Kucoin trading bots are automated cryptocurrency trading software strategies that any Kucoin exchange user can use free of charge. These crypto trading softwares are driven by ai or user based parameters and available to anyone with a Kucoin acocunt.
Trading cryptocurrency is a risky activity, and the idea of automating your trades still holds risk. However, the idea behind using a bot strategy is to minimize risk and remove the human emotion that comes along with trading cryptocurrencies. It also allows users to trade 24/7.
This article will give you an overview of how to set up and use the different types of Kucoin Trading Bots and give you some tips to maximize profitability and efficiency. Again, all crypto trading and bot trading carries risk and none of this is financial advice.
That being said, let’s dive into the tips for getting started using Kucoin Trading Bots.
What is Kucoin?
Kucoin is known as “The People’s exchange” with over 10 million users and 800 Billion in trading volume. The company claims that 1 out of 4 crypto holders uses Kucoin.
Over 700 crypto pairs are available on Kucoin, and some coins such like BLOCK and DAO even launched through Kucoin. Kucoin offers spot trading, margin trading, p2p fiat trading and crypto derivitives.
Kucoin is a custodial crypto exchange that is available in over 200 countries.
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Does Kucoin Require KYC?
If depositing in crypto, Kucoin does not require KYC, but will limit a users withdraws to external wallets to 1 BTC per 24 hour period. So while unverified users are allowed on the Kucoin exchange, formal verification is highly recommended and increases your trading options using the crypto platform.
Kucoin Trading Bots
Kucoin is an incredibly popular crypto exchange that gives users access to the following free crypto trading bots: Spot Grid, Futures Grid, Smart Rebalance, DCA (Dollar Cost Average), & Infinity Grid.
The bots are beginner friendly and have AI assisted strategy recommendations. Beyond that, users can set their own parameters and use these crypto trading bots from Day 1 on the Kucoin exchange.
Ease of use
- Free to use
- Easy to set up
- Ability to go short or long
- Ability to make money in a sideways market
- Limited to the Kucoin exchange only
- Not an extremely advanced set of customization tools
What is a Crypto Trading Bot?
A crypto trading bot is a piece of software that executes trades for a user automatically based on a set of rules or parameters. These rules can be established by the user, by an artificial intelligence or users can even “copy trade” popular bot strategies created by other users.
The idea behind crypto bot trading is that it enables users to make trading moves 24/7, based on a set of parameters. Using software to automate trading takes out a lot of human emotion and risk that can often hurt crypto traders in times of extreme stress.
Crypto trading bots have the ability to make a user passive income on their trades. However, when automating your crypto trading your strategies are still susceptible to market risk and price fluctuations not in your favor.
What Crypto Trading Bots does Kucoin Offer?
Kucoin currently offers the following trading bots to every Kucoin user free of charge:
- Spot Grid
- Futures Grid
- Smart Rebalance
- DCA (Dollar Cost Average)
- Infinity Grid
This post covers each type of bot and how to use it. First, let’s cover some basics.
How To Start Using Kucoin Trading Accounts
- Create a Kucoin Account
- Deposit funds into your account. This can be done with apple pay, credit/debit, bank account or Crypto.
- Funds are first deposited into your “main account.” You must then move them into your trading account. There is a “transfer button” on the assets overview page that enables this free internal transfer.
- Click on trade and choose “Crypto Trading Bots”
- Choose your bot
- Set the parameters and set the bot live (more on parameter setting later)
Now, let’s get into the different type of trading bots offered by Kucoin. We’ll also cover some tips when it comes to setting up your parameters.
What is the Kucoin DCA bot?
The Kucoin Dollar Cost Averaging (DCA) bot is a method for buying a specified asset at regular time intervals. The idea behind DCA is that you don’t have to time the market and so therefore will not “go all in” at the wrong time. Rather you believe that it is time in the market rather than timing the market. So the DCA bot breaks up your purchase over a time interval to reduce volatility and give you an “average buy in” cost across that time spread.
DCA strategy is the simplest to use and understand. However, use dollar cost average if you believe in an asset over the long term and want to get a fair average buy in price for your crypto assets.
Setting up a DCA Bot
Setting up any bot with Kucoin is simple, paticularly the DCA BOT.
The first step to setting up your DCA bot is having USDT in your trading account. The next step is choosing your coin pairing along with USDT. This is the coin you want to slowly buy into over time. Let’s say it’s BTC.
From there, you pick the time intervals, when to start, and the amount per investment. You can also pick a maximum investment size – the DCA bot turns off once you reach a certain threshold. Another option is to set a profit target. If you set a profit target the DCA bot can notify you once your investment has earned a particular profit % and either continue or automatically turn off.
DCA Crypto Bot Tips
A DCA bot is easy to set up and there isn’t much in terms of a strategy. You can set your time intervals to be anywhere from 1 hour to two weeks.
The main advantage of using a DCA bot is simplicity. You will earn a profit if the price of the target asset trends upward. You will not have to worry about ‘timing the market just right to buy in’ but rather receive an average price.
The cons to a DCA bot are that it takes patience. Also, you may miss out on big gains, as you didn’t put in as much, before/if the price of the underlying asset rises significantly.
Of course, the price of the asset can also trend downward. This is ok, as you will buy in for cheaper. However, if the price of the asset doesn’t go back up – you of course still lose money.
What is the Kucoin Spot Grid Bot?
A spot grid trading bot is the most popular bot that a Kucoin user can use to automate their trades. A spot grid bot profits off of volatility in the market and generally upward price movement.
Grid bots are profitable when the market is trading sideways or going up.
Essentially, the grid bot automatically buys low and sells high whenever it hits a certain “grid price point” within a given price range for a particular crypto currency. Your buy size is split up in increments based on the amount you want to invest and the # of grid points you have within your range.
Traders can set up their bot by manually entering parameters, allowing an AI automation, or copying the strategies of high performing bots built by other traders.
Spot Grid Bot Tips
There are a few things to keep in mind when setting the parameters of your spot trading crypto bot on Kucoin.
Spot Trading Bots Lose in Down Markets
Similar to the DCA bot, the first rule with a spot grid bot is that you should only use it if you feel the price of the underlying currency will go up in value. Buying and selling on the spot market does not enable “shorting” so if the price of the asset falls significantly during the time frame you are trading, your position will also fall.
Set a high enough, but not too high take profit grid
The second tip for setting up a Spot Grid Bot is that you need your take profit grid to be large enough to cover trading fees, but also small enough that your bot trades frequently enough to earn during the volatility.
We have found a good starting point for the Kucoin Spot Grid Bot to be between .5%-1% take profit range. This profit range is large enough that you will earn significantly more than the trading fees on your profit, but also small enough that your bot will execute multiple sell and buy orders based on market movements.
Note: this % range is just a starting point – it is up to you the trader to find the optimal take profit % for your goals
Your grid crypto trading bot will stop working if price moves outside your range
If you set two narrow of a range and the price moves above or below your range your bot will stop working. This is particularly bad if the price moves up too far as you will miss out on the extra gains.
To recap the last two points: You want to set the grid lines (take profit) big enough to cover trading fees but small enough that you get frequent trades. You want to set the range in which grid lines are set (buy and sell orders) to be large enough that your bot doesn’t stop working, but also something that you are comfortable with when it comes to large price movements.
What is The Kucoin Futures Grid Bot?
The Kucoin Futures Grid bot is a bot that sets buy and sell orders across a range of prices on crypto perpetuals. It functions similar to the Kucoin Spot Grid bot only that it trades futures. Trading in the futures market allows users to go short (profiting off a down market) and to leverage their trades (increasing the risk/reward exposure).
Futures often have lower fees as well.
Again, the concept behind the futures Grid Bot and Spot Grid bot is the same. You have a take profit setting (grid lines) and a range (max-min price) at which those grid lines are set. Since you can go short in the futures market, it is possible to profit off of a down market.
Kucoin Futures Grid Bot Tips
Similar tips and strategies to the spot grid bot apply to the future grid bot.
Some additional things to note though are:
A user must choose to go long or short with their bot. A long bot makes money from volatility and a price movement that generally trends up while trading. A short bot makes money from volatility and a price movement that generally trends down while active.
Another thing to note is that the futures bot can use leverage. Leverage exposes you to greater movements in the underlying cyrpto asset. This is good as it can (leverageX) your gains, but it also multiplies your losses and puts you at risk of liquidation and a total loss of funds if the market moves against you.
What is the Kucoin Infinity Bot Grid?
The Kucoin Infinity Bot Grid is designed to automate the “buy low, sell high” trades without an upper range bound. This prevents a trader from missing out on a massive pump in the underlying crypto currency.
The infinity grid bot is similar to the spot grid bot, only it doesn’t have an upper limit to it’s range. The take profit (grid lines) have a minimum price range but no maximum price range. The bot will continue buying and selling the underlying crypto at intervals no matter how high it goes.
Kucoin Infinity Bot Tips
The Kucoin infinity bot functions much like the spot grid bot. However, there is no upper range price limit. This is great for capturing gains but it will also continue to execute buy (& sell) orders on the underlying asset no matter its new price. That means that you could be buying an asset at its peak price when it is way over valued. So it is something to monitor.
Conclusion: Kucoin Trading Bots
Kucoin is a major exchange with a large user base and liquid order books. They offer free automated crypto trading bots that anyone on the platform can use. Crypto trading bots are a great way to earn money off of volatility and even minimize your downside risk.
Crypto trading bots also minimize human emotion and save the trader a bunch of time. That said, crypto trading is a highly risky activity. Always do your own research, smart small, and only risk what you are willing to lose.
Thanks for reading and best of luck trading!
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