Why Should You Use Grid Trading Strategy to Automate Your Trades?by Trailing Crypto cryptocurrency experts
If you are a regular crypto
trader, you might have tried many trading bots. Well, if you haven’t tried grid trading bots yet, then it is
recommended to use them to earn good profits. Many experienced crypto traders
are using grid bots as they are quite remarkable. Now, you might be thinking
what is grid trading and how can one use grid trading bots?
Let’s explore these answers
one by one:
is grid trading?
Grid trading is a type of
quantitative crypto trading strategy. In this type of trading, orders are
placed above and below a set price, creating a grid of orders at increasing and
decreasing prices. This trading strategy seeks to capitalize on normal price volatility
in a crypto asset by placing buy or sell orders at certain regular intervals
above or below the preset price.
It’s an automated trading
strategy where an investor or trader creates a price grid and the basic idea
behind this strategy is that the trader will repeatedly buy at some predefined
price, and then wait for the price to rise above that level, and then sell that
position. This kind of trading works great in the ranging sideways market, and
using a grid trading bot allows you to execute the strategy even if you are
Grid trading gives profits
to traders with ups and downs of the price fluctuations in the market. It
allows traders to make profits with smaller price fluctuations. And, a grid
trading bot helps traders to perform grid trading to make good profits. The
more frequent and the bigger price fluctuations are there, the more profitable
the trading strategy will be.
is a grid trading bot?
Grid trading bot is a kind
of bot that assists its traders in carrying out the grid trading strategy. It
enables them to place a series of buy and sell orders within a defined price
range. The main principle of grid bots is the same as that of Dollar Cost
Averaging (DCA) bots.
In grid trading, the bot
first places a buy order, and if the price moves in the opposite direction, it
places some additional orders. The main difference is that in this bot, each
buy order will place a take-profit order separately unlike DCA bots where a
take-profit order is placed for all the executed buy orders.
When you choose to trade
using grid bots, every buy order will place a sell order. If you have placed 10
buy orders, a total of 10 sell orders will be placed here. One can also
consider crypto trading signals to set the grids on the bot.
This bot has a continuous
closed loop of work and once the bot closes all sell orders, it will start a
new cycle by placing a new buy order.
performing grid trading, the traders must make sure that the proper risk
management measures are in place. Determining a lower price range on the grid
is the key to guaranteeing profitability in grid trading. So, it is important
that you must be extremely selective on the market trends suitable for your
grid trading strategy to avoid being on the risky market.
an appropriate leverage ratio is a must for grid trading. Make sure to set
suitable stop-loss and take-profit orders to avoid losses due to the fluctuating
market conditions. Also sure that the grid trading parameters set by the
traders are compatible with the current market conditions. These parameters can
be adjusted in real-time as per the present market settings.
trading is ideal for everyone who wishes to trade cryptocurrencies in a
systematic way. And, one should take advantage of trading bots when it comes to
automating their trading strategy.
Best grid trading bots
popular exchanges supporting grid trading:
Binance grid trading bot
one of the most popular cryptocurrency exchange platforms, Binance offers grid
trading bot available on their futures market. A lot of Binance users may not
be aware of it, and if you are the one looking for the best grid bot to earn
profits on the grid strategy, try Binance trading bot. This bot is different
from other trading bots as it won’t hold positions, rather it shorts or longs
over each grid where the price reaches to its buy or sell threshold.
TrailingCrypto grid trading bot
is another popular crypto trading terminal in the market that supports grid
trading. The platform allows its traders to connect with the popular and major
crypto exchanges to perform grid trading. This trading bot allows you to set
grid quantity, lower and upper price limit, price, and more. Additionally, some
additional parameters are also available including take profit, training
orders, stop loss, and more. The platform provides crypto trading signals to the traders to place the trade smartly.
3Commas grid trading bot
is one of the best grid trading bots which works with all the major crypto
exchanges. This bot actually offers AI-based grid trading where you will allow
the bot to decide the upper and lower limit. Manual trading option is also
available where the trader can set the parameters by their own.
Created on Feb 7th 2022 23:23. Viewed 104 times.