How much money I need to start bot trading? Complete Guide

December, 14th 2023

How much money I need to start bot trading? This is a raising question today. Trading is a fast-growing industry that has recently become increasingly popular among investors. This advanced rage has led to a surge in the development of trading bots. These bots help investors become more prosperous by automating their trading. A minimum amount can be traded on each exchange, which varies by cryptocurrency exchange and pair, but usually, the equivalent of $11 is sufficient for any team. To calculate the funds required for a particular trading bot, you can use the following formula: primary order amount + direct order amount x additional order amount + exchange commission. Alternatively, you can use the calculation tool when editing or creating a new bot. Let's go through this article to seek the answer to the question: How much money I need to start bot trading?

Break Down: How much money do you need to start bot trading?

Starting bot trading involves several steps, each with its associated costs. Keep in mind that the figures provided are general estimates, and actual costs may vary based on factors like your specific strategy, market choices, and technology preferences.

Education and Research (Estimated Cost: $0 - $1,000):

Before diving into bot trading, educating yourself about financial markets, trading strategies, and algorithmic trading concepts is crucial. This can be done through online courses, books, or attending workshops. Costs for educational materials may vary, with many free resources available.

Trading Capital (Varies):

The amount of money you invest in your trading account is critical. The capital required depends on your risk tolerance, trading strategy, and the markets you intend to trade. Starting with an amount you can afford to lose is generally recommended, with $5,000 to $10,000 being a common starting range.

Brokerage Account (Varies):

Opening a brokerage account is necessary to execute your trades. Different brokers have varying minimum deposit requirements. Some may allow you to start with as little as $100, while others may require a larger initial deposit. Consider transaction fees, spreads, and other costs associated with the chosen broker.

Software and Tools (Estimated Cost: $0 - $5,000+):

Depending on your approach, you may develop your own trading bot or use existing software. If you develop your bot, costs may include programming tools, data feeds, and potentially hiring a developer. Commercial algorithmic trading platforms or subscription-based services may have licensing fees ranging from a few hundred to several thousand dollars monthly.

Backtesting (Estimated Cost: $0 - $1,000):

Before deploying your bot in live markets, thorough backtesting is essential to evaluate its historical performance. It may involve purchasing historical market data and using backtesting software. Some platforms provide free access to historical data, while others may charge fees.

Live Testing and Optimization (Varies):

Once your bot is developed, live testing in a simulated environment helps identify potential issues and refine your strategy. Some platforms offer free demo accounts, while others may charge for access to real-time market data.

Risk Management (Cost: $0 - $500):

Implementing effective risk management is crucial to protect your capital. This may involve using tools or software to set stop-loss orders, position-sizing algorithms, or other risk mitigation strategies.

Maintenance and Upgrades (Varies):

Ongoing maintenance and potential upgrades to your trading bot may incur additional costs. This could include fixing bugs, adapting to changes in market conditions, or incorporating new features.

Trading Bot Development costs

As you are seeking how much money I need to start bot trading, I am happy to share about trading robots' development costs, which are necessary for you. Most developers base the price of a cryptocurrency trading bot on the amount of work involved in its creation. Developing a cryptocurrency trading bot requires a computer programmer with sufficient experience. According to some fee plans, a skilled programmer will charge $15,000 to $30,000 for their time on such a large project. The equation is simple. The higher the level of programming skill, the higher the price. In addition, the more complex the bot, the more features the programmer has to implement, and therefore the higher the development cost. Later, when you are more confident in your trading abilities, upgrade to a more expensive one with more features. Doing so can maximize your profits while minimizing the risks associated with trading.

Trading Bot Renting Costs

When it comes to rentals, the cost of a cryptocurrency trading bot depends on the features it offers. Most trading bots are expensive. They offer many advanced features like portfolio management, market tracking, and order execution. These features allow traders to maximize the benefits of using a bot. The cost of a virtual currency trading bot can vary from $20 to $40 per month per segment. However, renting bot functionality will likely require traders to pay $6-$12 per month per bot feature. This fee depends on the developer's experience level and the number of bot features. It is the cost of some of the best and most popular bots. These include Cryptohopper, Trality, and 3Commas. Fortunately, there are plenty of ways to rent one of these kits at a low cost without investing all your savings upfront!

How is the minimum Deposit Calculated?

Bots place orders in proportion to all levels. The higher the grid volume, the more demands the bot will place. Each exchange has its order limits, such as minimum order size and increments. The minimum order size limits the amount of money available per order. For example, a pair traded against a legal tender pair such as XXX/USD may be 5 USD or 10 USD per order. Therefore, placing an order for less than 4 USD is impossible.

The minimum order increment determines how much you can increase your ranking. For example, if the minimum order increment is 1.00 USD, the order size cannot be increased by 0.10 USD. Thus, if the minimum order size is 10.00 USD and the minimum order increment is 1.00 USD, the order can be placed for 10.00 USD.

Free Trading Bots and their Risks

Additionally, some trading bots are entirely free. These are open-source bots that anyone can readily adjust. Since there are many open-source trading bots, choosing the best trading bot takes time and effort. However, some notable examples include Gekko, Zenbot, and Enigma Catalyst. Unfortunately, even the best free crypto bots pale compared to paid bots due to their relative lack of functionality and poor UX design. Still, they are helpful and can be a suitable alternative to free, limited versions of paid bots. However, specific free virtual currency trading bots are not trading bots. It sounds like a riddle, but the explanation is simple.

As the Number of Grids increases, the Investment Required Increases

To run a bot with a 180 grid, you must open 180 orders, which requires more deposits. For example, at Binance, the minimum order size for the XXX/USDT currency pair is 10 USD per order. Multiplying this by 2, the minimum investment in the 180 grid would be 3,600 USD, a much smaller investment to launch a bot, with lower limits for pairs such as XXX/BTC and XXX/ETH or for couples where the quoted currency is a cryptocurrency.

Conclusion: How much money I need to start bot trading?

We have explored each aspect of your question: How much money do I need to start bot trading? Now, you have a straight path. If you want to execute bot trades on the 180 grid, you must open 180 orders, requiring more deposits. For example, if Binance has a minimum order size of 10 USD per order for the XXX/USDT currency pair, multiplying this by 2, the minimum investment for the 180 grids would be 3,600 USD. As the number of grids increases, the investment required also increases.