Portfolio rebalancing has long been used in traditional finance to help investors reduce investment risk, while profiting from volatility. As a popular but very tedious strategy to manage for crypto traders, Quadency makes it easy to automate your asset allocations with the Portfolio Rebalancer.
Most simply, rebalancing a portfolio means re-distributing your asset allocation periodically over time. For this purpose, investors continually buy or sell assets in a portfolio to maintain their desired levels of asset allocation.
In a market with constantly evolving prices like crypto, traders often manage their risk by re-investing profits from high performing investments into stablecoins or other assets they anticipate increasing in price.
The Portfolio Rebalancer is the latest new bot available in our growing library of pre-built strategies. Whether you want to build a diverse portfolio or liquidate all your assets in favour of one, execute automatically and with ease.
To configure your bot:
- Select the desired assets and set their respective allocations.
- Define the interval: hourly, daily, weekly, monthly, or one-time.
- Select the threshold.
Rebalancer Strategy Examples
While easy to set up for simple rebalancing, this powerful tool also enables traders to execute more sophisticated automation strategies.
Build your Portfolio
You just connected a new account from a supported exchange and want to quickly build your portfolio. Slow, tedious, manual trading is a thing of the past with Quadency's "Rebalance Only Once" option. Simply select your top 10 (or less) preferred asset allocations and start the bot live.
Liquidate all your assets into one, or 'Sell All for X'As experienced investors know, day trading and automation can bring many short term investments in various assets into your portfolio. Let's say that at the end of the day/week, you want to secure your profits before your next trading session. The Rebalancer can help by instantly liquidating all of your assets into a stablecoin, BTC, or any lower volatility asset.
Beat the volatilityThe Portfolio Rebalancer can also be useful in times of larger price action, helping you catch and take advantage of market swings by rebalancing hourly. Like all of Quadency's available automation strategies, this can help you maximize return and mitigate risk while away from your trading terminal.
Manage your mining rewardsMany Quadency traders use the Rebalancer to more efficiently manage their mining rewards with automatic re-allocation of reward payouts periodically. For example, you can have your rewards automatically swapped for stablecoins, or distribute them into different crypto assets to diversify your portfolio.
When trading crypto, investor options range from the simple buy and hold to more advanced, active trading. HODLing is of course common when anticipating price increases, but this passive strategy fully depends on market movement, providing little to no risk mitigation for downturns.
Rebalancing allows you to create a larger holistic portfolio strategy regardless of your individual trading of particular assets. The rebalance of the portfolio occurs when an asset's allocation drops below or moves above a predetermined threshold, protecting investors from being fully exposed to price drops. While it may limit potential profits, it effectively helps minimize risk if used correctly.
Portfolio rebalancing offers many advantages compared to simply holding your crypto, and Quadency's automated strategy makes it easy to minimize risk by rebalancing your portfolio periodically. One popular use is to instantly liquidate all your assets into one, such as a stablecoin or BTC.
Disclaimer: contents of this article are for general market education and commentary and are not intended to serve as financial, investment, or any other type of advice.