[Update: 16-Nov-2021]Users who are interested might want to compare whether holding an asset is more worthwhile rather than using a trading bot. I feel that if you are looking for ways to lower your risk, then the trading bot would be a decent option. It is arbitrage anyway. But if you are thinking of maximizing your profits, then I don’t think using a trading bot is the way to go. And if you are bullish about a particular cryptocurrency, it might be better to just buy and hold that cryptocurrency instead.
Ok I am not someone who likes to just buy assets and then forget about it. Sure I have some cryptocurrencies which I will buy and hold onto for the long term. But frankly speaking I am someone who loves to login to my crypto Exchange and go check how well my assets are doing and to check the crypto news daily. That is just me. However it can be very tiring to say the least. And the mental drain is quite something for me. With full time work with a silly little blog and a Youtube channel to look after, I can feel the strain already. And my overall investments are pretty small. All in all about USD 10k only. But it is just so tiring to keep track of everything. So you can see why a “free” trading bot appeals so much to me.
When I say “free” I mean there are no additional charges to using the bot. However there will still be transaction fees being incurred on each transaction. If you choose spot grid (or classic grid), how this Kucoin trading bot works is simple – they will buy and sell on your behalf. The idea behind it is to buy low and sell high and they do it at various intervals. The term used is arbitrage. This also helps to spread some of the risks. So every time the bot buys or sells assets, you are incurring the transaction fees. This is definitely good for Kucoin. Of course it might be good for you as well. The key word here is MIGHT. However the biggest advantage of using a trading bot is that you won’t need to spend your time in front of your monitor or your mobile device to monitor the charts. You just let the bot do all the work for you.
Do note that if you expect the price of a certain asset to go up – you would be better off buying that asset instead. You will incur less fees and the price of the asset hopefully will go up. The trading bot buys in at various intervals and these will seldom be that optimal when compared to buying in at a lower price. And yes you can lose money from trading bots as well – this is especially true when the cryptocurrency in question is dropping in value. Again the trading bot might cushion the drop in price for you as they will sell in intervals. But then if you know when the price of an asset will rise or fall, you won’t need a trading bot in the first place. If I can predict prices, I would probably won’t be writing a blog post about it too. Probably be one of the richest person on the planet.
So when should you use the trading bot then, you might ask? Well the consensus seems to be that you should use the trading bot if you believe the asset in question is going to be trading more or less sideways but can be rather volatile. The prices will go up and down but still be trading around a certain range. This way, the trading bot can make good use of the “buy low, sell high” strategy constantly. That is in fact what it is designed primarily to do. In most cases, this should generate a little profit for you. It also make sense as a human we can’t really spot the top and the bottom of such a cycle. Even experts in this field will have a hard time as well. Just imagine how precise you need to be to spot all those tops and bottoms. And you will probably need to invest into the bot for some time too. Don’t expect to come in and make a quick buck. It just doesn’t work that way.
I have put in about 100 USDT just for this experiment. Will do using the DOT/USDT trading pair as I don’t think the price of DOT will raise or drop that much these few weeks. I will update you guys in about a month or so. However this is a reminder that just because you use the trading bot does not mean that you will make profit from it. If the price of the asset you are using the bot on falls, you will most likely still make some loss. And you should not just leave the trading bot alone as well. If the price is trading outside of the parameters, the bot will also cease to trade. You will still need to come in once in a while to check.
Take care all!