How To Allocate Funds For Your Crypto Grid Bot
What does allocation mean? Allocation is a percentage or a part of your funds that go into a specific asset or goal.
Why you need it? By diversifying across assets and using other platforms to you will reduce the risk. In this case we use different percentages to take out profits from the bot. If you were to reuse all the funds on the bot it would be hard to keep track of profits, losses, and everything between.
Investment Allocation Having a significant amount of funds on one platform alone will increase risk. If you have enough so to spread across platforms, then look at the following allocations. Of your total portfolio or investment amount in the crypto market deploy: 50% for Trading Bots 30% on HODL 20% for a Reserve or Safety Fund
Grid Bot Allocation
Consider putting aside some funds on your exchange to a reserve instead of using everything for your bots. This will help if there’s a price drop, where you will be able to buy more of the same coin and make more profits on the way up. Not only recovering but making extra profits from volatility and price increases. I recommend an 80/20 allocation where you put 80% of your funds in one or more bots (depending on how much budget you have available). And 20% as a reserve on the currency of the second ticker you are trading to avoid extra steps… For example, in USDT or BTC.
Bot Profits Allocation It’s essential to take profits from time to time, otherwise there would be a point in running the bots. One could take profits at the end of a year let’s say, or after a certain period. Or you can again use allocations to take some profits out and accelerated you other investments. That way you are bringing funds from a higher risk source of income to a lower risk one, From your grid bots to a long-term portfolio or a interest bearing account. But at the same time… you don’t need to withdraw all your funds all at once. Keeping some will make the bot earn more overtime, as you can increase the investment amount per bot. So, take out 10-25% of the profits made from each profitable grid bot closed! This is easy to keep up even when re-griding and makes sure you are taking profits in bear and bull markets!
Passive Income Over Bot Profits Now what should you do it that 25% part of the profits? Well, you can send them to: CeFi Lending on Interest Accounts like Nexo and receive interest over your crypto DeFi Products (lending, yield, and liquidity farming) Stake strong projects Margin lending on exchanges Grow an automated portfolio with Shrimpy Run grid bots for BTC or ETH for 1 Year + I have mentioned some of them on the video “Earn Passive Income with Crypto” which you can check out by click on the card at the top of this video.