It has been a few months since I entered into Kucoin’s trading bot. I started with just like USD 100 and now I have placed about USD 1000 on to their trading bots. Here are some lessons I have learned about using the trading bot and what you guys should expect. First and most important of all – this trading bot is NOT an automated money making machine. You will not be guaranteed to be making money just because you allow a machine or some logarithm to do trading for you. It does not work like that. You should expect to make losses especially when the market is in the downtrend. Of course I am talking about the grid (or spot) trading bot on Kucoin. There are other trading bots available for their users but I am specifically talking about their spot trading bot. Why? Because it is actually pretty much easier to understand.
So timing the market is still key. How much profits you are making will depend on when you enter the market simply because you are trading with two assets. So if you hold onto an asset that is going down in value, your overall profits will still go down. The trick is to ensure that the arbitrage profits is more than the dip in price. Basically what the bot does is to divide your funds into parts and buying at certain intervals. So if you put in 1000 USDT, they will divide that 1000 USDT into smaller portions (perhaps like 10 x 100 USDT) and start buying up assets at intervals. How it makes traders money is by profiting from ups and downs in the market. So if by choosing an asset that is more volatile, it will have a higher chance of being profitable. Of course all these are in theory only.
For me, I have been making a loss for my bots for the past few days. This was due to the dip recently. I was making some profits for the past month or so and then this happened. Very disappointing to say the least. So yes, it is still very dependent on market forces. I would also recommend those interested to diversify their assets as well. You should go with a few trading bots instead of just dumping everything into one. Why? Well it can be very hard to predict which crypto asset will tank. So diversifying into different assets is actually a hedge as well. For me, I go for one trade in meme coins, one in layer 1 coins and maybe 1 or 2 in other tokens as well. I try to avoid using trading bots with Bitcoin if possible – BTC is usually less volatile compared to altcoins. So grid trading will not be that profitable if you ask me.
There are also some advanced features for the Kucoin Trading bot which might be useful for investors. One of which is let the bot know when to get into the market. You can set the price where the bot will enter to maximize your profits. I think I will be setting them up once I get out of the current trading bots. It is stupid to just go in without any idea on what is happening in the crypto market anyway. Remember, grid trading bot is a lot like spot trading. Timing is key. Of course if we knew when and where to get into any market, we will all be billionaires already. And Kucoin has different types of trading bots as well. These might be worth while to explore as well.
Anyway I will update you on how the trading bots are going. And don’t forget to take profits. Please do your own research when it comes to investing. I am not a financial advisor. Take care!