Automated cryptocurrency trading bot
This script was inspired by the observation that all cryptocurrencies pretty much behave in the same way. When one spikes, they all spike, and when one takes a dive, they all do. Pretty much. Moreover, all coins follow Bitcoin's lead; the difference is their phase offset.
So, if coins are basically oscillating with respect to each other, it seems smart to trade the rising coin for the falling coin, and then trade back when the ratio is reversed.
The way the bot takes advantage of this behaviour is to always downgrade from the "strong" coin to the "weak" coin, under the assumption that at some point the tables will turn. It will then return to the original coin, ultimately holding more of it than it did originally. This is done while taking into consideration the trading fees.
The trading is done in the Binance market platform, which of course does not have markets for every altcoin pair. The workaround for this is to use Tether (USDT), which is stable by design, as a bridge currency.
Coin A -> USDT -> Coin B
The bot jumps between a configured set of coins on condition that it does not return to a coin unless it is profitable in respect to the amount held last. This means that we will never end up having less of a certain coin. The risk is that one of the coins may freefall relative to the others all of a sudden, attracting our reverse greedy algorithm.
- Create a Binance account.
- Enable Two-factor Authentication.
- Create a new API key.
- Get a cryptocurrency. if its symbol is not in the default list, add it.
- Run the script once, and enter your API key, secret key and cryptocurrency symbol when prompted (a list of supported symbols is available in the script).
pip install python-binance
