Crypto Trading Bots: How They Work, What They Cost and When They Pay Off

A crypto trading bot promises exactly what an investor with a day job cannot deliver: trading around the clock, to fixed rules, without a night shift and without gut feeling. The software does not tire, it does not hesitate and it does not change its mind when the price turns uncomfortable. That is where its appeal lies. It is also where the problem lies, the one missing from the providers' marketing copy. Every single rule the bot executes costs a trading fee. In Germany, every execution additionally creates a separate taxable event that you must be able to evidence individually at year end. And where a provider actually takes the investment decision off your hands, it becomes a service for which the financial regulator requires a licence. This piece works through the cost side, sets out the German tax position and shows which regulatory questions you should settle before your first deposit. If you also want to know which providers matter at all in the German market, the current market overview is in our comparison of crypto trading bots. What a Crypto Trading Bot Technically Is: Rule Set, API Key and Order Routing A trading bot is a program that places orders through a programmin...