Trading Bot 101: KuCoin Trading Bot Now Supports 4 Strategies! How To Find The Bot Fits You Most?
Launched in early 2021, KuCoin Trading Bot has been up and running for some time. This product has gained considerable attention and interest as to whether in a bullish, bearish, or turbulent market, it can offer the same convenience, time-saving, speed, and intelligence that make it stand out from the crowd of existing trading bots.
Recently, the KuCoin Trading Bot has introduced its latest trading strategy called the Smart Rebalance. It is another useful tool after Classic Grid, DCA, and Futures Grid to help users gain profits during market volatility. In this blog post, we will walk you through the four amazing bots and help you find the ones that suit you most.
1. What is KuCoin Trading Bot?
KuCoin Trading Bot is a free trading tool that can help users save time and energy while improving their profit. It is equivalent to configuring a 24/7, all-around bot butler for your trading strategy.
2. What are the advantages of KuCoin Trading Bots?
a. Reduce repetitive work.
Trading Bots can "assemble and copy" repetitive tasks to help you easily execute trades. For instance, if you rebalance your investment portfolio every four hours, you can use a Smart Rebalance Bot and program it so that the Bot will automatically balance your investment portfolio.
b. Seize the trading opportunity.
Timing is important when it comes to trading, and each of your trades will have a huge impact on the potential profit. For example, if you want to execute a trade after reaching a certain threshold, you need to sit in front of your screen and observe the changing market chart - likely for hours, so that you won’t miss the best timing. While using a trading bot can monitor market holdings on your behalf and execute trades 24 hours non-stop.
c. Reduce trading risks.
In most cases, the market is fluctuating. Trading Bots are great for tracking and making the most out of market fluctuations, as they will continue to carry out arbitrage with the flow of the market. For instance, in the extreme unilaterally rising market, the trading bots will not miss profit; in the unilaterally falling market, they can help reduce user losses and further reduce investment risks.
3. Which Trading Bot Fits You Most?
a. Classic Grid: Make Passive Income By Buying Low & Selling High
(Classic Grid running page — provided by KuCoin user)
As one of the most classic and popular trading strategies, Classic Grid works by selling high and buying low to gain profits in a specific price interval. So it is a good strategy in a volatile market, and higher volatility may bring higher returns.
For instance, if you believe Bitcoin price will fluctuate between 30k and 40k in the following days, you can set the two prices as the price range of your Classic Grid. Then the bot will arbitrage for you within the interval.
Classic Grid is a relatively low-risk strategy but it still needs time to reveal its power. Most bots running for a couple of days will result in a nice grid profit.
If you are new to Classic Grid, it has two features to help you get started easily. One is called AI parameters, which will suggest the bot settings based on the historical data of the coin. The other way is to copy others’ settings. In the ranking page, you can find the top gainers and it is allowed to check their bot and copy it in a few clicks. As long as you are familiar with this bot, you can also customize the parameters to try your preferred settings.
b. DCA (Dollar-Cost Averaging): Lower Your Average Entry Price Via Continuous Investment
(DCA running page — provided by KuCoin user)
Imagining you are bullish for Bitcoin in the long run and want to spend 5% of your monthly income into it, previously you have to make the purchase manually every month while with the help of DCA bot, things will become so much easier.
In short, this bot will automatically purchase a certain amount of pre-chosen token at a specific time set by the investor. For instance, buy $50 worth of BTC at 8am everyday to slowly grow your holdings. As most of us can hardly predict the real dip of the market, DCA can help optimize our average entry price in most cases.
DCA is a quite mature strategy in the finance world, and it works best in the initial stage of a bull market. It is easy to start but it can be a bit hard to decide when to stop profit. In the KuCoin Trading Bot, you can set an investment target, say 10% gain, before starting the bot. Once the target has been reached, you can have the bot either notify you or stop profit automatically.
For more info about DCA, check Here
c. Futures Grid: Bring Classic Grid To The Futures Market
(Futured Grid running page — provided by KuCoin user)
The way a Futures Grid Bot works is similar to a Classic Grid Bot, both of them can make passive income by buying low and selling high. But Futures Grid has two unique features that can help investors make more profits.
Firstly, just like we can long or short a token on KuCoin Futures, the Futures Grid Bot allows you to long or short when starting the bot. It means that if you think Bitcoin price will go down, you can also implement grid trading via Futures Grid on KuCoin Trading Bot.
Secondly, leverages are supported on Futures Grid. Presently, it supports up to 5 times leverage, which can increase the returns of your success trades by 5 times. However, always remember that higher returns imply higher risks.
So how to make a choice between Classic Grid and Futures Grid? In most cases, Classic Grid Bot can fulfil your needs, while Futures Grid bot is preferred if:
a. You want to make a profit in a downward trend market, or
b. You want to apply leverages in your trade
Please also bear in mind that, compared with the Classic Grid Bot, the Futures Grid Bot runs on the futures market. In the case of extreme market volatility, a risk of liquidation still exists.
For more info about Futures Grid operation content, check tutorials for Futures Grid 1
d. Smart Rebalance: Grow Your Portfilio Even You Just HODL
(Smart Rebalance running page — provided by KuCoin user)
The latest strategy introduced on KuCoin Trading Bot is Smart Rebalance, a strategy that is favored by crypto holders. Holding has been proved to be a successful way to earn profits as it is found that very often the return of holders outperforms that of crypto traders.
Smart Rebalance can assist holders to further increase their returns. The core of this strategy is to increase the total amount of assets while maintaining the portfolio percentage basically unchanged. Assuming that you want to allocate 40% of your fund to BTC, 30% to ETH and 30% to KCS, if you are simply holding, the value of these tokens may change over time and the portfolio percentage will soon no longer be 40% - 30% - 30%. With a Start Rebalance Bot, the percentage can always be close to your expectation as once it deviates from the initial setting, the bot will make a rebalance.
Some may wonder, what is the meaning of rebalance? On the one hand, you can always stick to your expected portfolio percentage, on the other hand, the amount of your tokens will grow through rounds of rounds of rebalance.
So what actually happens in rebalance? Let’s say your portfolio percentage has changed from 40% - 30% - 30% to 45% - 30% - 25%, the bot will then sell some Bitcoin to reduce its percentage from 45% to 40%, meanwhile buy some KCS to make it back to 30%. In a sense, grid trading is to buy low and sell high between two tokens, while Smart Rebalance is to do so among all the tokens in your portfolio.
Currently, the rebalance can be triggered on ratio or time per your settings. Like you can have the bot to make a rebalance every 12 hours, or once the percentage deviation is over say 2%.
4. Closing Thoughts:
KuCoin Trading Bot offers multiple tools to help investors implement their trading strategies easily, increasing their winning chance in the crypto market. While a tool is just a tool, what it can achieve still depends on how we use it. So it is important to understand how it works, and keep improving your strategies in practice.
Click to find more about KuCoin Trading Bot review.
Click Here to download the latest version of the KuCoin App and hope you can enjoy the trading experience with KuCoin Trading Bot.
Sign up on KuCoin, and start trading today!
Follow us on Twitter >>> https://twitter.com/kucoincom
Join us on Telegram >>> https://t.me/Kucoin_Exchange
Download KuCoin App >>>https://www.kucoin.com/download