Binance Trading Bot

About Binance Exchange

 

Binance is one of the leading Cryptocurrency exchanges out there. There is an ongoing competition between Binane and Coinbase to take supremacy in the cryptocurrency world. Binance has proven that it is taking its role as a market leader and numbers prove that. With about 2.0 billion of daily volume (reported in March 2020), Binance is able to process 1,400,000 transactions per second. Binance also enjoys 15.80 million of users traffic monthly, which takes a noticeable portion of Cryptocurrency traders for its own. 

The pace of growth at Binance is legendary. It has been one of the fastest-growing companies – in any market – of all time, hitting a billion dollars in revenue within its first 18 months according to the Messari report, and the company shows no signs of slowing down. 

Aside from being one of the best Cryptocurrency exchanges, Binance keeps its growth in different aspects of digital assets. One of the most recent products of Binance is Binance Coin (BNB), which is the cryptocurrency of the Binance platform. As of 2019, many businesses accept BNB as a form of payment.

The below chart shows the speed and number of products that Binance has launched in recent times compared to other Cryptocurrency exchanges. 

Source Crypto these for 2020 Messari research

Binance API

 

Having a trading bot on Binance could be profitable, but there are few steps that need to be taken in order to set up the trading bot in Binance. Binance does allow trading bots, and it provides API keys to help you connect your exchange accounts to the software. API keys are generated within Bianace users account dashboard. In the API Management section, users can create corresponding API keys.

Binance also allows to easily customize permissions for the API key, to make it safe for automated software and have a security process to prevent unauthorized API key generation on user accounts.

At Empirica we used WebSocket for data feed and REST for sending orders. This is forced by API and how Binance endpoints look like.

We use standard WebSocket connections for data exchange (DeX) streams, which can be consumed by modern web browsers and server-side WebSocket libraries. These connections include:

  • The base endpoint for mainnet
  • The base endpoint for testnet 
  • Each connection can consume a single stream or multiple streams may be multiplexed through one connection for more complex apps

When it comes to execution through the Biancne API, the most simple way that a trade can be executed is by specifying the endpoint, the relevant account IDs and the two assets which will be traded. The result is to buy and sell assets without worrying about the specifics of how the trades are executed.

Trading Bots on Binance

 

Trading bots are algorithms that through API integration could automate tradings on different markets such as cryptocurrency exchange. 

At Empirica, we have integrated our trading bots with Binance API, so that our customers can use it out of the box. Let’s name some trading bots that can be applied through API integration on Binance:

  • Market Making bot: the process of quoting continuous passive buy and sell prices to provide liquidity, and also be able to make some profits during this process. 
  • Arbitrage bot: this bot capitalizes on small differences between markets. It is a trading activity that makes profits by exploiting the price differences of identical or similar financial instruments on different markets.
  • Price mirroring bot: this bot uses liquidity and hedging possibilities from other markets to make the markets in a profitable way.
  • Triangular Arbitrage bot: using this bot a trader could use the opportunity of exploiting the arbitrage opportunity from three different FX currencies or Cryptocurrencies.
  • Basket Orders bot: with this bot, it is possible to execute trades on multiple coins at the same time with the possibility to hedge against other coins.
  • VWAP bot: using this bot a trader can achieve the best price with large order by splitting it into multiple smaller ones throughout the trading day.
  • Smart Order Routing bot: with this bot, the trader can find the best price for your order on all crypto exchanges and execute it.

In case you would need help from professional software developers to help you build proprietary trading bots and integrate it with API of Binance or other crypto exchanges, you can consult our quant team.