Development of a trading bot for trading on the Coinbase Pro crypto exchange

The American cryptocurrency exchange Coinbase Pro, also known by its old name GDAX, provides traders with many advanced trading features. In particular, it allows you to trade with the highest leverage in the market – 500:1, provides competitive commissions, insurance coverage for all assets held, and an industry-leading API.

The last point is especially important when creating trading bots – software for automating the work of traders. In this article, we will take a closer look at how such tools work, why they are useful, and how they are developed.

Depending on the format of use in the markets, trading bots are divided into four main types. Let’s consider them in more detail:

• Trend-following bots. They monitor the situation in the markets and use trend signals to enter a short or long position.
• Bots for lending. They allow you to earn by providing assets to margin traders at interest.

• Arbitrage bots. They are used to make money on price imbalances that may occur in various markets. To do this, they track the price of coins on different exchanges, futures and options markets.
• Market maker bots. They are involved in trading within the spread, due to which they generate a fairly high profit. In fact, they buy assets at the bid price and sell to investors at the ask price.

Our team can develop any kind of trading bots and uses the most relevant and productive technologies for this, but we’ll talk about this a little further.

A trading bot is, first of all, an automation tool capable of performing most of a trader’s routine tasks. However, the use of such tools provides other important advantages:

• Fast reaction. The bot instantly reacts to any changes in the market, due to which it allows you to earn more both in short and long distances.
• Lack of emotion. During operation, the bot is guided not by emotions and feelings, but by cold calculation and algorithms, which reduces the risk of human errors.

• Management of risks. The bot has built-in risk management strategies that it can automatically deploy to mitigate losses in adverse market conditions.
• Multitasking. Unlike a human, a bot is able to perform many tasks at the same time, which increases the efficiency of a trader.

As we wrote above, when developing a crypto bot for Coinbase Pro, our team uses only modern and innovative technologies. Most often, the CCXT library becomes the basis of the stack. It provides public and private APIs out of the box, and also supports work not only on Coinbase Pro, but also on more than 120 other crypto exchanges, which is especially useful when creating market maker bots.

To work with CCXT, you can use one of three programming languages – Python, PHP, and JavaScript (Node.js). Accordingly, developers have the opportunity to choose the most appropriate stack for each specific project.

If we talk about the implementation of the frontend part, then any technology can be used here: standard JavaScript / HTML / CSS or reactive frameworks such as Vue.js and React.js.

In addition, our team can develop a mobile application that allows a trader to manage the bot directly from their smartphone. To this end, the following technologies will be used:

• Native – Kotlin/Java for Android and Swift for IOS.
• Cross-platform – Flutter framework and Dart language.

The development of a trading bot is a rather complicated process consisting of six successive stages. Below, we will consider what work is performed at each stage:

• Information gathering. Starting work on the project, the team studies the needs, tasks, and priorities of the customer. Based on this data, top-level documentation is compiled.
• Prototype. A bot prototype is formed, which includes: interface warframes, a description of all functionality, and module flowcharts. We also carefully study the project’s mathematics – the formulas that will be incorporated into the code to perform calculations. To simplify communication with the client, our team records presentation videos to demonstrate the mockup to the client, which allow them to understand how the trading bot will work and look like after the release.

• Design development. The design team develops the UI concept of the bot and creates an attractive, convenient, and comfortable user interface. To achieve the best result, we usually offer several variants of visual environment concepts.
• Frontend. When the design mockups are ready and approved, developers start developing the client side of the trading bot. Front-end development includes layout, creation of animations, tables, and other components that the browser can read, write, or display on the user’s screen.
• Backend. The server side of a trading bot is responsible for processing, storing, and transmitting data to the client. When implementing it, developers design databases, write functional code, connect APIs, and build a client-server architecture. To improve the efficiency of the bot, we can also develop and implement innovative solutions based on neural networks and artificial intelligence.
• Testing. After the development is completed, the trading bot undergoes testing, during which all modules and functions are checked for errors. This task is performed by QA engineers.
• Technical support and development. Then the bot is released and can be used for trading on Coinbase Pro. But at the same time, it is important to focus on the further development of the project so that its functionality always meets the current market requirements. To do this, we offer to connect the bot to our technical support.

Trading bots are used by most professional traders. This is not surprising, because they automate most routine tasks, reduce risks and allow you to eliminate errors caused by the human factor. Therefore, investments in the development of such a tool are quite reasonable and, in a favorable market situation, can pay off quite quickly.

For the development of trading bots, AVADA MEDIA has already formed teams of qualified specialists. With practical experience in the industry, they will help you design, develop and bring to market the most effective product that fully meets your goals and strategies.