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# How to Set Up a Crypto Trading Bot — Step by Step

Setting up a crypto trading bot involves connecting an automation platform to your exchange account. The process is the same regardless of which bot platform you choose — 3Commas, Cryptohopper, or any other API-based tool. (If you’re using Pionex, the bots are built in — skip to Step 4.)

This guide covers the complete process from exchange setup to going live.

Step 1: Set up an exchange with API support

You need an exchange that supports API connections. For Australians, the best options are:

  • Binance AU — deepest API, best liquidity, 0.1% fees
  • Kraken — strong API, excellent security, 0.16%/0.26% Pro fees
  • Bybit — strong for derivatives and advanced strategies

Note: Swyftx and CoinSpot have basic APIs and are not recommended as primary bot exchanges. See our exchange comparison for details.

Step 2: Create API keys

On your exchange, navigate to API Management (usually under Settings or Security). Create a new API key pair.

CRITICAL: Disable withdrawal permissions. Your bot only needs to read your balance and place trades. If you disable withdrawal permissions, even a compromised API key cannot move funds off your exchange. This is the single most important security step.

Set permissions to:

  • ✅ Read (view balance and positions)
  • ✅ Trade (place and cancel orders)
  • ❌ Withdraw (ALWAYS disable this)

Copy both the API key and secret key — the secret is only shown once.

Step 3: Connect to your bot platform

On your chosen bot platform, navigate to Exchange Connections (or similar). Paste your API key and secret. The platform will verify the connection.

  • 3Commas: Accounts → Connected Exchanges → Add Exchange
  • Cryptohopper: Dashboard → Exchanges → Configure
  • Pionex: No API needed — bots are built into the exchange

Step 4: Choose and configure your first bot

For your first bot, start simple:

DCA bot — if you want automated accumulation with safety orders. Good for beginners.
Grid bot — if you want to profit from sideways markets. See our grid trading guide.

Configure conservatively:

  • Use a small allocation ($50–200 to start)
  • Set a maximum number of safety orders / grid levels
  • Don’t use leverage on your first bot
  • Choose a liquid pair (BTC/USDT or ETH/USDT)

Step 5: Paper trade first

Every serious bot platform offers paper trading or demo mode. Use it. Run your configuration for at least a week in paper mode before committing real money. Watch how the bot behaves, understand why it makes each trade, and verify that the settings match your expectations.

Step 6: Go live with a small amount

When you move to real money, use significantly less than you think you should. Your first live bot is a learning exercise. A $100 allocation is enough to see real behaviour without risking meaningful capital.

Monitor the bot daily for the first week. Check each trade, verify the logic makes sense, and confirm fees and fills are as expected.

Step 7: Set up tax tracking

Bot trading generates high transaction volumes. Every trade is a potential CGT event in Australia. Connect Koinly to your exchange before you activate any bot.

Common mistakes

Going live without paper trading. Always test first.
Using too much capital on the first bot. Start with $50–200. Scale up after you understand the behaviour.
Leaving withdrawal permissions enabled on API keys. Always disable.
Not monitoring the bot. “Set and forget” sounds appealing. In practice, bots need oversight — especially during unusual market conditions.
Ignoring fees. Bot trades incur exchange fees on every transaction. Factor this into your expected returns.

FAQ

Which bot platform should I use?

Beginners: Pionex (free) or Coinrule (no-code). Intermediate: 3Commas or Cryptohopper. See our full bot comparison.

How much money do I need?

Most platforms have no minimum. Start with $50–200 while learning.

Can I lose money with a trading bot?

Yes. A bot executes your strategy — if the strategy is poor, the bot loses money efficiently. Always paper trade first, start small, and set risk limits.

Which exchange works best with bots?

Binance AU and Kraken offer the strongest API support. See our exchange comparison.