Smart Rebalance Trading Bot: Diversify Your Crypto Portfolio Like a Pro

Smart Rebalance is a popular trading bot strategy that aims to keep your investments in balance. It can help you get more out of your assets, especially when diversifying your crypto portfolio.  

 

Crypto investors widely use the Smart Rebalance strategy to manage crypto assets and aid their risk management. This method involves the periodic buying and selling of crypto assets to maintain their predetermined alignment in the portfolio.  

 

Essentially, we restore the initial weightage of cryptos through this strategy. It lets you maintain your desired risk level, regardless of the crypto market conditions. 

 

Let’s explore the ins and outs of portfolio rebalancing, smart rebalance strategy, and how to use the KuCoin Smart Rebalance trading bot. 

 

Smart Rebalance offers two distinct rebalancing options: Threshold and Periodic. The former is based on a coin ratio, while the latter is based on time. The Smart Rebalance will automatically start the rebalancing process upon reaching the desired coin ratio.  

 

Threshold rebalancing means that your portfolio will rebalance when one of your cryptos goes up or down a certain percentage. You can set the coin ratio (threshold) between 1% and 5%. 

 

Threshold Rebalancing Example

 

If, as an example, the desired threshold ratio for the position is 3%, the portfolio will rebalance every time a cryptocurrency increases or decreases by 3%. 

 

On the other hand, periodic rebalancing works based on time intervals rather than percentage thresholds. You can set the interval to anywhere between 30 minutes and 28 days. 

 

Periodic Rebalancing Example

 

Suppose you have four equally valued crypto tokens - BTC, ETH, XRP, and KCS in a $1000 portfolio. If Bitcoin's value rises to 30% and Ethereum drops to 20%, rebalancing involves selling some Bitcoin to buy Ethereum, restoring the initial equal proportions.  

 

Note: You can add a maximum of 12 cryptocurrencies to your portfolio. 

 

Benefits of Using Smart Portfolio Rebalancing Strategy

The portfolio rebalancing trading strategy and the Smart Rebalance trading bot are beneficial if you want to diversify your holdings but do not have time to monitor day-to-day price movements. 

 

While the pre-set AI-managed rebalancing strategies are best suited for investor beginners, advanced users will have a great time setting up their own parameters and cryptos by fully customizing their Smart Rebalance trading bot. 

 

As its name suggests, the KuCoin Smart Rebalance bot effectively performs portfolio rebalancing activities for you. Its inbuilt advanced AI and machine learning capabilities offer you smart rebalance methods. 

 

Next, the Bot offers pre-set options (either by copying the pro traders or KuCoin pre-designed bots) and customized bots created according to your liking. 

 

You can let the bot allocate weights to your portfolio cryptos using AI parameters generated based on the token's historical price action, volatility, etc. You can access this bot for free on the KuCoin website and mobile app. 

You can follow the below process to create a Smart Rebalance bot on the KuCoin platform: 

 

Step 1: Log Into Your KuCoin Account and Select the Smart Rebalance Trading Bot 

Visit the KuCoin mobile app, and log in using your credentials. On the top banner, click the Trading Bot to open all trading bots KuCoin has to offer. 

 

You will see the Smart Rebalance bot in the upper left corner. Click on it to see many pre-designed Smart Rebalance bots carefully curated by KuCoin.  

 

 KuCoin Home and Trading Bot Page 

 

Every bot here is designed and created based on factors such as the token types, their category, yields generated over a certain period, etc.

 

As you can see, the rebalance of assets in these bots is based on AI parameters. The bot takes care of everything, and the only manual aspect here would be entering the total funds you want to invest.      

 

Pro Tip: KuCoin allows you to replicate profitable user profiles and apply them to your Smart Rebalance with a single click. This is especially beneficial if you are a novice crypto trader. 

 

Step 2: Explore the Smart Rebalance Trading Bot Interface 

You can scroll down to see the gains of experienced crypto traders. Click the Daily Profits or the 7-day Profits tab, depending on what you want to see.  

 

Select the strategy and click Next. You will now see the details of their smart rebalance activity. 

 

Click Create on the trading strategy which is the most attractive for you to add to your smart rebalance bot. Moreover, you can edit the strategy by adding or removing the offered coins. If you're satisfied with what you see, click Create again.  

 

You will also see Advanced Settings on the bottom — stick around to see how to configure them. 

 

How to Replicate Pro-Traders’ Performance 

 
 

Step 3: Learn More About the Selected Bot and Create It 

Let’s take an example of the popular GameFi Revolution KuCoin Smart Rebalance bot. As we see below, this bot suits aggressive traders interested in the GameFi token market. You can also see the percentage of profits/losses generated by this bot over 24 hours, a week, and a month. 

 

Click the Introduction button at the bottom to learn more about the bot.    

 

In the Introduction menu, you can see all the tokens this bot trades, their current prices, brief descriptions, and the price percentage change over time. Click Create Now to proceed.  

 

GameFi Revolution Smart Rebalance Bot By KuCoin 

 

Step 3: Enter Your Trading Bot Parameters  

As mentioned, the bot takes care of each token’s allocation in the portfolio based on various data points. Check the details and enter your preferred Total Investment. The minimum investment on KuCoin Smart Rebalance bots varies depending on the tokens chosen. 

 

Starting A Pre-Designed Smart Rebalance Bot On KuCoin 

 

Your funds must be in your Trading Account before transferring them to your bot. You can make internal transfers (main account to the trading account, for example) for free by clicking the swap button at the bottom.  

 

Complete the process by clicking Create. You can see all the details about this bot you created in the Trading Bot > Running section.  

 

Please follow till the end of this article to understand the editing and exit procedures of the Smart Rebalance bot you created.  

 

If you want to create your own Smart Rebalance bot with your preferred crypto tokens/coins and parameters, follow this procedure.  

 

Step 1: Log Into Your KuCoin Account 

Visit the KuCoin mobile app and log in to your account. From there, click on the Trading Bot and navigate to the Smart Rebalance page. 

 

Click the Customize button located on the top-right of the app next.

 

KuCoin Smart Rebalance Bot Home Page 

 

Step 2: View Tutorials and Click Add Coins  

On the top right, you can click the Tutorial button for a quick explanation of the basics of the Smart Rebalance bot. Click Next for an introduction to the concept of Smart Rebalancing.  

 

Click the Add Coins button to select your preferred cryptos for the bot to trade and rebalance over time. You will be presented with the list of available coins.  

  

Process of Creating A Customized Smart Rebalance Bot 

 

Step 3: Enter Your Total Investment  

Select the tokens and enter your Total Investment. The minimum investment varies based on the tokens selected and their corresponding prices. Use the swap button to instantly transfer funds from your main account to your trading account. 

 

Process To Create A Customized Smart Rebalance Bot 

 

Once done, click the Advanced Settings button at the bottom, which we will tackle in our next step. Note that this step is optional.

 

Step 4: Customize Your Smart Rebalance Bot With Advanced Settings 

The KuCoin Smart Rebalance bot enables you to set special advanced settings to customize your bot’s operations further. 

 

 Advanced Settings Options 

 

1. Auto-Rebalance: You can choose how and when the bot must rebalance your assets by Coin Ratio or Time. For example, if you choose by 3% Coin Ratio, the bot automatically rebalances the portfolio once the total profit hits the 3% mark.  Similarly, let's say you choose to rebalance by time and pick 1 hour. The bot will automatically rebalance the assets in the portfolio every hour, irrespective of the market condition.    

2. Entry Price: You can set the entry price for every cryptocurrency in your portfolio, meaning the bot will buy the assets at the limit price you preset. 

3. Stop Loss & Take Profit: You can perform proven risk management principles on the Smart Balancing bot by specifying the price at which you want to exit your crypto position. When the loss ratio reaches the preset amount, the bot will auto-sell your assets to avoid further losses. Like Stop Loss, you can also configure a Take Profit order to the bot. This helps you in locking your profits once a profit target is reached.

 

Step 5: Assign Weightage to Tokens in Your Portfolio 

Finally, let's get to the most important part: rebalancing parameters. So, how do you provide weightage to each of the tokens in your portfolio? You can do that by three different methods, AI Balance, Equal, and By Market Cap.  

 

• AI Balance allows the bot to determine allocations based on factors like volatility and historical price.  

• Equal method divides the investment equally among chosen tokens. For example, five tokens would each receive 20% weight. 

• By Market Cap is recommended for beginners, as a token's strength and reliability often correlate with its market cap.    

 

Different Ways to Assign Weights to Cryptos in Your Portfolio 

 

Step 8: Create and Confirm Your Smart Rebalance Trading Bot 

Once you choose your preferred type of weightage, click Create. You will see the right-side screenshot given below. Check all the details, and click Confirm to complete the bot creation process. 

  

Final Confirmation Step 

 

Adding Additional Funds to the Existing Setup 

Once you have created the bot, visit the Trading Bot section and click the Running option to see the bots currently running on your account. You can see all the price details here, including the bot's real-time profit/loss.  

 

Click the Expand button at the bottom to see more options.  

 

To add funds to the bot, click the Add Investment button (+). Using the Coin Deposit feature, you can make direct USDT deposits or even deposit the tokens you selected in the bot.  

 

Click Confirm to complete the procedure.  

 

Increase Your Smart Rebalance Bot Investment  

 

Adding More Tokens to the Existing Smart Rebalance Strategy  

After creating the bot, if you want to add more tokens to your customized list, you can still do that by clicking the Edit Icon > Add Coins. You can also remove the existing cryptos by clicking the X mark at the right corner adjacent to all the cryptos.    

 

Adding or Removing Cryptos From The Smart Rebalance Bot

 

Data Dashboard for an Overall View  

Click the Note icon at the bottom right to get a clear view of the bot's performance over time. You can visit the Parameters section to make further changes according to your preference.    

 

Smart Rebalance Dashboard 

 

Over time, you can use this data to make more informed decisions on creating a more effective Smart Rebalance bot.  

 

If you wish to close the bot, go to the Running  section and click the Switch icon on the top right. As shown in the below screenshot, you can see the available funds that will be transferred to your trading account.  

 

You can choose between two different options: 

 

1. Return the individual coins (your customized list of cryptos selected to make the bot) to your Trading Account. 
2. Return USDT to your Trading Account. As always, tokens will be converted to USDT at the best market price and transferred to your KuCoin Trading Account.      

 

Process To Quit The Running Smart Rebalance Bot 

For advanced traders, KuCoin offers an even more comprehensive visual representation of their trading bot — KuCoin’s Smart Rebalancing Bot Pro version on PC allows you to view all your grids via a TradingView chart.  

  

For long-term investors, KuCoin allows them to observe their investment performance rather than engage in active trading. A Smart Rebalance trading strategy will enable them to cash out of their winning trades and reinvest the winnings into better-priced assets. 

 

On the bottom, you will see your running bots, their performance, and their rebalancing schedule. 

  

KuCoin’s Smart Rebalancing Bot Pro 

  

So, what are you waiting for? Download the KuCoin app, create a Smart Rebalance bot, and join the KuCoin Smart Rebalance bot team.

 

We hope you found this guide helpful and informative. If you need any additional help related to trading bots, please visit the KuCoin help center or contact our support team using the live chat feature at the bottom of the home page.    

 

Keep reading KuCoin Learn to learn more about KuCoin products, trading & investing, or crypto & blockchain in general.  

 

1. Who Is Smart Rebalance Bot For? 

Smart Rebalancing Bots that KuCoin offers are among the most straightforward and user-friendly options.  

 

HODLers looking to increase their portfolio percentage can take advantage of the benefits of this strategy. At the same time, newcomers to the crypto world may find it beneficial due to the low risk associated with it.  

 

This strategy is designed to maximize total assets while keeping the portfolio percentage essentially unchanged and is typically employed by long-term investors. 

 

2. When Should I Use the Smart Rebalance Bot? 

Unlike the Spot Grid Bot which is fit for ranging market conditions, or an Infinity Grid bot that is suitable for markets in an uptrend, Smart Rebalance trading bot is useful in both bull and bear markets, as it can help you capitalize on price increases by cashing in quickly and price drops by buying the dip. 

 

This trading bot strategy is best suited for long-term holders that want a relatively low-risk profile investment. 

 

3. Is Smart Rebalance Bot safe to use? 

Every profit you make is safe with us. KuCoin has implemented several measures to guarantee the security of our platform, including the implementation of 2FA (two-factor authentication) for all KuCoin user accounts, the implementation of cold storage for the majority of KuCoin funds, and regular security audits.