How To Allocate Funds For Your Crypto Grid Bots

📄 Table of Contents

Cryptocurrency grid bots can automate trades on your behalf.

But they can’t make critical decisions for you, such as:

How much to invest?
How much profit to take?
Where to reinvest profits?
How to protect your capital?
How to profit in both bull and bear markets?

In this guide, I’ll walk you through all these key decisions.

You’ll also get access to a free grid bot template to help calculate these amounts. Plus, I’ll share some top platforms where you can reinvest profits for more passive income.

By the end, you’ll have a system to generate profits, reinvest, and grow your portfolio in any market conditions!

What does allocation mean?

Allocation is a percentage or a part of your funds that go into a specific asset or goal.

It’s a fancy way of saying “how you divide your money”. You’re choosing how much of your total money goes into different things.

Fund Allocations Graph

This helps you manage risk instead of putting everything in one place and hoping for the best.

Why Do You Need It?

By diversifying across assets and platforms to you will reduce the risk.

Some of your strategies might not give you the expected results. But it’s unlikely that all will fail at the same time!

In this case you will use different percentages to take out profits from the bots. You will also decide how much to invest in each bot.

If you were to reuse all the funds on one bot it would be hard to keep track of profits, losses and everything else. It would also defeat the purpose of diversifying your funds!

Investment Allocation

Having a significant amount of funds on one platform alone will increase risk. Not because of the platform itself but also because of the strategies you are using.

If you have enough to spread across platforms, then take a look at the following allocations.

Of your total portfolio or investment amount in the crypto market deploy:

Allocation	Percentage
Trading Bots	50%
HODL	30%
Reserve Fund	20%

Grid Bot Allocation

Put aside some funds on your exchange to a reserve instead of using every dime 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.

Rif Grid Bot Recovery

I recommend an 80/20 allocation where you put:

80% of your funds in one or more bots
20% as a reserve on the currency of the second ticker

Here’s how to calculate the Capital for each bot:

Total Budget x 0.20 = Reserve
Total Budget - Reserve = Trading Bot Capital
Trading Bot Capital/ Number of Bots = Capital For Each Bot

Assuming a total budget of $1000:

Reserve = 1000 x 0.20 = $200
Trading Bot Capital = 1000 - 200 = $800
Capital For Each Bot = 800/ 3 = $266

Allocate $266 per bot, assuming you open an average of 3 bots at a time.

This does not always take into account every single recovery system!

For example, if you want to use DCA the amount is going to double for the re-grid bot (2nd bot after loss) for that coin.

If you believe that a coin will bounce in a bull market Dollar Cost Averaging (DCA) can be more profitable.

Bot Profit Allocation

It’s essential to take profits from time to time, otherwise there would be no point in running the bots.

One could take profits:

After a fixed period of time
Using Allocations to take some profits

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 an interest bearing account.

Grid bots will feed the growth of your entire crypto portfolio.

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 ensures you are taking profits in bear and bull markets.

Passive Income Over Bot Profits

You can store your HOLD allocation in many different ways. By “HOLD” we mean, a part of your portfolio that’s invested for long term growth.

Nexo Savings Flexible Rates

Some will provide with extra benefits like interest, extra coins or automated growth:

CeFi Lending or Interest Accounts
DeFi Products
Staking strong projects
Margin lending on exchanges
Auto rebalancing or DCA bot
Grid bots for BTC or ETH for more than 1 year

Later you will take the 25% of your short-mid term bots and reinvest in this HOLD allocation. You will keep growing over time no matter what happens in the market!