Like most people, you may watch this quick video tutorial and immediately think “there is no way I’m using a trading bot if it’s this convoluted.” That’s okay, you wouldn’t be the only one. Even professional traders will be watching this video and scratching their heads.

The UI looks like a mad scientist tried to design a user interface for controlling the quantum state of the universe.

Crypto traders have better options, thankfully. Instead of trying to haggle with complex solutions like the one discussed above, or trying to trade manually on exchanges, there are ways to manage your assets in a more holistic way.

This is called portfolio management.

Instead of executing trades for each individual asset, portfolio management allows you to simply select the assets you want to own and then abstract the rest. The order execution is then managed by a software solution that interfaces with the exchange to execute your strategy or construct your portfolio.

Some of the most common strategies people have been using for portfolio management include rebalancing, dollar-cost averaging, and smart order routing. Each of these strategies is important to understand. They will help you simplify the way you manage your portfolio with trading bots, without adding extra complexity.

Portfolio Rebalancing

Portfolio rebalancing for cryptocurrency is similar in many ways to how it is executed in the traditional financial system. This strategy has been used for decades by institutions to reduce portfolio risk.

As the price of cryptocurrencies fluctuate, portfolio rebalancing allows us to maintain a consistent allocation of each specific asset. For example, if you have 25% BTC, 25% LTC, 25% ETH, and 25% XRP in your portfolio (based on value). As time goes on, the markets will change and you may end up with more or less of each asset (based on value) in your portfolio than you desired from your initial allocations. A rebalance would trade the assets such that at the end of the rebalance, you once again hold 25% of each of these 4 assets.

To better illustrate how this works, here is a detailed example.