I Gave An AI Trading Bot $10,000 To Trade Crypto
Description
I Gave An AI Trading Bot $3,000 To Trade Crypto - the results are SHOCKING! We look at different algorithmic trading bots that execute different strategies depending on trading signals and market con...
AI Analysis
This video dives deep into the experience of using an AI trading bot to trade crypto, specifically on the LiveCopier platform with a Bybit exchange integration. Over 60 days, $10,000 invested through these bots generated a profit of $1,224, leading to the decision to double down on the investment. The core message emphasizes diligent risk management, understanding bot strategies, and meticulous account setup for successful algorithmic trading.
Here's a breakdown of the experience and key takeaways:
* Initial Bot Performance & Expectations:
* After 60 days, the AI trading bot delivered a $1,224 profit on a $10,000 investment. This positive result led to doubling the capital allocated to the bots.
* It’s important to understand that bots don't always win. The initial investment of $1,000 saw a small losing streak of about $10, demonstrating that losses are part of the process.
* Profitability isn't linear; there are ups and downs, but the cumulative profit shows an upward trend.
* The bots generally perform well when markets are trending (moving up or down), but tend to "bleed out" slowly during sideways, choppy market conditions.
* Diverse Bot Strategies and Their Outcomes:
* Instead of one bot, multiple bots (five in this case) are run simultaneously, each with a different trading strategy.
* Each bot interprets market signals differently, leading to varied outcomes. For instance, one bot (ICMC004) lost $53, while another (AI bot ARS003) made a remarkable $1,000 profit on a $2,000 initial allocation in 60 days, effectively 1.5x-ing its capital.
* Sometimes, bots with different strategies will even take opposing positions (e.g., one longing while another is shorting) based on their distinct interpretations of the market.
* The ability to track individual bot performance allows for dynamic capital allocation, meaning you can add more funds to better-performing bots or remove funds from underperforming ones.
* Crucial Risk Management with Bybit Sub-accounts:
* A critical aspect of managing risk is running each bot on a separate Bybit sub-account.
* This setup serves two main purposes: first, it prevents trade conflicts, ensuring each bot operates independently. Second, and most importantly, it limits the bot's potential losses to only the funds within its specific sub-account, preventing it from touching your main account balance. If you allocate $1,000 to a bot, it can only lose that $1,000.
* When setting up API keys for LiveCopier on Bybit, it's vital to whitelist LiveCopier's specific IP address. This security measure ensures that even if your API keys are compromised, they can only be used from LiveCopier's authorized servers.
* Furthermore, never grant API permissions for "account transfer" or "sub-account transfer." This prevents the bot or any unauthorized access from moving your funds out of the exchange, adding another layer of security.
* Selecting and Backtesting Strategies on LiveCopier & TradingView:
* LiveCopier offers various strategies, with premium plans providing access to more advanced options. Some popular strategies can become "filled up" and no longer accept new subscribers to maintain their effectiveness.
* A key feature is the "strategy tester," which links directly to TradingView. This allows you to backtest historical data and see how a specific bot strategy would have performed.
* You can add these bot strategies as "favorite indicators" on TradingView to visualize entry and exit points directly on your charts.
When evaluating strategies, look for charts that show consistent, continuous growth* over time, even if it's slow. Avoid strategies with significant "drawdown periods" (where funds consistently decrease before recovering), as starting during such a period could lead to substantial initial losses.
* While strategies might be suggested for specific coins (like Ethereum or Bitcoin), they can often be configured for other assets as well.
* Detailed Bot Setup on LiveCopier and Bybit:
* The process starts by creating a sub-account on Bybit through your main account. It's recommended to name the sub-account after the bot strategy for easy identification.
* Important note for Bybit users: LiveCopier currently only supports the "Standard Account," not the "Unified Trading Account."
* Funds are transferred from your main spot account to the derivative account of the newly created sub-account.
After creating the API key on Bybit with "read and write" permissions for contracts and spot trades (but not* transfers), you copy the API key and secret into LiveCopier.
* When configuring the bot on LiveCopier, you select the sub-account. You'll typically use "cross margin," which means the entire sub-account balance is available as margin.
* For risk management, set a "wallet percentage" for each trade. For example, setting it to "500%" in combination with 100x leverage on Bybit means it will use 5% of the sub-account's capital for each trade. This allows for many losing trades (e.g., 20 trades on a $2,000 account using $100 per trade) before the entire sub-account is depleted, providing a buffer.
* The bot can be set to automatically scale up its trade size as the sub-account's balance grows, maintaining the set "wallet percentage."
* A crucial setting for stop losses is to use the "mark price" instead of the "last price." The mark price is a smoothed average, which helps avoid premature liquidations caused by temporary, erratic price spikes on the exchange.
* After saving the settings, the bot may take a few days to start placing trades, and you can verify its activity directly in the sub-account's order history on Bybit.
While setting up these bots involves some technical details, the overall process is manageable once understood. It's an accessible way to explore algorithmic trading, even with a small starting capital.
Transcript
Over the past 60 days, I've been testing out algorithmic trading. I'll just show you guys very quickly here. This is the dashboard. The AI has been trading and honestly, past 60 days has been good to me. I made $1,224 on just a mere $10,000 investment. In fact, the results are so good. I'm doubling down on it in today's video. I'll be showing you guys some of the precautions I'm taking, how to manage my risks when it comes to this, what the dashboard looks like. And of course, why I'm doing thi...