# Best crypto trading bot setup (open source, dry-run first)

Updated: 2026-10-24 | Cluster: Data and analysis | Canonical: https://theailoadout.com/best-ai-setup/crypto-trading-bot/

> Educational only, not financial advice. Trading involves risk of loss, including losing more than you put in with leverage. Start with paper trading. We may earn affiliate commissions from some links, which never change our picks. Nothing here is a performance or profit claim.

For most people who want a crypto trading bot, start with Freqtrade. It is free and open source (GPL-3.0), runs on Windows, macOS and Linux, and has backtesting, a dry-run mode that trades without real money, machine learning optimization with FreqAI, a web UI and Telegram control. Use Claude Code to write and review strategies, and keep the bot in dry-run until you understand how it behaves. Pick Hummingbot instead for market making or arbitrage across many exchanges. This page is educational only and is not financial advice.

| Slot | Pick |
|---|---|
| Tool | [Claude Code](https://www.anthropic.com/claude-code) |
| Model | [Claude Opus 5.5 (frontier) or Qwen 3.5 27B (local)](https://theailoadout.com/models/claude-opus-5-5/) |
| Skill | [Freqtrade backtesting and dry-run](https://github.com/freqtrade/freqtrade) |
| Persona | [The Crypto Strategy Reviewer](https://theailoadout.com/best-ai-setup/crypto-trading-bot/#copy-this-setup) |
| Bot | [Freqtrade](https://theailoadout.com/bots/freqtrade/) |

## Why each pick
- Tool: Freqtrade strategies are Python files. A coding agent can write one, explain it line by line, write the backtest command and spot look-ahead bias. Keep exchange keys out of the agent's reach.
- Model: Opus 5.5 at max effort topped Terminal-Bench 4.0 per GenAI Brief in mid October 2026, which matters for writing and debugging strategy code. For a private setup, Qwen 3.5 27B or Gemma 4 26B in Ollama or LM Studio runs on a 24 to 32 GB machine.
- Skill, Freqtrade backtesting and dry-run: Backtest on historical data, then dry-run live for weeks. Never skip the dry-run step.
- Skill, Trade-only exchange keys: If you ever go live, give API keys trade-only permission with withdrawals off and cap position sizes, as TradingAgentStack advises.
- Persona: Most bot losses start with an untested or overfit strategy. This persona reviews code before it runs.
- Bot: Freqtrade is the trading engine: it backtests, runs dry-run, and can manage the bot from Telegram or its web UI, per its README. TradingAgentStack lists it as the most popular open-source crypto strategy bot, at about 55k GitHub stars.

## Comparison
| Option | Best for | Model(s) | Price | Free plan |
|---|---|---|---|---|
| Freqtrade | Strategy bots with backtesting and dry-run | FreqAI (ML) | Free (GPL-3.0) | Yes |
| Hummingbot | Market making, arbitrage, DEX | Condor AI harness | Free (Apache 2.0) | Yes |
| Alpaca crypto (paper) | Crypto plus stocks from one MCP server | Any MCP client | Paper account free | Yes |

## Persona prompt
```
You review Freqtrade strategies. For any strategy I share: explain the entry and exit rules in plain English, flag look-ahead bias, data leakage and overfitting, check that stoploss and position size are set, and write the backtest and dry-run commands. Assume dry-run only. Never suggest leverage, never promise returns, and say clearly when a backtest sample is too small to mean anything. This is not financial advice.
```

## What changed
- 2026-10-24: Page launched with initial picks. Prices and features were checked on the official pages listed under Sources.

## FAQ
### What is the best free crypto trading bot?
We pick Freqtrade: free, open source, with backtesting and dry-run. Hummingbot is the pick for market making. Not financial advice.

### Are crypto trading bots profitable?
We make no profit claims. Grid and DCA bots can lose heavily in trending or crashing markets and leverage can liquidate an account. Test in dry-run first.

### Is Freqtrade safe?
The code is auditable and keys stay on your machine, but you are responsible for hosting, updates and risk limits. Use trade-only keys with withdrawals off.

## Sources
- [Freqtrade README (GitHub)](https://github.com/freqtrade/freqtrade)
- [Hummingbot.org](https://hummingbot.org/)
- [TradingAgentStack: open-source AI trading bots (Oct 23, 2026)](https://tradingagentstack.com/open-source-ai-trading-bots/)
- [Alpaca docs: Trading API MCP server](https://docs.alpaca.markets/us/docs/trading-api-mcp)
- [GenAI Brief: best LLM for coding, October 2026](https://genaibrief.com/models/best-llm-for-coding/)