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I Spent $10,000 on Kucoin Crypto Trading Bots - YouTube
Channel: Max Maher
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I'm investing $10,000 into crypto trading bots.
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Now that I've spent my money and the clock is ticking,
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let's break down crypto trading bots,
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what they do, when you should use them,
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and how exactly to set them up.
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Everything you need to know and of course,
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we'll show how much money I
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hopefully make towards the end of this video.
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The bots that I'm covering are all located on Kucoin.
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I will have Kucoin linked in the description of this video.
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So let's take a quick look at Kucoin's bot page.
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That way you can familiarize yourself
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before we jump into the specific bot types.
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To get to the Trading Bot menu, you just open up Kucoin
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and click the Trading Bot button on the home screen.
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Here you'll find four pages.
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First is "Bots".
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This is where you'll create new bots.
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Here you can also click tutorials for lots of helpful tips
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and videos about Kucoin bots.
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None is helpful as the one that you're watching right now, though.
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Second is "Running".
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This is where you'll find any of your currently running bots.
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Third is "Profits".
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This is where you can see an overview of all your profits
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or losses from your trading bots.
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And fourth is "Ranking".
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This is basically a leaderboard for everyone using Trading Bots,
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and you can see how much money or how much losses
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each and every person has made.
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And I do have one extremely important note here.
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For some reason, Kucoin annualizes
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all the returns shown on the leaderboard,
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which is why it says APR,
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but you can clearly see that most of these bots
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haven't even been running for two days.
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So those percentages are not realistic.
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The top bots hit upwards of like
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10% to 20% returns
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on a fantastic day, which is awesome.
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But there's absolutely no way they're getting that
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every single day for an entire year.
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Now let's talk about the first bot, the Spot Grid bot.
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This is the bot that I just dropped $10,000 into, and it's
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probably the most exciting of the four bots.
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So here's how it works.
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The Spot Grid trading bot is designed to
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thrive in a volatile market
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by quickly buying and selling
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as the price of a coin fluctuates.
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It does this by placing a range of
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buy and sell orders between two specific price points.
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And this is where it gets its name, as the spread of buy and sell orders
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creates a grid.
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So let's do an example.
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The price of a crypto is $1.
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You start a grid trading bot with a range of
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$0.50 to a $1.50.
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If the price drops below $1, the bot buys.
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If it increases in price, it sells.
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So let's say our coin drops below $1.
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The bot would then buy.
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If the price dropped further, it would buy more and more
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as it hit more of those buy orders, aka grid lines.
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Finally, it would stop buying if that price
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hit a low point of $0.50.
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If it goes below $0.50, it wouldn't buy any more.
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Then let's say the price starts increasing and it climbs above $1.
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The bot would then begin to sell,
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and the higher it climbs above $1,
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it hits more grid cell lines,
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and it would sell more and more
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until the price hits $1.50, in which it would not sell anymore
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because there's nothing left to sell.
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So the way a bot like this makes money is if the
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price of the coin bounces, in this example,
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below $1 and above $1,
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buying low, selling high again and again.
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Now when should you use this bot?
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The grid trading bot, like I said, is
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amazing for volatile markets.
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So similar to how you could short a coin with futures
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if you're bearish on its price,
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this is what you would do if you think
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a coin will just bounce around at a
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fairly stable price for a while.
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Now, another great use
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for grid trading bots is risk management.
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Grid trading bots allow you to profit
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off of price movement without the risk
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of human error or bad luck,
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and it caps your downside risk.
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Grid trading bots run 24/7 and
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stick to strict parameters.
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So that means you don't have to worry about panic buying or
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selling or missing out on action because
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you're sleeping.
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In fact, one interesting way that a grid bot
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can be used for risk management is by
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trading stablecoin pairs like USDC and USDT,
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and profiting from little tiny price fluctuations.
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And while the profits here are very low,
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you also carry very low risk.
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Of course, unless USDT just goes ahead and explodes.
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Now, [Laughs]
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Now, something I came across when-
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when learning about the strategy,
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is that you need to make sure that you check the
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fees at the time of starting your bot.
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If your profits between each buy and sell are too small,
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too small, that the transaction fees cost
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more than how much you profit,
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then it doesn't make sense to run this bot.
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Now, Kucoin actually takes this fee into account
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when telling you your profits per grid,
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so you don't really have to worry about them,
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but some other platforms don't.
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So you'll want to look out for that.
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Now how to set up a Grid Bot?
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You'll want to go to the bot page and click Spot Grid.
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This will bring you to the bot specific leaderboard
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that I mentioned earlier,
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and then you can just click Create.
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Now here you have two options.
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You have AI parameters or customize.
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AI selects the price range for you based on the
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price history of that specific coin,
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then all you have to do is pick your investment
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investment and click Create the bot.
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Now, if you want to customize the bot yourself,
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I would recommend looking back
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in the price history as far as you plan on running the bot.
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So if you plan on running a Bitcoin grid trading bot
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for six months, then you want to look back six months
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and see the low and high price for that range,
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which is about $30,000 to $60,000
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And then you'd set your bot in that range.
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Or if you plan on running an Ethereum bot for two weeks, lets say.
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You could do something like $2,600 to $3,400
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for your range, because Ethereum
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has traded in that range for the last two weeks,
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and you're going out in additional two weeks.
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Now it's never going to be perfect, but you wanna trade within
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a feasible window.
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And typically the AI parameter does a
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good job as far as picking wider price ranges.
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But if you plan on running it for a short period of time,
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at a tighter price range, it's typically better to customize it yourself.
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And for the number of placed orders, this doesn't matter
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too much as long as you don't go too low.
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So if it gives you the option between 2 and 100,
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anything between about 50 and 100 is fine.
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Just definitely not 2.
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And like I mentioned, this is the bot that I dropped $10,000 into.
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I put $1,000 into ten coins,
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half of which I used the AI parameters and the other half
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my own customized parameters.
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Here's how much I've made over the first two days.
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So far, every bot is actually profiting,
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and I'm up $420.
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We'll check back later to see where I'm at after a full week.
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In the meantime, let's talk about the next bot.
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Smart Rebalance
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At some point we've all had a coin
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that we owned shoot up in price,
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doubling its weight in our portfolio,
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and we immediately start thinking,
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Should I take some profits?
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Is it going to correct soon?
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Maybe I should sell half and
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put it into my other coins that are still at a lower price.
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If this has crossed your mind,
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Boy, do I have a bot for you.
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The Smart Rebalance bot allows you to
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designate a percentage of your portfolio
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to a selection of cryptos
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and then automatically rebalances your portfolio.
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So it always stays at your strict parameters.
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So if you want your portfolio to always be 25% Bitcoin,
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you can use this and you don't have to think about it
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after you set it up.
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So when should you use this?
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There really isn't a right or wrong time to use it.
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It just comes down to your personal preference.
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If you're doing research day to day,
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and your opinion on certain coins
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change from time to time,
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or if you're constantly buying and selling,
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then this probably isn't the bot for you.
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This is really built for the type of person
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who has a handful of cryptos that they really believe in,
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and they just want to set it and forget it.
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Now, here's how you set it up.
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To set up the Smart Rebalance,
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go to the bot page and click Smart Rebalance,
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and then click Start.
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Here you'll find a bunch of portfolios
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that you can use as a template if you want.
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It even shows how many people are using each and every one.
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And this is a cool feature for checking out what other people are doing.
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But if you want to make your own, you'll click
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Customize in the top right,
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Here you can click to add coins and select which one
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you want in your portfolio.
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We're just going to pick ADA, Bitcoin, Link and Ethereum.
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Now you can choose a percentage of your portfolio
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each crypto will take up,
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and you'll see that it defaults
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to percentages determined by some AI programming.
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But at the top you can also click Equal weight
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if you want them all to be the exact same percentage,
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or you can Select Market Cap to weigh them by Market Cap,
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which is a nice feature,
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but something like Bitcoin overweighs the others by a bit too much.
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The AI version takes into account more factors,
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so it's more evenly distributed while
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still favoring larger coins.
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So if you really don't want to go ahead and decide
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percentages yourself,
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that AI option is a good choice,
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but if you want more control, you can click Advanced Settings
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and the first setting is the Rebalance method.
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It defaults to 1%, meaning that
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anytime one of your cryptos in your portfolio goes up more than 1%,
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it will redistribute the weight of your portfolio.
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But I think 1% is probably a bit low for crypto,
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so I usually stick around 2% or 3%
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and then the other two settings are a stoploss
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and take profits, which are just percentages that you
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can set either to sell everything
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if it drops too low or sell if you
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profit a certain amount.
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And these can actually be really useful to take out the
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psychology of either crypto pumps
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or corrections in the market.
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And then you just pick your investment amount
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and you click Create and you're all set.
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Now bot number three is Futures grid.
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Now what does it do?
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It's the exact same thing as the classic grid bot,
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but with futures.
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The difference is this gives you access to
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two additional tools.
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The first one is leverage.
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This is when you borrow money from Kucoin
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or whatever exchange you're using to increase
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your potential reward, but also your potential risk.
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This is very risky and a quick way to lose all your money
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if you don't absolutely know what you're doing.
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So don't mess with that unless you're already an expert.
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And second is shorting
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since you're grid trading futures
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and not actual crypto, you can actually short
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crypto with your bot.
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Now, the way that you profit when shorting with a bot
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is either with volatility or if the
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price decreases and you set this up
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the same exact way as the other spot trading bot.
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Now again, shorting is also extremely risky.
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So trade with caution.
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The fourth and final bot before we reveal our
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profits from that $10,000 bot bet,
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is the DCA bot,
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the Dollar-Cost Average bot.
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Now, this is very useful.
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It allows you to invest a large sum of money
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into a cryptocurrency over an extended
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period of time without lifting a finger.
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So instead of buying, let's say $1,000 of Bitcoin all at once,
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with the DCA bot, you can buy
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$100 of Bitcoin ten times over ten days,
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or maybe $10 in Bitcoin over 100 days.
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Now, when should you use this bot?
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As we all know, cryptos can be a little bit volatile,
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and anytime you're buying a large amount of one crypto,
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you run the risk of accidentally buying on a
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peak and having a very high average cost.
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By dollar-cost averaging, you spread out the amount of money
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and you remove the risk of accidentally buying on that peak.
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The only issue with dollar cost averaging
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is it can be an absolute pain
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to keep buying these small amounts and remembering,
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Hey, okay, I need to buy $100 of Bitcoin every single day at 9AM.
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And this is where the bot comes in because
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it does it all for you.
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So in order to set up this bot,
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you just go to Bots, you click DCA,
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then you click Create and you have three steps from here.
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First, you select the coin that you're buying.
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We'll just do Bitcoin.
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Then you customize your DCA.
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This is where you'll select how much
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you want to invest and how frequently.
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So if we're buying $1,000 in Bitcoin, we could just do
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$100 once per day
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and then we have our profit target.
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This is where things get a little bit weird.
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It gives the option to shut off the bot after a specific
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profit is reached.
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So you can either choose to have it shut off
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after a specific goal is met,
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or you can just leave it on continue
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and the bot will run until you manually turn it off.
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In our case, we'll just have to set a reminder in our phone
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ten days from now to shut off the bot.
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Or another way you can do this is by
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only keeping $1,000 in your trading account
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and it will just notify you when you run out of money.
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*One week later*
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The results are in.
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I have now been running bots on ten cryptos
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for an entire week,
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five of which I set my own parameters,
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five of which I used the AI parameters.
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The coins are a huge variety of market cap size,
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so hopefully this gives us a lot of data points.
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My one week profit came out to $545.25
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That's a 5.4% gain in one week.
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I'm actually surprised at this result.
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It's higher than I expected.
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So if we look at the daily profit here,
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we can see every single day was actually profitable,
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except for one day, I lost a little bit of money.
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And the first two days there, I made
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more money than the rest.
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And if we go to the individual profits per bot,
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we can see that none of the bots
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were actually negative, not a single bot
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lost money in the last week,
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and the profits here range from about
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$9 to $112 is the most profitable bot in that week.
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So that one was 11.26% profit.
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Extremely- I mean, I'm excited about this.
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Now, I did learn a couple of lessons here because I could have
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actually made more money.
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So knowing what I know now, I would have just used the
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bot parameters for literally everything.
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The issue is I was setting my price parameters
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too small and for a few of the cryptos,
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it just went outside of that parameter
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and then stopped trading where the
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AI parameters were much larger.
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So I would have made more money
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had I just kept it with AI.
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And a bot like this is really good
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at limiting the downside risk.
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But unfortunately, that also limits your
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upside potential.
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So in many cases, I would have actually made
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more money by just holding the coin outright
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instead of using a bot.
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Now, my biggest blunder here
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was Shiba.
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I set a bot on Shiba
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with my own parameter and then
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Elon went and tweeted about Shiba
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just the other day, during this experiment.
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The coin went crazy and went up 295%
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in the last seven days, literally since I bought it's up 295%.
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Meanwhile, my bot,
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this is painful
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Meanwhile my bot, made 0.93%
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less than 1% profit.
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I would have made $1,950
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in profit if I was just holding that crypto.
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Now why did this happen?
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It's because I set that trading parameter
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and the coin blew that parameter out of the water
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and stopped trading.
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So I got none of those gains.
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But as much as that sucks, I did have downside protection
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because if you use a bot and the price tanks,
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your bot will simply stop trading at a certain point
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and you'll lose less money than if you actually just
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held the coin instead of using the bot.
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So I made less money than I could have.
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But I also had less risk.
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And, you know, this happens.
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I can't complain about making $550 in seven days
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doing absolutely nothing.
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I didn't even check the app for five days, so
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I can't complain at all.
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So that's gonna do it for today.
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If you like to have access to even more of my content
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and my buy alerts that have made me more than
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$100,000 this year off crypto alone,
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join my Patreon linked below.
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I'd like to thank you so much for watching
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