Grid trading is a kind of quantitative trading that is very specialized in its use. This trading bot, which automates the process of purchasing and selling commodities on the spot market, is used to buy and sell commodities on the spot market. Its objective is to execute market orders at regular intervals within a certain price range, in accordance with a predefined timetable, in order to maximize profits.
A grid of orders is formed when orders are placed both above and below a specified price, resulting in the construction of a grid of orders with values that are increasingly higher and lower in value. A lot of times, grid trading is done in combination with the foreign currency market to make money. For the most part, the method seeks to benefit from an asset’s normal price volatility by placing buy and sell orders at regular intervals above and below a predetermined base price.
For example, a forex trader may put buy orders every 16 pip above and sell orders every 16 pip below a preset price every 16 pip above and below a preset price. This makes use of current trends. Additionally, they may place buy orders at a lower price and sell orders at a higher price than that. Using the range conditions, this is accomplished.
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Benefits Of Using a Grid Trading Bot:
Top benefits of using a grid trading bot are the following:
- A Trustworthy Cryptocurrency Trading Strategy:
Grid Trading has a lengthy history and is a well-established, time-tested, and lucrative trading strategy. It has been utilized successfully in a variety of markets by a large number of successful traders for decades. In particular, the cryptocurrency market has established itself as one of the most reliable venues for Grid Trading techniques, because of its high degree of fluctuation.
- Usability:
The technique is simple to comprehend and use since it does not rely on complex calculations, measurements, or market indicators. Establishing a cryptocurrency trading platform will be simple for organizations that have no previous expertise in the bitcoin trading marketplaces.
- Adaptability:
Grid Trading is based on the most fundamental trading concept (buy low, sell high, earn the difference), and as a result, it can be used in almost any market and generate profits regardless of the trend or behavior of the market in question.
You may actively regulate the frequency and length of the strategy by modifying the price range and the number of grids in the strategy.
Grids can be set up for the short term, with hundreds of trades every hour to benefit from all of the day’s minor fluctuations, or for the long term, with a large range selected and allowed to run for months to profit from any significant trend shifts. Grids can also be set up for the intermediate-term, with hundreds of trades every hour to benefit from all of the day’s minor fluctuations.
- Increase risk management effectiveness:
With the freedom to choose your grid method, you have the ability to more actively control your risk/reward ratio than you would be able to in most other types of trading. In certain cases, you may use a GRID Bot to generate a consistent little profit with almost no risk (for example, by picking a stable coin pair like BUSD/USDT), while in other cases, you might want to take a higher risk in order to get potentially substantial profits (e.g., with a low market cap coin that has high fluctuations).
- Automated trading:
As a result of its logical structure and the fact that all of its activities are pre-programmed and independent of market behavior, Grid Trading is particularly suited to automation. Grid Trading using a Trading Bot is not only more efficient, but it is also easier than manually performing the strategy, which is a bonus.
It’s a fantastic tool for traders who want to take their initial steps toward automation since it can be used on virtually any market, in almost any condition, 24 hours a day, and at almost any time of day or night.
Difference Between DCA And Grid Bots:
The following is the distinction between the two trading bots:
| DCA bot has a same take-profit strategy for all orders. | The grid bot calculates take-profits independently for each order. |
| By investing at regular periods, the DCA bot mitigates the risk of buying high. | Grid bot is most effective when a currency pair is in a range with no discernible up or downtrend over a prolonged length of time or in a sideways market. |
| The DCA bot assists you in averaging token purchases, ensuring that you acquire a large number of tokens at a favorable price over a certain time period. | Grid trading bots enable you to benefit from market volatility without holding a large number of tokens. |
Top Crypto Grid Trading Bots 2022:
As you can expect, numerous grid trading bots provide a range of perks and features, so the choice is entirely up to you.
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Pionex:
Pionex is without a doubt one of the best crypto-grid trading bots on the market, and their grid trading bots are completely free to use.
These individuals provide five unique grid trading bots for free, depending on your needs.
By specifying a price range and the number of grids, they can automate their grid trading strategies. You can either choose your own money proportion or use their superior artificial intelligence technique.
Additionally, Pionex offers a reverse grid bot that enables you to protect your assets during price drops.
If the value of your assigned assets declines, it will purchase them back. Use a reverse grid bot if you believe the price will fall.
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Coinrule:
Coinrule is another incredible cryptocurrency trading bot that you should use because it claims to simplify automated trading.
They want to help their customers compete with expert traders, which is why they offer a variety of grid bot trading techniques and grid bots that will take care of everything for you.
They claim to be connected to over ten prominent exchanges and to offer military-grade security and encryption, ensuring that your assets are never compromised.
Additionally, they provide extensive historical data on current and previous grid bot trading tactics, allowing you to learn from the best and execute your trades successfully.
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Bitsgap:
Bitsgap is another grid trading bot that you should use immediately since they provide a diverse selection of grid trading bots.
Clients may select the number of grids, their price, their exchange rate, and their pricing constraints. Additionally, they let you to set the percentage of your money that goes to that transaction.
Additionally, they have taken profit, stop loss, and trailed stop loss.
They calculate the profit margin for each grid by subtracting the price percentage from the trading fee percentage.
A trial mode enables you to try out one of Bitsgap’s cryptocurrency trading bots completely for free.
Their required minimum investment varies according to the criteria you specify. They determine the minimum deposit amount based on the grid size.
Additionally, you must provide the price at which the stop loss will be executed. When this occurs, all active bot orders are immediately canceled. The bot will attempt to get the best possible price for your base currency.
Their entry-level plan is $19, their pro plan costs $44, and their advanced plan costs $110.
Conclusion:
Grid Trading bots are very profitable and widely used since they help you to earn arbitrage profits by purchasing low and selling high. When the price of a token owned by the bot fluctuates, the fluctuating loss or gain caused by that fluctuation is referred to as unrealized profit.
The disadvantage of a grid that goes opposed to the current trend is that risk is not managed properly. If the price continues to move in a single direction rather than in a range, the trader may find himself in a losing position that is only increasing in size. Otherwise, it was a really lucrative strategy that allows people to make a lot of money without worrying about very little.
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