Use this bot to automatically build a diverse portfolio by selecting desired assets and setting their respective allocations. Portfolio will be rebalanced at the defined interval when assets gain or drop in value by given threshold. This bot can also be used to quickly liquidate multiple assets into a single asset (eg. BTC).
What is rebalancing?
Rebalancing is the process of realigning the weightings of a portfolio of assets. It involves periodically buying or selling assets in a portfolio to maintain an original or desired level of asset allocation or risk. Rebalancing gives investors the opportunity to sell high and buy low, taking the gains from high-performing investments and reinvesting them in areas that have not yet experienced such notable growth.
For example, say an original target asset allocation was 50% BTC and 50% USD. If BTC performed well during the time period, it could have increased in value such that it now accounts for 70% of the overall value. The investor may decide to sell some BTC to get the portfolio back to the original target allocation of 50/50 - taking profits in the process. If BTC then drops in value bringing its weighting down to 40%, excess USD can now be used to buy back BTC and "rebalance" the portfolio back to 50/50 target.
How to configure the Portfolio Rebalancer
Market Currency: the market (quote) currency used to buy/sell against.
For example: if USDT is selected, you will be able to add assets that are tradable against USDT only (BTC/USDT - ETH/USDT - DOGE/USDT - x/USDT - etc.)
Current Allocations: This is the current distribution of your assets within the selected account. Only tradable assets are shown (per exchange minimum trading requirement). Assets not directly tradable against the selected quote currency (USDT in BTC/USDT) are excluded.
Target Allocations: this is the targeted distribution of your assets within the selected account once the bot is live. You can adjust it by moving the sliders and/or add more assets to it.
Rebalance Interval: how often to rebalance this portfolio. This can be (only once, hourly, daily, weekly, monthly)
Rebalance Threshold: This value indicates the percent deviation from the target required to trigger rebalancing. For example, if an asset accounts for 10% of your portfolio, and at the next rebalancing interval it has grown in value and now accounts for 12% of your portfolio, this represents a 20% deviation. (2/10).
How many assets can I add to a portfolio?
There is no limit to the number of assets that can be used to construct a portfolio. However, please be aware that if too many assets are added and the individual value of each asset is below minimum tradable size, the bot will not be able to place required orders to rebalance at defined intervals. The minimum trade size at Binance, for example, is approximately $10 USD. At least 2 assets are required for this strategy.
Can I create multiple portfolios within the same account?
No, this bot currently manages the entire account. If you wish to create multiple portfolios, consider creating multiple exchange accounts (Binance supports subaccounts).
Can I use this bot to rebalance only once?
Yes, simply select "Only Once" as the Rebalance Interval. The bot will adjust your portfolio to your defined target allocations and stop automatically. This is useful for one-off rebalancing, or if you want to quickly sell a number of assets for BTC or fiat, or even another asset. Simply add the asset you want to allocate all the funds into, and slide the target to 100% as shown below:
What is Rebalance Threshold?
This value indicates the percent deviation from the target required to trigger rebalancing. For example, if an asset accounts for 10% of your portfolio, and at the next rebalancing interval it has grown in value such that it now accounts for 12%, this represents a 20% deviation (2/10). This threshold is considered at each rebalancing interval. If an asset has not deviated from the target by at least the defined threshold, it will not be rebalanced.
Can I use other bots along with Portfolio Rebalancer?
If you're using periodic rebalancing at a set interval, it is recommended that you turn off all other bots as any changes in allocations will trigger a rebalance which will interfere with the performance of other bots.
I have assets that are not showing up in the "Current Allocations"
Assets used for rebalancing must meet the following criteria:
It must be an active (not delisted) asset
Its value must be above the minimum trade size allowed by the exchange
If there are open orders for an asset, only available (free) balance is considered
It must be tradable against the selected "market" currency. For example, if you select USDT as the Market Currency, and want to add XYZ to the portfolio, but it is only listed in the BTC market, then XYZ cannot be included in the portfolio. Typically, most assets are listed in the BTC market.
Can this bot be backtested?
Backtesting is not currently available for this bot. There are challenges around the length and quality of historical data available, particularly for newly listed assets that make it difficult to conduct accurate backtests. The good news is that we will be adding this functionality in the future versions of this bot.