How I Made $3 Million Profit With Trading Bot—KuCoin Trading Bot Roundtable Discussion
Dear KuCoin Users,
Time: 01:00PM - 02:30PM Mar. 17, 2023 (UTC)
KuCoin hosted a Roundtable Discussion session in the KuCoin Trading Bot Discussion Group. And the guests included a mysterious crypto whale, John from Fracton, Richard who is an old friend of the KuCoin community, and trading bot expert Dantas.
Q&A with the mysterious crypto whale
Host: Hello friend, can you introduce yourself to KuCoin Trading bot fans?
The Mysterious Whale: Hey everyone! I use nickname Nobody in KuCoin. Just like many of you, I'm a trading bot user too. I've been using trading bots for quite a while now, I guess about two years. Since I noticed the longest-running bot in my panel has been actived for over 600 days. In my trading journey, I've also written APIs for some automatic trading, I am also a programmer. I'm pretty sure I was among the first users of the KuCoin trading bot. I usually prefer using grid bots and smart rebalancing. Overall, I'm super optimistic about crypto in the long run, so I'm a HODL. It's really awesome to meet all of you here!
Host: My first question, when would you normally start a trading bot?
The Mysterious Whale: Actually, I use the grid bot as an auxiliary tool to help me automate trading.
Whether I'm trading manually or using a bot, my trading decisions remain the same. The asset targets and the timing of entry and exit are consistent. But a trading bot can reduce my holding costs and increase my profits.
For example, if I trade manually and achieve a 50% return, a trading bot could magnify it to 100% or even higher. In this case, the trading bot has been a huge help and is indispensable. So now, I make many trading decisions using a trading bot.
Suppose I believe the current price of BTC is low, and I want to buy 10 BTC; I'll do it through the grid bot instead of place an order in the spot market orderbook. If I want to sell 10 BTC, I also use the grid bot instead of selling manually. So, I don't just use the grid bot as a profitable trading strategy but as an auxiliary tool for trading.
For instance, if I think the price of BTC will fall in the next 1-2 months and I want to buy at the bottom but am unsure where that is, what do I usually do? I'll set up a grid bot with an upper limit of 26k and a lower limit of 20k. As the price drops, I will acquire more and more BTC. If it falls to 20k, all my positions will be in BTC. If it only drops to 24k, the bot will help me buy some BTC, and my holding cost will be lower than if I bought it immediately today at 26,000. If BTC goes up, I don't buy the dip, but I don't incur any losses either, just the same way I put a maker order to buy it but the price goes up.
Another example, if I want to sell 10 BTC and am unsure if selling will cause me to lose the opportunity to sell at a higher price, let's say BTC rises to 30,000 and I lose a lot of potential profits. In that case, I usually use the grid bot to help me sell. I set the lower limit at 27,000 and the upper limit at 30,000. When the BTC price reaches 27,000, the bot will sell part of my positions for me. When BTC rises to 30,000, it will sell all of my BTC. Also, during the selling process, as the price fluctuates, the bot will earn grid profits, resulting in higher total profits. So, I mostly start the trading bot when I need to buy or sell. This also includes adjusting my positions by adding or reducing them at the right investment opportunities after starting the bot.
Host: Apart from spot grid, do you use any other bots to help you trade?
The Mysterious Whale: Yes, I use Smart Rebalance to manage my cryptos. KuCoin has been a great help to me with this bot.
Since I'm a long-term crypto investor, I continuously allocate my crypto positions. I put a significant portion of my crypto assets into the Smart Rebalance bot. Managing the positions myself could cause me to miss trading opportunities, like increasing my position when prices fall or selling when they rise.
For example, I hold a substantial amount of Doge because I'm very optimistic about the project's future. I'm also an Elon Musk fan. But I don't have time to watch the market every hour every day, so I use the Smart Rebalance bot to help me manage my positions.
I set it up for daily or weekly rebalancing. The bot will decrease the positions of rising coins and increase the positions of falling coins to maximize my portfolio's returns. Moreover, if a coin keeps rising, the bot can automatically sell it for me to lock in profits.
For instance, I now use Smart Rebalance to manage BTC and USDT, with a total of 1 million in assets—50% in BTC and 50% in USDT. That means when I opened the bot today, I held 500,000 in BTC and 500,000 in USDT.
If BTC rises by 20% tomorrow, the value of the BTC position will increase from 500,000 to 600,000, exceeding 50%. The bot will then sell 50,000 worth of BTC and transfer it to USDT. At that point, I'll have 550,000 in BTC and 550,000 in USDT. By using Smart Rebalance, I can earn more BTC than buying spot without any manual operation. This is just a simple example. Managing a portfolio with dozens of cryptos would be much more complicated and hard to control manually.
As a long-term investor, Smart Rebalance helps me automate crypto asset management. It assists me in holding more cryptos and increasing my assets' value.
Host: How to set the grid interval?
The Mysterious Whale: If you want to maximize the profit of your grid, the core is how to make your "fishing net" catch more "fish". Only by ensuring that the price can fluctuate in this range in the next period of time can it continue to arbitrage.
The fluctuation of each coin is different, and the fluctuation of the same coin in different periods is also different. When the fluctuation is relatively large, the grid interval I set will be larger. When the fluctuation is relatively small, the grid interval is relatively narrow.
Host: How to set the number of grids?
The Mysterious Whale: In practice, it depends on price fluctuations. If it is a coin with relatively large fluctuations, your grid spacing should be larger. If the grid is set very densely, the trading will be more frequent, the trading fee will be higher, and the profit will be less. If the grid spacing is large enough, the proportion of trading fees will be lower and the profit margin will be larger.
If it is a coin with relatively small fluctuations, then you need more grids. If the grid spacing is too large, it is like the fishing net is not dense enough, and the small fish will run away. You can't make arbitrage with these small fluctuations.
Q&A with John (Fracton Senior Researcher)
Host: Can you tell us what is Fracton Protocol?
John: Fracton Protocol is all about NFTs and their trading side, allowing speculation and ownership of top NFTs easier than ever before. We are a fractionalization protocol, meaning we breaks NFTs into tiny pieces to ERC-20 tokens, where each token is just a millionth of the original NFT.
So for example,Bored Apes is a great investment, but they're super expensive, like 100k, right? But with our fractionalized hiBAYC, you can still own the bored ape NFT asset for just a millionth of the cost!
This makes those high-end NFTs way more affordable and easier to use in all sorts of apps, whether they're on chain or off chain..Fracton Protocol also uses a super-efficient smart contract design to keep everything running smoothly and make sure your assets are safe.
Host: What are some achievements Fracton Protocol has accomplished? Why should we pay attention to what you guys are doing?
John: Well, we're the first NFT-fi protocol to bridge the gap between the off-chain and on-chain worlds, giving you the best of both. Fracton Protocol is now the second biggest player in NFT fractionalization, with over 10 Million Dollar of TVL., only behind NFTX, but we have more trading pairs available.
So far, we've successfully fractionalized more than 25 blue-chip NFTs, and you can find them all on Kucoin. These hiNFT tokens are getting really popular among KuCoin traders and NFT collectors, and it's easy to see why – they offer better price discovery and a whole lot more trading opportunities!
Host: What are the key reasons why hiNFTs have more trading opportunities compared to other cryptocurrencies?
John: First off, you can actually redeem hiNFTs, which opens up arbitrage chances that you won't find in a lot of other crypto currencies.
Another cool thing is that hiNFTs are backed by carefully chosen blue-chip NFTs. This makes them way less risky than most crypto projects, so they're perfect for setting up trading bots, there are fluctuations and the price of hiNFTs can not hit zero, which lowers the risk even more when it comes to trading these tokens.
DCA into your NFT
Grid Trading: take advantage of the volatilities in hiNFT.
Host: Could you provide more information about the rewards for the hiNFT trading bot competition, as it appears that hiNFTs are quite appealing to trading bot users? I have heard that the prize pool is significant, at $10,000 USDT.
John: We're super excited to announce a trading bot competition with a prize pool of $10,000 worth of hiNFT tokens up for grabs! During the contest, if you meet certain conditions, you could win big.
We'll be picking 20 lucky winners every day from qualified users to share a 20,000 HIBAYC prize pool. But that's not all – the top performers will also get to split a prize pool of $6,000 worth of hiNFT tokens!
You'll be sorted into different divisions based on your trading volume (both buys and sells) and runtime on the Trading Bot. Then, you'll have a chance to share the corresponding prize pool and win different prizes. How awesome is that?
Host: Are there any other ways to win prizes during the hiNFT trading bot competition, besides participating in the actual trading?
John: Even if you don't want to dive into the hiNFT trading bot competition, there's still a chance for you to win some prizes! If you'd rather just watch the actions from the sidelines, you can join in by spreading the word and following us on social media. All you need to do is complete the Gleam tasks, and you'll be eligible for prizes.
We have a great community we constantly share trading tips and host rewarding events, head over to Twitter and Telegram and search for "Fracton Protocol." You don’t want to miss out on this.
Q&A with Dantas (Senior Bot Trader)
Host: Do you have any practical experience about trading bots that you can share with us?
Dantas: Yes. Today, I will discuss the functionalities of each bot, the markets they are best suited for, and their differentials in relation to other commercial bot platforms.
Before we begin, let's first take a moment to define what a trading bot is. A trading bot is a software program that uses algorithms and mathematical models to analyze market data and execute trades on behalf of the user. The goal is to automate trading strategies, reduce the risk of human error, and potentially increase profits.
Now, let's take a closer look at the different types of bots available on the KuCoin platform:
- Spot Grid Bot - This bot is designed for spot trading on KuCoin. It uses a grid trading strategy, which involves placing buy and sell orders at regular intervals on both sides of the current market price. The bot is customizable, allowing users to set their own grid range and order sizes. This bot is best suited for investors who want to take advantage of short-term price movements in volatile markets. The Spot Grid Bot is different from other grid trading bots in that it is capable of setting limit orders to buy at a lower price and sell at a higher price simultaneously.
- Futures Grid Bot - Similar to the Spot Grid Bot, this bot is designed for futures trading on KuCoin. It uses a grid trading strategy to place buy and sell orders at regular intervals, with the goal of taking advantage of price movements and generating profits in both up and down markets. The Futures Grid Bot is ideal for investors who want to capitalize on the volatility of futures markets. It is also customizable, allowing users to set their own grid range and order sizes.
- Martingale Bot - This bot is designed to help investors recover from losses by increasing the size of their trades after each loss. This strategy is based on the idea that a winning trade will eventually occur, and will be large enough to cover the previous losses. However, it can also be risky if the market continues to move against the investor. The Martingale Bot is best suited for investors who are comfortable with a higher level of risk and want to take advantage of potential market trends.
- Infinity Grid Bot - This bot uses a variation of the grid trading strategy, in which orders are placed in a zigzag pattern across a wide price range. This can help investors take advantage of long-term price trends and potentially generate profits in a wide range of market conditions. The Infinity Grid Bot is customizable, allowing users to set their own grid range and order sizes. This bot is ideal for investors who want to take a longer-term view and build positions over time.
- Smart Rebalance Bot - This bot is designed to help investors rebalance their portfolios automatically, based on their desired asset allocation. It can help investors maintain a diversified portfolio and avoid overexposure to any particular asset. The Smart Rebalance Bot is ideal for investors who want to take a hands-off approach to portfolio management and let the bot do the work.
- DCA Bot - The Dollar-Cost Averaging bot is designed to help investors gradually accumulate a position in a particular asset over time, by making regular purchases at fixed intervals. This can help investors avoid the temptation to buy or sell based on short-term market fluctuations and instead focus on their long-term investment goals. The DCA Bot is best suited for investors who want to take a disciplined approach to investing and avoid the emotional ups and downs of the market.
Each of these bots has its own strengths and weaknesses, and is designed for different types of markets and investors.
Host: How to pick the right entry and exit point for different strategies?
Dantas: The right entry and exit points for different strategies depend on a variety of factors, such as market conditions, asset volatility, and risk tolerance. To determine the best entry and exit points, traders can use technical analysis tools like moving averages, relative strength index (RSI), and Bollinger Bands to identify trends and potential support and resistance levels. Fundamental analysis can also be used to evaluate market sentiment and assess the long-term potential of an asset.
For example, a trader using the Spot Grid Bot may want to use technical analysis to identify a range of prices in which to place buy and sell orders. The trader can set the grid range and order sizes based on their analysis of market trends and volatility.
Host: How to pick the cryptocurrency for different strategies?
Dantas: The choice of cryptocurrency for different strategies depends on the trader's investment goals, risk tolerance, and market analysis. Each cryptocurrency has unique characteristics, such as market capitalization, liquidity, and volatility, which can affect its suitability for different trading strategies.
For example, a trader using the Futures Grid Bot may choose to focus on cryptocurrencies with high volatility and liquidity, such as Bitcoin and Ethereum. These assets are well-suited to the grid trading strategy, which relies on short-term price movements to generate profits.
Host: How to pick long term trading pairs suitable for long term gains?
Dantas: When selecting long-term trading pairs, investors should consider factors such as the asset's market capitalization, adoption rate, and long-term potential. It's important to conduct thorough fundamental analysis to evaluate the long-term prospects of the asset and its underlying technology.
For example, a trader using the Infinity Grid Bot to generate long-term gains may focus on cryptocurrencies with a solid track record of adoption and long-term potential, such as Bitcoin, Ethereum, or other established projects in the crypto space.
Host: How to choose the correct range and number of grids for spot grid?
Dantas: Choosing the correct range and number of grids for the Spot Grid Bot requires careful consideration of market conditions and risk tolerance. The range should be set based on technical analysis, such as identifying support and resistance levels and assessing market volatility. The number of grids should be set based on the trader's risk tolerance and desired profit potential.
For example, a trader using the Spot Grid Bot in a highly volatile market may choose to set a wider range and more grids to take advantage of short-term price movements. Conversely, a trader using the bot in a more stable market may choose a narrower range and fewer grids to minimize risk.
Host: What should I do if grid bot runs out of range?
Dantas: If the Grid Bot runs out of range, the trader should review their settings and adjust them accordingly. The bot may have been set up with a range that is too narrow or may have been configured incorrectly. The trader can adjust the range and grid settings to ensure that the bot continues to function as intended.
In addition, it's important to regularly monitor the bot's performance and adjust settings as needed. Market conditions can change quickly, and traders should be prepared to adapt their strategies to ensure the bot continues to generate profits.
Host: In conclusion, the KuCoin Trading Bot offers a range of bots designed to meet the needs of different types of investors and markets. Each bot has its own strengths and weaknesses and is customizable to meet the specific needs of the user. We hope this sharing has been informative and has helped you better understand the world of automated trading. Thank you for joining us!
Sharing from Richard (KuCoin Cooperative Analyst)
Richard: First, let’s go over BTC, ETH and USDT.D to feel the overall market. Then we will dive into Altcoins that are suitable for KuCoin trading bots.
Bitcoin broke above 25,000 so now our next rejection would be around the 30,000 supply zone.
As per my last analysis on Kucoin groups, we know that the bulls already took over from a short-term and long-term perspective. We will remain bullish UNLESS we break below the last major low in blue. In this case, a correction till the blue 25,000 demand zone would be expected. Meanwhile, we would be bullish and BTC can test 30,000.
Ethereum broke above 1700 so now the next rejection would be around 2,000.
The bulls will remain in control UNLESS we break back below the 1700 zone, in this case a bearish correction would be expected.
USDT.D is now around 6.5% support in blue. If broken downward, then a movement till 6% green support would be expected, which would be good for the crypto market.
If USDT.D breaks above the last major high in gray, we will be expecting a bullish movement, thus a bearish movement for the crypto market.
Now let’s get into Altcoins suitable for Trading Bots:
To me, a ranging market is the best market condition for grid / martingale trading bot. And KCS is a perfect example in this case. No wonder why Mr.Nobody has good results using the trading bots on KCS. Salute to him! Once you locate a ranging market, you can activate the grid / martingale trading bot. Make sure to specify the parameters according to the length of the range.
Another example is TON as I mentioned multiple times during previous sessions.
Lately, TON has been trading inside a big range which is suitable for trading bots. You can find a lot of pairs available for trading bot trading on Kucoin.
Lately, Kucoin announced that it has added many trading pairs for Futures grid - Trading Bots! There is a big list, so feel free to check it here.
But what I find interesting the most is: USDC/USDT. I never thought of it! and maybe you wouldn't too.
But due to the fact stable coins have been experiencing volatility during the past week, (especially USDC) it makes total sense! Especially if it is traded through a trading bot. as you wouldn't catch the quick movements! I find this really interesting because who ever thoughts that we might have the opportunity to make money through the fluctuations of stable coins!
So make sure to check it out and play with it. Be safe, trade safe, and most importantly enjoy the process.
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