The Smartest Kraken Trading Bot
HodlBot is a customizable trading bot that allows users to index the market, create custom portfolios, and automatically rebalance their cryptocurrency portfolios.
As of April 2019, HodlBot is now available for Kraken investors.
Here’s what it can do:
Automatically Diversify Your Portfolio Across an Index
A cryptocurrency index is a portfolio designed to track the performance of the entire cryptocurrency market. Indices are some of the most diversified portfolios you can invest in. And as such, they typically beat 80% of all active investors in the long-run.
With HodlBot, the Kraken 10 index comes out of the box. When you select the Kraken 10, HodlBot will automatically execute the trades required to assets in your Kraken account to match the target portfolio.
If there any coins you don’t like, you can add them to the blacklist and HodlBot will replace it with the next highest coin by market cap.
Create Your Own Index
Additionally, you can create your own index by selecting the range of coins you would like to include e.g. ranks #1–20.
HodlBot also allows you to specify the weighting strategy, min & max percentage caps. You can read more about this feature.
Create your own portfolio
While indices are great for overall diversification, some investors may prefer to build their own custom portfolio.
HodlBot’s create your own portfolio feature allows you to explicitly define what coins you would like to include in your portfolio, and what their weights are.
When you’ve settled a composition that you like, you can calculate a historical backtest to see how your strategy would have fared in the past.
After you save a portfolio, you’ll be able to switch between any of the other portfolios you’ve created with a single click.
Automatically Rebalance Your Portfolio
After the initial trades are completed, your portfolio will look very similar to the target (minus rounding errors due to exchange minimum trading limits).
But over time, left to its own devices, the portfolio will slowly drift away from the target due to price changes in the market.
That’s where portfolio rebalancing comes in. Portfolio rebalancing is the practice of resetting your portfolio to its original target allocation.
We’ll make the buy & sells required to get you back to your target. The default rebalancing period is 28 days, but you can customize this period to your liking.
A rebalanced portfolio can sometimes outperform a drifting portfolio. The excess return generated by portfolio rebalancing is known as the rebalancing bonus. We wrote a study identifying the conditions that favour portfolio rebalancing.
Portfolio rebalancing is not without its cons. If you rebalance too frequently, you can significantly increase trading costs and portfolio turnover. It can also lead to catastrophe if a certain coin tumbles to zero unchecked.
**Liquidate Your portfolio **
There is no obligation to stay with HodlBot. You can liquidate your portfolio anytime you want. This is one of the main benefits of holding the underlying assets yourself.
To do so, you can use the cash out feature to convert a % of your portfolio into any coin.
How Do I Get Started with HodlBot on Kraken?
HodlBot Connects to Your Crypto Exchange account via the API.
We use the exchange API to programmatically execute trades. We do not have account withdrawal permission and all user data is encrypted (HMAC SHA-256).
In order to connect to your exchange account, we’ll need permissions to do so. That’s why we need API keys setup.
We wrote this tutorial on how to set up your Kraken account with HodlBot. You can read about it here.
How Much Does HodlBot Cost?
We made HodlBot free for users under $500. For users over $500, there’s a 7-day free trial.
About the Author
I quit my job recently to start HodlBot.
We created HODL10, HODL20, HODL30 indices and the first ever application that allows you to create your own personalized cryptocurrency index fund. You can also create other kinds of custom portfolios.
To get started all you need is a
- Cryptocurrency Exchange Account
- $200 in any cryptocurrency