How Does the Kraken Trading Bot Work?
The Kraken Trading Bots are used to automate your trades on the Kraken exchange. Using the Bitsgap trading interface, you can set up three types of trading bots for Kraken — DCA, GRID, and BTD. Those bots will work on your behalf and follow a set of predetermined rules that are programmed to yield specific results. For instance, Bitsgap’s GRID bot implements the popular grid trading strategy.
This method involves setting up pending buy and sell limit orders at specified price intervals, thus forming a grid across your selected price range. As market prices vary, the bot executes sales at higher prices and purchases at lower prices, capitalizing on market volatility. Bitsgap’s BTD bot is designed to maximize “buy the dip” opportunities during market downtrends, an effective strategy for such conditions. It automatically purchases more of the base currency as prices drop, helping to average down the buying price and setting the stage for potential gains on rebounds.
Additionally, Bitsgap’s DCA bot specializes in dollar-cost averaging, a strategy that involves dividing investments into regular, smaller trades to obtain a more favorable average entry price. This technique dampens the effects of market volatility. The bot not only performs regular trades but also adjusts the size of these trades based on current market conditions to safeguard your entries.