clone the HummingBot repo with “git clone github.com/hummingbot/hummingbot.git”.
5. Attach the bot by using the “docker attach hummingbot” command.
6. Open the client and create a new password when the system prompts it.
7. Run “connect dex-trade” and see if there is a CLOB connector available for the exchange.
8. Make sure that the connection is stable in the testing connection tab.
9. Download a strategy you would like to run from GitHub and clone it to the corresponding folder.
10. Set up a strategy by importing it from the folder. Use “import conf_[strategy name]”.
11. Run Start and the strategy will start running according to its algorithm.

Note that this option is certainly not the best approach for beginners to create a Dex-Trade bot. As of the time of writing, the exchange is not directly supported and requires individual development efforts from users to build a CLOB connector or vote in Connector Polls. You can also go to hummingbot.org/governance/proposals to manually add a new entry.

Now you know how to set up a trading bot for Dex-Trade using the HummingBot client. However, it is crucial to learn more about the app and how it works by reading the documentation, adjusting configurations, and getting some first-hand experience. It can be a rewarding learning process but you must be ready to face some difficulties as the onboarding is challenging even for retail traders with experience.

Good alternatives for proactive retail investors

Over 65% of all individual traders and over 99% of institutions use automation to at least some degree in their investment activities. It is hugely important to know how to use the most popular ATS designs like a grid trading bot for Dex-Trade or a DCA buying strategy.

Below are some of the best providers in the sector that offer these useful instruments:

●        GunBot is a great solution for users interested in working across the DeFi and CeFi ecosystems as it is capable of connecting to decentralized and centralized exchanges without any issues. One of the recent additions to the lineup is the AI assistant which operates like a typical LLM with some generative capabilities. You can use this AI-powered system to create new strategies from scratch, ask for educational materials, and talk about different robots in detail.

●        3Commas is a good choice for investors interested in social trading. Many newcomers to the industry do not have the necessary experience and confidence to start trading personally. Following seasoned veterans and vetted experts is a much better idea for beginners. 3Commas specializes in social components by maintaining a healthy marketplace with user-generated content (strategies, add-ons, etc.) and a copy trading section with hundreds of lead traders from all supported platforms.

●        TradeSanta claims to have over a thousand different templates that can be launched in a couple of clicks. It is a nice pick for newbies seeking guidance and interested in launching their robots quickly and conveniently. The variety of strategies is more than impressive. You can also create custom ATS designs and follow signals from dedicated suppliers. Note that many templates require additional adjusting and tinkering to not lose you money.

●        WunderTrading is one of the best providers of automation solutions. In many senses, this platform is a jack of all trades with its strong focus on custom robots, reliable ready-made strategies, and regular updates. One of the most recent additions to the product roster is the AI-assisted arbitrage system that can perform quite well in all sorts of market conditions. If you are interested in copy trading, the marketplace has many vetted professionals from all 14 integrated CEXes. You can also launch a DCA or grid crypto trading bot without any hassles.

Third-party providers that dedicate all their resources and expertise to building highly specialized automation solutions usually deliver the best user experience and consistent returns. However, industry-leading companies do not support this exchange so building a Dex-Trade trading bot using the finest tools out there is close to impossible.

The main takeaway

This exchange is certainly an interesting choice for investors interested in passive earning opportunities but proactive traders who want to make money here and now will be disappointed with the lack of automation features and other complimentary products.