HodlBot Review: Easy Automated Portfolio Management

How HodlBot Works

HodlBot is an extremely affordable trading bot. Regardless of which subscription or account tier you are in you receive the exact same features, the only difference is how much you pay for the subscription which is determined by the amount of money in your account. It is free for the first 14 days, and then it is $3 a month if you have less than $500 in your account. This used to be a free tier but has since changed. If you hold $500-$1000 in your account it is $6 a month, and the most expensive tier is $14 a month if you hold over $1000.

Available Exchanges

While HodlBot does not offer compatibility with as many exchanges as some other trading bots, it still has more than Zignaly and the same number as Apex Trader with four. The exchanges HodlBot does support are also some of the biggest on the market. Here are the four exchanges that are compatible with HodlBot:

• Binance
• Kraken
• KuCoin
• Bittrex

Before you can connect HodlBot to one of these exchanges you will need at least $200 worth of cryptocurrency on the exchange. If you do not have $200 then HodlBot will not function properly. Once you have met that prerequisite it is easy to connect HodlBot to you exchange account with API keys. Your API keys are found on your exchange account, you will need to create them. HodlBot only requires API keys that allow trading permissions, withdrawal access is disabled meaning your funds are safe from being stolen if someone gets your API keys. HodlBot also cryptographically encrypts your APIs on their end.

Using HodlBot

As mentioned at the beginning of our HodlBot Review, it is quite easy to use. They have a clean and simple user-interface (UI). The platform is built with portfolio management in mind, and its web-based interface is evident of that objective. Some of the most important factors are shown on the home screen as a dashboard, so users could have an accurate idea of their portfolio status by glancing at the screen.

Apart from the UI, the overall functionalities also remain quite simple to setup and execute. It is especially helpful for new traders who are focusing on portfolio management. For those looking to just have their portfolio managed automatically there are not many better options. The caveat being that it is very restrictive for seasoned traders who want more features out of their trading bot.

HodlBot Features

Present Strategies & Settings

HodlBot offers a small selection of preset trading strategies for portfolio balance management:

• HODL10 or Kraken10: Selecting this strategy means your portfolio will hold and balance top 10 coins by market cap. HODL10 is rebalanced every 28 days by default, whereas Kraken10 is rebalanced every 10 days by default.
• HODL20: Same as HODL10, but for the top 20 assets by market cap, but it caps individual assets holdings to 10%, if it goes above 10% it will get redistributed and rebalanced
• HODL30: Same as HODL20, but for the top 30 assets by market cap

Create Your Own Index

If you are not content with any of the preset strategies that HodlBot provides then you can create your own index. You pick the number of coins in the portfolio and the percentage caps for each, whether minimum or maximum, anything outside those parameters will then be rebalanced. You then select a weighting strategy of which there are three options:

• Evenly Weighted: Every coin in the portfolio has equal weighting
• Market Cap Weighting: Coins with larger market capitalizations are weighted more heavily. The percentage of any individual coin is the coin’s market capitalization value divided by the total market capitalization value of all the coins in the portfolio
• Square Root Market Cap Weighting: The square root weighting strategy has a similar function to maximum percentage caps. Since the cryptocurrency market is top heavy, taking a square root of market capitalization shifts some of the weightings from the highest capped coins towards the lower-capped coins

After you have done those first two steps, you can then backtest your strategy, and if it works to your satisfaction, you can then save it to your portfolio and execute it right away.

Portfolio Rebalancing

Portfolio rebalancing is the practice of resetting your portfolio to its original target allocation. For example, if you wanted to keep a portfolio that is 50% Ethereum (ETH), and 50% Bitcoin (BTC). The price of ETH relative to BTC may increase, causing your portfolio to become 70% weighted in ETH. During a rebalance, HodlBot sells some ETH and uses it to purchase BTC, therefore getting your portfolio back to its original target. HodlBot offers two different types of rebalancing:

• Periodic Rebalancing: Portfolios are reset to their target allocations on a fixed time interval. This can be every week, month, quarter, or year. Assets that are overweight are sold to purchase underweighted assets until the portfolio reaches its target allocation
• Active Rebalancing: Portfolios are rebalanced based on human judgement

You can manually rebalance your portfolio or change the frequency with which HodlBot does it for you.

Coin Blacklist

You can blacklist coins you don’t want to have in your index. This will remove the coin from your portfolio and replace it with the next highest coin by market cap.