While you have probably heard about trading bots already, you have probably also disregarded them for being out of your league in terms of programming skills and knowledge needed to run them. Well, KuCoin exchange aims to change that with their platform’s native Trading Bot.
The KuCoin trading bot can easily be programmed to utilize several different trading strategies and trade for you 24/7. But can it also make money for you as you sleep?
In this article, we will cover the basics of the KuCoin trading bot and the strategies it can utilize.
ArbitrageScanner is one of the best arbitrage scanners in the market, combining robust automated trading features with support for over 15 exchanges and 20 blockchains. In addition, new ArbitrageScanner users can get up to a 66% discount.
Key highlights:
KuCoin Exchange, a top altcoin exchange, caters to over 10 million crypto traders globally and offers services like spot trading, futures trading, staking, lending, and its cutting-edge Trading Bot.
Trading bots are automated tools that perform trades for investors, which is especially beneficial in the volatile and 24/7 crypto markets, where bots can seize opportunities even while investors sleep.
KuCoin Trading Bot offers five different strategies—DCA, Spot Grid, Futures Grid, Smart Rebalance, and Infinity Grid—each catering to different risk appetites and trading objectives.
The Spot Grid Bot, popular among beginners, profits from market volatility, while the Infinity Grid Bot, designed for crypto "FOMO," avoids missing out on market pumps.
While trading bots aren't guaranteed money-makers, KuCoin's AI-driven bots can offer high returns with minimal effort, but it's crucial to select a strategy aligning with your risk tolerance and to start with a small investment.
KuCoin Exchange repeatedly titled the best altcoin exchange
KuCoin is a cryptocurrency exchange that launched in September 2017 and raised more than $20 million in Round A funding the following year. A period of exponential growth and development of the KuCoin ecosystem followed, resulting in the fact that today, this Seychelles-headquartered exchange caters to the needs of more than 10 million crypto traders from 207 countries and regions around the world.
KuCoin currently supports more than 700 digital assets and enables the trading of more than 1,100 different trading pairs. This widespread asset support is one of the main reasons why KuCoin is repeatedly referred to as the Number #1 altcoin exchange. Nevertheless, KuCoin is also among the top crypto exchanges judging by trading volume.
KuCoin offers a wide range of services, including spot trading, margin trading, P2P fiat trading, futures trading, staking, and lending. But in this article, we will look into perhaps the most cutting-edge service KuCoin has to offer - the exchange’s Trading Bot.
Kucoin is one of the best cryptocurrency exchanges that allows you to buy, sell, and trade Bitcoin, Ethereum, and 700+ altcoins. Sign-up now and get $700 welcome bonus.
Sign-Up Now
What is a Trading Bot?
Crypto trading bots are automated tools that conduct trades and execute transactions on behalf of human investors. While also utilized in other markets (such as stocks, commodities, etc.) trading bots have turned out to be especially welcome in cryptocurrency markets. The reason is likely the rapid and high fluctuation of crypto prices, which in many cases leave investors very little (close to none) time to react.
In addition, the crypto markets are open 24/7, and no one has the time or energy to continuously monitor the markets. This is where crypto trading bots come into play. As a trader, you just pick the desired strategy and set the parameters, such as the entry/exit conditions and the frequency of trades. The bot then performs the trades under these conditions. It seizes all opportunities, even those that arise while you sleep or are on holiday.
The advantages of using KuCoin Trading Bot
As already mentioned, the KuCoin trading bot monitors the markets non-stop and can execute trades at any given moment. However, using a trading bot has a few other benefits.
For example, automated trading reduces trading risks and can increase profits as it allows the investor to make the most out of market fluctuations. Bots can help you accumulate profits in an extremely unilaterally rising market and help you control losses in an unilaterally falling market.
Last but not least, following some trading strategies can be very time-consuming. In these cases, letting the bot do the trading can significantly reduce the repetitive work, leaving you more time on your hands to enjoy spending your profits. The fact that over 10 million trading bots have been created on the KuCoin platform up to now speaks about its benefits for itself.
KuCoin Trading Bot can follow five basic strategies
KuCoin Trading Bot can be programmed to trade on your behalf based on five different strategies: DCA, Spot Grid, Futures Grid, Smart Rebalance, and Infinity Grid. The strategies differ by the market on which the bot trades (spot vs. futures), and therefore, there are risks associated with using the trading bot.
Comparison of different KuCoin Trading Bot strategies.
1. KuCoin DCA Trading Bot
DCA stands for Dollar-Cost Averaging, a popular technique for continuous and long-term investors that reduces the impact of volatility on the overall purchase price. A trader that follows a DCA method invests in an asset periodically, this means either on the same day every week in case of weekly investments or on the same day of the month in case of monthly investments.
In addition, the amount invested is the same at every investing event (for example, $100 dollars every week). The investment is made regardless of the price of the asset at that time. The DCA Trading Bot is a relatively simple tool that can help you lower your average entry price and reduce the risks of volatility when you are building up your cryptocurrency portfolio.
When you are creating a DCA bot, you just need to pick the asset you wish to buy, the amount to be spent on each purchase, and the day and frequency at which you wish the purchases to be made. You can also set an investment target for your DCA bot.
For example, if you set it into 20%, the bot will alert you when your holdings have made a 20% gain. You can then decide whether you want to keep DCA-ing or sell your crypto and take a profit. The DCA bot is also very helpful if you want to automatically allocate part of your regular income (e.g., salary) to your crypto portfolio. In the long run, DCA and holding can deliver good returns.
2. KuCoin Spot Grid Trading Bot
Spot Grid is one of the most popular trading strategies. While the DCA tries to eliminate the risk of price volatility, the Spot Grid strategy aims to capitalize on that exact same volatility. In fact, the more volatile the market is, the greater the potential that utilizing this strategy will return high profits.
The strategy works by buying low and selling high in a specified price interval. For example, if you believe that Bitcoin will fluctuate between $20,000 and $25,000, you can set a Spot Grid bot that will buy BTC every time it trades at $20,000 and sell the bought coins every time the price hits $25,000.
KuCoin Spot Grid Trading Bot is suitable for traders with lower-risk appetites and beginner traders, as it is very user friendly and supports a minimum investment of $10. In addition, if you don’t have the knowledge to decide in which price interval you want to order the bot to trade, you can choose the AI parameters feature, which will help you determine the optimal price interval bot setting based on the historical data of the coin.
Another helping tool is to use the copy function and replicate other people’s bot settings. The performance of various trading bots is displayed in the rankings page, which you can check and then choose to copy the most profitable bot. As you get more familiar with the spot grid strategy, you are encouraged to customize the bot parameters yourself. In most cases, the longer the spot grid bot runs, the higher the return.
An example of a Spot Grid Trading Bot that made a 68% profit in less than 31 days.
3. KuCoin Futures Grid Trading Bot
A Futures Grid Bot works very similarly to the Spot Grid Bot, with two key differences. First, the Futures Grid supports placing both long and short positions, meaning that you can make money no matter which way the market moves. Second, the Futures Grid bot can make trades with up to 10x leverage, which amplifies the return of your trading by up to 10 times.
However, trading with high leverage is associated with considerable risk. Because of this, the Futures Grid strategy is suitable for investors who are seeking high returns and have relatively high-risk tolerance. The Futures Grid is also the way to go if you want to make a bot that utilizes leveraged trades or makes a profit in a bearish market.
4. KuCoin Infinity Grid Trading Bot
The Infinity Grid strategy is a derivative strategy of the Spot Grid, designed to avoid missing out on crypto pumping. While the Spot Grid bot operates with fixed entry and exit prices, the Infiniti Grid bot operates in percentages. The Infinity Grid bot will execute a sell order whenever the market price increases by a predetermined percentage, and vice versa, it will execute a buy order whenever the market price decreases by the same percentage. This percentage setting is called profit per grid, and users can pick a profit per grid anywhere between 0.2 and 10%.
The bot monitors the market 24/7 and tries to buy the dips and sell the spikes. Because the bot does not operate at fixed prices, there is no upper price limit at which the bot can stop trading. As such, the Infinity Grid bot is perfect for those living in constant FOMO on the next price spike. On the other hand, the Infinity Grid bot allows you to set a Stop Price, a price below which the bot will no longer execute trades. The bot will also try to make sure that your base currency position stays around the same USDT value as when you launched the bot.
5. KuCoin Smart Rebalance Trading Bot
The Smart Rebalance bot is regarded as the new way of managing your crypto portfolio. The core of this strategy is to increase the total value of your crypto portfolio while maintaining the pre-set percentage each asset represents in the portfolio. For example, let’s say John allocates 50% of his funds to BTC, 30% to ETH, and 20% to KCS. After some time, the percentage ratios will alter due to price fluctuations, with assets that gained value representing a larger chunk of the portfolio than at the beginning.
However, if John used the KuCoin Smart Rebalance bot, the allocation of funds in his portfolio would always stay the same as the bot would rebalance his positions. You can set the bot to perform the rebalance at a certain time-frequency (1 hour, 4 hours, 8 hours, 12 hours, daily…) or when the percentage deviation is over a certain percent (available settings are from 1% to 5%).
This strategy is ideal for long-term holders of diversified asset positions. It is also worth mentioning that performing a rebalance manually requires a lot of calculations and placing several trades, resulting in the fact that this procedure is very time-consuming. With KuCoin Smart Rebalance trading bot the rebalances can happen as you sleep.
The bottom line
While trading bots are not necessarily money-making machines, KuCoin’s little robots can deliver high returns with very little effort if utilized correctly. The first crucial selection when setting up a trading bot is picking a strategy that best suits your investment mentality and risk tolerance.
Picking the right parameters for the trading bot comes only second. In addition, the KuCoin platform can help you with the latter with AI-generated recommendations. Nevertheless, we advise you to do your own reading and start with a small investment when it comes to setting up your first trading bot.
If you want to explore other crypto bot exchange offerings, we suggest you look into our guide to setting up the Bistamp trading bot.
