Friday, January 28

How to use the KuCoin trading Bot?

A cryptocurrency trading bot is software that is programmed to automate investment operations in search of profits, speculating on the value of these digital assets.

They are capable of automating all processes. From the most basic and simple orders to complex entry and exit decision processes in the markets, according to defined profitability and risk parameters.

In reality, Bots are programs that are responsible for executing certain activities in a totally autonomous way. That is, Bots can evaluate a certain amount of data and execute an action based on the data collected.

Similarly, Bots can be configured to perform certain activities automatically, based on a series of regulations and instructions.

Very important, trading Bots, execute operations 24 hours a day, 7 days a week without missing the best moment of trading opportunities.

What is a trading bot?

We must understand that cryptocurrencies are known to be volatile, with prices fluctuating dramatically even in the space of minutes. In many cases, investors cannot react quickly enough to changes in price to achieve the optimal trades that are theoretically available to them.

Furthermore, investors simply cannot spend as much time in the cryptocurrency markets as is necessary to achieve the best trades every time. Doing so would require 24-hour monitoring of crypto exchanges around the world.

That is why one of the main solutions is Trading Bots or automated tools that transact and execute transactions on behalf of human investors. They are easy to use and do not require any programming knowledge.

In fact, all you need is a list of assets you want the robot to trade, the entry / exit conditions you want, and how often you need to trade using the strategies you have chosen.

How do they work?

A trading Bot can work in two ways and the first of them is like this:

  1. The user buys the Bot of his choice.
  2. Link the Bot to your trading account.
  3. Establish the market or financial asset with which you will work.
  4. Leave the Bot on automatic, so that it does certain activities, according to the behavior of the market.
  5. The Bot will be in charge of studying the market, trying to locate those beginnings of a downward or upward trend.
  6. In case of detecting movements that are indications of an upward trend, it will buy the asset in question (according to the parameters established by the user in advance).
  7. The Bot will be studying the market, until it detects movements that are an indication of a downward trend and will sell the assets purchased previously, generating a return for the investor.

Now, there is also another way in which trading bots work and it is as follows:

  1. The user buys the Bot of his choice.
  2. Link the Bot to your trading account.
  3. Establish the market or financial asset with which you will work.
  4. It establishes a series of regulations in the Bot, so that it knows what movements it should look for to buy and in which market movements it should sell.
  5. The Bot will be in charge of studying the market, looking for the ideal movements to buy and sell, according to the owner’s specifications.
  6. They will buy and sell, according to the data that most closely resembles the guidelines that have been indicated.

It is important to note that this operation can vary greatly depending on the Bot in question. For example, users KuCoin worldwide have created 5 million trading Bot.

Why KuCoin Trading Bot?

All things considered, due to the non-stop function of the crypto market, if you want to execute a trade after reaching a certain threshold to catch the best moment, you have to sit in front of your screen and watch the changing chart of the market 24 hours a day, 7 days a week. Whereas a Trading Bot can monitor market holdings on your behalf and execute 24-hour trades non-stop.

Indeed, KuCoin Trading Bots are excellent for tracking and making the most of market fluctuations, as they will continue to arbitrage with the flow of the market.

In fact, trading bots can “assemble and copy” repetitive tasks to help you execute trades easily.

What does KuCoin offer?

Indeed, KuCoin offers Four types of Trading Bot strategies: Spot Grid, DCA, Futures Grid and Smart Rebalance.

  • Spot Grid. It is new and easy to use. Suitable for operators with a lower appetite for risk.
  • Dollar-Cost Averaging (DCA). It helps investors to automatically buy a certain number of shortlisted tokens at a specific time, optimizing their average entry price.
  • Futures Grid. Supports long / short trades with up to 5x leverage. Offers higher returns with higher risks during market volatilities.
  • Smart Rebalance. It is considered a new way to manage your wallet.
Trading Bot strategies.  Source: KuCoin
Trading Bot strategies. Source: KuCoin

1. Spot Grid

Earn passive income by buying low and selling high, to make a profit in a specific price range. Therefore, it is a good strategy in a volatile market and higher volatility can lead to higher returns.

For example, if you think that the price of Bitcoin will fluctuate between $ 50k and $ 60k in a specific period. You can set between $ 50k and $ 60k as your Spot Grid price range to allow it to arbitrate for you within the range.

Very important, if you are new to Spot Grid, it has two features to help you get started easily. One is called AI Parameters, which allows you to directly use the recommended Bot settings based on the historical data of the coin.

Similarly, the other way is to copy the settings of others. On the leaderboard page, you can check the Bot configuration details of the top winners and copy your preferred one with just a few clicks. As you become more familiar with the bots’ strategies, you will also be able to further customize the parameters.

Spot Grid. Fuente: KuCoin
Spot Grid. Fuente: KuCoin

2. Dollar-Cost Averaging (DCA)

It is a strategy to divide the total amount of investments between periodic purchases of a specific asset to reduce the impact of volatility on the overall purchase.

In short, this Bot will automatically buy a certain amount of pre-selected tokens in a pre-set time interval. For example, you can set up to buy $ 50 worth of BTC at 8am every day to slowly grow your holdings. As the lower drop is hardly predictable, DCA will optimize our average entry price.

The best thing, is that with KuCoin DCA Bot, you can set an investment objective to make a profit, let’s say a 10% profit. Once the goal is reached, you will be notified and decide whether to stop making a profit.

3. Futures Grid

The way a Futures Grid Bot works is similar to a Spot Grid Bot in that both can earn passive income by buying low and selling high. But, Futures Grid has two unique features that can help investors increase their profits.

Futures Grid. Fuente: KuCoin
Futures Grid. Fuente: KuCoin
  • First of all, the Futures Grid Bot allows you to go long or short when starting the Bot. It means that you can choose a long / short direction when starting a Futures Grid Bot.
  • Second, leverages are compatible with Futures Grid. Currently, KuCoin supports up to 5x leverage, amplifying the return on your trades by 5x. However, always remember that higher returns also mean higher risks.

4. Smart Rebalance

Thus, it is ideal for long-term traders with diversified asset positions. For newbies, you can think of it as a smart investment broker for wallet management. It is well known for its agile and worry-free features compared to point manual operations.

Smart Rebalance. Fuente: KuCoin
Smart Rebalance. Fuente: KuCoin

So Smart Rebalance can help holders increase their earnings even more. The core of this strategy is to increase the total number of positions while maintaining the pre-established wallet percentage.

For example, assuming you want to allocate 40% of your fund to BTC, 30% to ETH, and 30% to KCS, if you simply have, the wallet will change with the changing value of these tokens. The Smart Rebalance Bot will rebalance the percentage according to your expectations once you deviate from the initial settings.

In closing, are trading bots the best option to invest your money? Leave your opinion in the comment box.

I leave with this phrase from Sarah Aerni: «It is just as important to educate the new generations to come as I also think it is important to teach the existing workforce, so that they can understand how to make Artificial Intelligence serve them and their roles.».