How to earn if you can’t trade: a guide to KuCoin trading bots

A bot, or trading robot, is a program for automated trading on an exchange. Over the last decade, such programs have traded 50% of the volume of the American stock market.

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Bots outperform human traders on three counts: they do not experience emotions, do not deviate from their trading plan, and do not sleep. Because of this, even simple robots earn more on the market than many people.

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We cover one of the simplest ways to profit from automated trading—the KuCoin exchange trading bot.

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KuCoin Trading Bots

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KuCoin is a cryptocurrency exchange that supports spot, margin, and futures trading. It offers 440 cryptocurrencies in 830 trading pairs.

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KuCoin users can trade using four bots: DCA, Smart Rebalance, Spot Grid, and Futures Grid. The bots operate on all spot and futures market pairs:

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• DCA and Smart Rebalance buy cryptocurrency during uptrends and close positions upon reaching trading targets. They can be used to buy an asset advantageously or assemble a balanced portfolio.
• Spot Grid and Futures Grid sell during uptrends and buy on dips. They earn in ranges when the asset price regularly bounces off support and resistance levels.

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The minimum deposit depends on the bot, trading pair, and settings. For example, to start Spot Grid on XMR/USDT with manual settings you need 40 USDT, and to start DCA on any pair — from 1 USDT. To start Grid bots with automatic settings, on average about 200 USDT.

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Spot Grid can be configured and launched in a browser, while the other bots are available only in the mobile app of KuCoin.

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Two-factor authentication is required to start the bots. Completing KYC is not mandatory: it is needed only for withdrawals of up to 5 BTC a day.

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DCA Bot for Averaging the Purchase Price

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The DCA (dollar-cost averaging) strategy involves building a position gradually. The user sets the interval and purchase amount, transfers funds to the bot, and it buys the asset.

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Launching the DCA bot:

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1. Transfer funds to the trading balance.
2. Choose the cryptocurrency to purchase.
3. Set the amount, the regular investment interval, and the date of the first purchase.
4. Specify the trading goal and the bot’s actions when it is reached: continue buying or close the position.

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Example: Alice buys 1 LTC for $180. After a month the price of Litecoin falls to $120, and after another three months rises to $200. Alice’s profit is $20.

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Meanwhile, Bob configures the DCA bot to buy 0.1 LTC every week. After three months, the bot buys 1 LTC at an average price of $150. Bob’s profit is $50.

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Smart Rebalance for Portfolio Management

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Sometimes a crypto-market rally begins with a sharp rise in a single coin. For example, Bitcoin’s price climbs 10% and hits a resistance level, and a few hours later the other cryptocurrencies rise as well. In such a situation, profits can be increased by selling part of Bitcoin and buying other coins.

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The Smart Rebalance bot uses this principle to manage an investment portfolio. The user sets the portfolio allocations and rebalancing conditions: on changes to allocations or on a timer.

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Launching the Smart Rebalance bot:

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1. Choose one of the ready-made portfolios or click the Customize button to create a new one.
2. Add cryptocurrencies to the portfolio and set the proportions.
3. Enter the amount you want to pass to the bot.

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Example: a trader configures the Smart Rebalance bot with a portfolio of 50% BTC, 40% ETH, 10% DOGE and a rebalance threshold of 5%. After a week, Bitcoin rises and the asset mix shifts to 56% BTC, 32% ETH and 12% DOGE.

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The bot sells Bitcoin and buys Ethereum to bring the portfolio back to 50% BTC, 40% ETH, and 10% DOGE. The next day Ethereum and DOGE rise following Bitcoin, and the trader gains additional profit from buying ETH.

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Bots for Earning from Volatility

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Grid Trading, or grid trading, is a strategy for trading in a volatile market without a clear trend. The trader places pending buy and sell orders. When the asset price fluctuates strongly, the orders execute and the trader earns a profit.

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Spot Grid and Futures Grid bots on KuCoin automatically create a grid of dozens of orders based on the asset’s historical data. Experienced traders can specify the price range for trading.

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Spot Grid operates on spot pairs without leverage, while Futures Grid trades futures contracts with leverage.

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Example: a trader launches a Spot Grid bot on the XRPUSD pair. The bot buys a small amount of XRP, then places several pending buy and sell orders for XRP at different prices:

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• SELL at $1.6;
• SELL at $1.4;
• BUY at $1.1;
• BUY at $1.0.

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The price of XRP falls to $0.9 and then rises to $1.7. The bot closes the position with a profit and places a new grid of orders.

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Spot Grid

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Spot Grid buys cryptocurrency on pullbacks and sells during uptrends. The trader can set a stop-loss to automatically shut down the bot in a bear trend.

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Setting up Spot Grid:

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1. Choose the cryptocurrency to trade.
2. Use the automatic parameters or go to the Customize tab to set the trading range and the number of orders in the grid.
3. Transfer funds to the bot for trading.

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Futures Grid

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The Futures Grid bot can profit from rising or falling asset prices. When creating a bot, the investor selects the trading direction:

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• Long — the bot buys contracts on a pullback and closes positions during price rises;
• Short — the bot sells contracts during rallies and closes positions during declines.

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Setting up Futures Grid:

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1. Choose the trading pair.
2. Use the automatic parameters or go to the Customize tab to set the trading range, the number of orders, and the leverage size.
3. Choose the direction: Short to profit from a decline, Long to profit from a rise.
4. Transfer funds to the bot for trading.

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How much do Spot Grid and Futures Grid bots earn?

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The KuCoin app shows the leaderboards for bot results. According to these data, Grid bots yield up to 25,000% APR or 68% of the deposit per day.

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Testing KuCoin Bots

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We decided to test how much income trading with KuCoin bots would generate in a single day.

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DCA and Smart Rebalance will show results in a few weeks, so we started Grid bots on random trading pairs:

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• Spot Grid: WILD/USDT with a 42 USDT deposit;
• Futures Grid: Long for SHIBPERP/USDT with a 50 USDT deposit.

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In 24 hours, Futures Grid made 42 trades and lost $0.07. Spot Grid performed better, with 67 trades earning $3.13. Its APR was 1330% or 7% of the deposit per day.

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Conclusions

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Modern trading bots operate on the \”buy low, sell high\” principle. They earn because they trade without emotions and do not miss opportunities to enter the market.

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KuCoin offers bots for every market condition:

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• DCA for gradual position-building during crypto-winter;
• Smart Rebalance for portfolio management during a bull run;
• Spot Grid and Futures Grid for earning on volatile assets.

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Remember that no trading strategy guarantees profit. Do not invest more than you can afford to lose.

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