How to set up a trading bot on Bybit? A step-by-step tutorial.

Understanding Bybit's API Integration

1. Log in to your Bybit account and navigate to the API Management section under Account Security.

2. Click “Create API” and select the appropriate permissions—ensure “Trade”, “Order”, and “Account” are enabled for full bot functionality.

3. Enter a descriptive API name and set an IP whitelist; leaving it blank allows access from any IP but increases security risk.

4. Confirm creation using your two-factor authentication method and securely store the API Key and Secret Key—these cannot be retrieved later.

5. Verify that the API status shows as “Active” before proceeding to bot configuration.

Selecting a Compatible Bot Framework

1. Choose between open-source frameworks like CCXT, Bybit’s official Python SDK, or third-party tools such as Hummingbot or 3Commas.

2. For custom development, install the Bybit Python SDK via pip: pip install bybit.

3. Ensure your environment supports WebSocket connections if real-time order book or trade execution is required.

4. Check documentation for rate limit compliance—Bybit enforces strict limits on REST and WebSocket calls per second.

5. Validate framework compatibility with Bybit’s current API version (v5 is mandatory for new integrations as of Q2 2024).

Configuring Core Trading Logic

1. Define entry conditions using technical indicators—RSI divergence, Bollinger Band squeezes, or moving average crossovers are commonly implemented.

2. Set stop-loss and take-profit levels programmatically using Bybit’s conditional order endpoints.

3. Implement position sizing logic based on account equity and volatility metrics—not fixed lot sizes.

4. Integrate time-based filters to avoid trading during low-liquidity windows such as weekends or major economic announcements.

5. Add order type selection logic—market orders for speed, limit orders for price control, and reduce-only flags for hedging scenarios.

Testing and Deployment Strategy

1. Run all logic against Bybit’s testnet environment using sandbox API keys before deploying to live markets.

2. Simulate edge cases including partial fills, order rejections due to insufficient margin, and network timeouts.

3. Deploy the bot on a VPS located in Singapore or Hong Kong to minimize latency to Bybit’s primary servers.

4. Monitor logs for HTTP status codes—especially 401 (invalid signature), 429 (rate limit exceeded), and 503 (service unavailable).

5. Enable email or Telegram alerts for critical events such as margin call triggers or unexpected position openings.

Frequently Asked Questions

Q: Can I run multiple bots with the same Bybit API key?A: Yes, but shared keys increase risk exposure. Each bot should use a separate API key with minimal required permissions.

Q: Does Bybit support trailing stop orders via API?A: Yes, v5 API supports trailing stops for both USDT and inverse perpetual contracts using the place-order endpoint with tpslMode=TrailingStop.

Q: Why does my bot receive “Invalid sign” errors consistently?A: This usually results from incorrect timestamp synchronization, wrong secret key usage, or improper string concatenation during signature generation—verify system clock drift and HMAC-SHA256 implementation.

Q: Are there restrictions on how often I can modify an active order?A: Bybit allows up to 30 order modifications per second per API key. Exceeding this triggers a 429 response and temporary throttling.