A Cryptocurrency Trading Bot is software that is programmed to automate profit-seeking investment transactions, speculating on the value of these digital assets.
They are able to automate all the processes. From the most basic and simple orders to complex market entry and exit decision processes, according to defined profitability and risk parameters.
In reality, Bots are programs responsible for carrying out certain activities in a completely autonomous way. That is, Bots can evaluate a certain amount of data and take action based on the data collected.
Likewise, Bots can be configured to perform certain activities automatically, based on a series of regulations and instructions.
Very important, trading robots, execute 24/7 trading without missing the best time of trading opportunities.
What is a trading bot?
We need to understand that cryptocurrencies are known to be volatile, with prices fluctuating dramatically even within a matter of minutes. In many cases, investors cannot react quickly enough to price changes to achieve the optimal transactions that are theoretically available to them.
Additionally, investors simply cannot spend as much time in the cryptocurrency markets as is necessary to make the best deals every time. This would require 24 hour surveillance of crypto exchanges around the world.
This is why one of the main solutions is Trading Bots or automated tools that process and execute transactions on behalf of human investors. They are easy to use and do not require any programming knowledge.
Basically all you need is a list of assets you want the robot to trade, what entry / exit conditions you want, and how often you need to trade using the strategies you have chosen.
How do they work?
There are two ways that a trading bot can work and the first of them is as follows:
The user buys the Bot of his choice. Connect the Bot to his trading account. Establishes the market or financial asset with which it will work. Leave the Bot in automatic mode, so that it performs certain activities, depending on the behavior of the market. The Bot will be responsible for studying the market, trying to locate the beginnings of a downward or upward trend. In case of detection of movements indicating an upward trend, it will buy the asset in question (according to the parameters previously established by the user The Bot will study the market, until it detects movements indicating a tendency to the decline and will sell the previously purchased assets, generating a return on investment for the investor.
Now there is also another way that trading robots work and it is as follows:
The user buys the Bot of his choice. Connect the Bot to his trading account. Establishes the market or financial asset with which it will work. Establishes a series of regulations in the Bot, so that it knows what moves to look for in order to buy. and in which market movements it must sell. The Bot will be responsible for studying the market, looking for the ideal moves to buy and sell, according to the owner’s specifications. It will buy and sell, based on data that most closely resembles the guidelines. has indicated.
It is important to note that this operation can vary greatly depending on the Bot in question. For example, KuCoin users around the world have created 5 million trading bots.
Why KuCoin Trading Bot？
All things considered, due to the non-stop feature of the crypto market, if you want to execute a trade after reaching a certain threshold to grab the best time, you have to sit in front of your screen and watch the changing market chart. 24/7. Whereas a Trading Bot can monitor market positions on your behalf and execute trades around the clock without interruption.
This is because KuCoin Trading Bots are great for tracking and making the most of market fluctuations as they will continue to arbitrate with the flow of the market.
In fact, trading robots can “assemble and copy” repetitive tasks to help you easily execute trades.
What does KuCoin offer?
Indeed, KuCoin offers four types of Trading Bot strategies: Spot Grid, DCA, Futures Grid and Smart Rebalance.
Grid of points. It is new and easy to use. Suitable for traders with a low risk appetite. Average cost in dollars (DCA). It helps investors to automatically buy a certain number of preselected tokens at a specific time, thus optimizing their average entry price. Futures contract grid. Supports long / short trades with up to 5x leverage. Offers higher returns with higher risks during volatilities in the Smart Rebalance market. It is considered a new way to manage your portfolio.Robot trading strategies. Source: KuCoin
1. Points grid
Earn passive income by buying low and selling high, to make a profit within 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 the price of Bitcoin will fluctuate between $ 50,000 and $ 60,000 during a specific time period. You can set the Spot Grid price range between $ 50,000 and $ 60,000 to allow it to arbitrate within the range for you.
Very important, if you are new to Spot Grid, it has two features to help you get started easily. One is called AI Settings, which lets you directly use recommended Bot settings based on historical room data.
Likewise, the other method is to copy the settings of others. On the leaderboard page, you can check the configuration details of the Top Winners Bot and copy the one you like the most with just a few clicks. As you become more familiar with the bot strategies, you will also be able to further customize the settings.
Grid of points. Source: KuCoin
2. Average cost in dollars (DCA)
This is a strategy of dividing the total amount of investments between periodic purchases of a specific asset in order to reduce the impact of volatility on the overall purchase.
In short, this Bot will automatically buy a certain amount of preselected tokens within a predefined time interval. For example, you can prepare to buy $ 50 worth of BTC at 8 a.m. everyday to slowly build up your holdings. As the smaller drop is difficult to predict, DCA will optimize our average entry price.
The best thing is that with KuCoin DCA Bot you can set an investment target to make a profit, say 10% profit. Once the goal is reached, you will be notified and decide to stop making a profit.
3. Futures contract grid
The operation of a Futures Grid Bot is similar to that of a Spot Grid Bot in that both can earn passive income by buying low and selling high. But Futures Grid has two unique characteristics that can help investors increase their profits.
Futures contract grid. Source: KuCoin First of all, the Futures Grid Bot allows you to be long or short when starting the Bot. This means that you can choose a long / short direction when you start a Futures Grid Bot. Second, the levers are supported by 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 risk.4. Smart rebalancing
Thus, it is ideal for long term traders with diversified asset positions. For beginners, you can think of him as a smart investment broker for portfolio management. It is well known for its nimble and worry-free features compared to one-off manual operations.
Smart rebalancing. Source: KuCoin
Thus, Smart Rebalance can help cardholders to increase their income even more. The heart of this strategy is to increase the total number of positions while maintaining the pre-established portfolio percentage.
For example, assuming you want to allocate 40% of your fund to BTC, 30% to ETH, and 30% to KCS, if you have simply done so, the portfolio will change with the changing value of those tokens. The Smart Rebalance Bot will rebalance the percentage based on your expectations once you deviate from the initial settings.
In conclusion, are trading robots the best option for investing your money? Leave your opinion in the comment box.
I retire with this sentence from Sarah Aerni: “It is as important to educate the new generations to come as I also believe it is important to teach the existing workforce, so that they can understand how to put artificial intelligence at the service of them and their roles. “.
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