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Trading bots, explained by operators.

Live · Tracking 50 top traders on Hyperliquid

What a trading bot really is, what it costs, and whether it makes money. Research-grade guides on bots, copy trading and algorithmic strategies, written by people who run real capital through them.

Start with the answerBrowse 30 guides →
50
Traders tracked live
$3.1B
30-day volume
$69M
30-day PnL
Our live indexHYPE SHORT 30%PUMP LONG 30%BTC LONG 26%ETH LONG 20%SOL LONG 14%
Quick answer

What is a trading bot?

A trading bot is software that buys and sells on an exchange automatically, following a predefined strategy through an API, 24/7, with no emotion and no sleep. The bot only executes. Whether it makes money depends on the strategy, the fees, and the risk controls behind it. After costs, most retail trading bots lose.

Full guide: What is a trading bot? →Do trading bots actually work? →How to use one safely →
Why trust us

We trade what we write.

✓Every claim about costs, fees and funding checked against live exchange data
✓No affiliate links, no sponsored rankings, no paid placements
✓Risk stated in numbers, not disclaimers buried in footers
✓Read our editorial methodology →

Most trading content is written by marketers. Ours is written next to a live trading operation.

We built a copy-trading index, run our own money through it 24/7, and publish what we learn, including what fails.

What it really costs
0.045%
A real perp taker fee

What each trade costs on a modern perp DEX, before slippage and funding.

~2%/mo
Realistic running costs

Fees + slippage + funding. Any strategy that can't clear this is losing money politely.

−25%
Where a kill switch belongs

Our live system flattens everything at 25% drawdown from peak.

Taxonomy

The 6 types of trading bots

Every retail bot is a variation of six mechanics. Each guide covers how the strategy works, when it wins, and, more important, exactly how it loses.

01Grid bot →

Trades a fixed price range: sells ripples, buys dips. Dies in strong trends.

02DCA bot →

Averages into positions on a schedule or drawdown. Simple, but stacks risk.

03Momentum bot →

Follows trends and breakouts. Feast in trends, chop-death in ranges.

04Market-making bot →

Earns the spread quoting both sides. Competitive, inventory-risk heavy.

05Arbitrage bot →

Captures price gaps across venues. Real edge, brutally latency-sensitive.

06Copy-trading bot →

Mirrors proven traders automatically. Our live index runs on this model.

How it works

The whole machine

Strategy decides, the bot executes against the exchange, and every fill feeds back into the next decision. Nothing about automation creates profit by itself.

Strategyrules & risk limitsBotexecutes 24/7Exchangeorders via API

Fig. 1. The whole machine. Strategy decides, the bot executes against the exchange, and every fill feeds back into the next decision. Nothing about automation creates profit by itself.

Featured research

Start with the honest answers

Basics

Do Trading Bots Actually Work?

The honest math on fees, crowded strategies, and who really profits.

Copy Trading

Why Copy Traders Lose Money

Slippage, lag, and leader risk: the mechanics platforms gloss over.

Risk

Backtest Overfitting

Why a perfect backtest usually means a broken strategy.

Basics
What is a trading bot?Do trading bots work?How to use a trading botWhat bots really costAre trading bots legal?Trading bot scamsBot vs manual trading
Copy trading
How copy trading worksWhy copy traders loseChoosing traders to copyPortfolio allocationCopy trading on perp DEXs
Strategies
Grid botsDCA botsMomentum botsMarket-making botsArbitrage botsStrategy by market
Risk
Position sizingUnderstanding drawdownBacktest overfittingLeverage and botsSingle-trader risk
Running bots
Exchange APIsSecuring API keysRunning 24/7VPS vs home serverOn-chain vs CEX bots
Crypto markets
Perpetual futuresFunding ratesHyperliquid bots
FAQ

Straight answers

What is a trading bot and how does it work? +
A trading bot is software that places buy and sell orders on an exchange automatically, following a predefined strategy over an API, 24/7, without emotion. The bot only executes; the strategy decides whether you make money. Full breakdown: What Is a Trading Bot?
Do trading bots actually make money? +
Some do, most don’t. Costs, crowded strategies, and overfit backtests eat most retail bots. Our guide Do Trading Bots Actually Work? covers the honest math.
How much does a trading bot cost? +
Hosted platforms run roughly $10–$100 per month, exchange-native bots are free, and custom development starts around $10k. Fees and slippage are the real cost, though. Numbers in What a Trading Bot Really Costs.
Are trading bots legal? +
Yes. Automated trading is legal on regulated exchanges in most countries, as long as the strategy itself is legal (no spoofing or wash trading) and the platform allows bots. Details in Are Trading Bots Legal?
What’s the difference between a grid bot and a DCA bot? +
A grid bot trades a fixed price range, selling ripples and buying dips; a DCA bot averages into a position on a schedule or on drawdowns. Both lose badly in strong trends; the risk sections of each guide show when.
Do trading bots beat buy-and-hold? +
Usually not after fees. Most retail bots underperform simply holding the same asset, and the ones that win do it with strict risk control, not prediction. See Bot vs Manual Trading for the comparison.
How do I spot a trading bot scam? +
Guaranteed returns, screenshots instead of on-chain proof, pressure to deposit with the vendor, and "AI" with no strategy explanation are the big four tells. The full checklist: Trading Bot Scams.
What is a copy-trading index? +
Instead of copying one trader’s every move, an index mirrors the aggregate positioning of many proven traders at once, diversifying away single-trader blowups. See how copy trading works.
Is trading.bot a product I can use? +
Not yet. Today this is an independent research site; we run our own capital through a live copy-trading index we built, and we publish what we learn.
Who writes these guides? +
The trading.bot Research Desk. See our editorial standards and about page. No affiliate commissions, no sponsored rankings.
Domain for sale

trading.bot is for sale.

We're open to selling this exact-match premium domain, optionally together with the site, its research library, and the live copy-trading index behind it. Serious inquiries only.

Direct: per@markusakerlund.com

✓Exact-match .bot domain for the "trading bot" category. One word, one meaning.
✓30 research-grade guides covering the full trading-bot topic cluster, live on the domain.
✓Working product surface: a live copy-trading index and dashboard run here today.
✓Fast, clean transfer. Held at a mainstream registrar; escrow welcome.