1. SUPER SWING
Last updated
Last updated
GRID Bot is the trading bot that helps you to perform the Grid Trading Strategy. It is a trading strategy which, in contrast to most other strategies, works best in a ranging sideways market with no clear direction.
It profits from the ups and downs of the price fluctuations in a market and is best used while there is no clear up or downtrend for a longer period. The more frequent and the bigger the price fluctuations are, the more profitable the strategy will be.
1. Reliable Strategy in the Crypto Market Grid Trading has been around for quite some time now, and it is a proven, time-tested, and profitable trading strategy. Tons of examples of successful traders actively using it over decades on all possible kinds of markets can be found. Due to its high fluctuations, especially the crypto market turned out to be one of the most reliable spaces for Grid Trading strategies.
2. Simplicity for all crypto-traders
Because the strategy does not require any algorithms, indicators, or complicated market signals, everyone can easily understand and use it to make a profit. People with no experience in the crypto trading markets will have an easy time setting it all up.
3. Versatility
Because the strategy is based solely on the most basic idea of trading (buy low, sell high → earn the difference) and nothing else, it can be used on virtually any market and successfully earn a profit, regardless of the trend or market behavior.
By choosing the price range and the number of grids, you actively define the frequency and period of the strategy.
It can be set up for the short term, making hundreds of trades per hour to catch micro profits from all small fluctuations of a day.
It can also be set up for the long term by choosing a huge range, which will allow it to run for months to earn profit from every greater trend change.
4. Providing Liquidity
Grid Trading is a strategy that can be used for market making just perfectly. It helps provide liquidity and by doing that it will create a ton of trading volume for the trader if it's configured for that purpose.
But (even though most Grid Traders don't think about it) it can also be incredibly useful on illiquid markets with thin order books. Those markets tend to have huge spikes (like 5% up, then 7% down, etc.) very frequently and in short timeframes. You can easily "eat" all of these spikes by providing liquidity with a Grid Bot and turn them into nice profit for yourself. Not only that, it is also incredibly helpful for exchange you are trading on and is useful for anyone who would like to trade on that illiquid pair since it enables them to do that for a fair price.
5. Enhance Your Risk Management
The settings you choose for your grid strategy make a big difference in its success and allow you to influence the risk/reward level even more actively.
You can choose if you want to use a GRID Bot to earn steady small profit with close to zero risks (for example: by selecting a stablecoin pair like BUSD/USDT), or if you prefer to take bigger risks for potentially huge returns (e.g., with a low market cap coin that has high fluctuations).
6. One of the best strategies in a ranging sideways market
Most trading strategies you will find focus around correctly predicting a trend and betting on that prediction by trading accordingly (for example: If this EMA crosses that, while X-Indicator is showing this, then the price will likely go up).
Sadly, more often than not, the market just has no clear trend, or the trend goes in the wrong direction needed for the strategy, so traders using that strategy have to wait it out and stay flat most of the time.
Another thing to keep in mind is that because their trades are just bets on predictions, it's also very possible that they lose their bet and take a loss.
However, with a Grid Trading strategy, you don't need to wait for the perfect opportunity to “predict” the next move. If the trend goes downwards you buy cheap and then cheaper, if the trend goes upwards you sell high and then higher, if it doesn't go anywhere you buy and sell and buy and sell, making a profit from all the small fluctuations it does until it changes into a trend.
So, while other strategies will miss out on most opportunities and maybe even make losses if their prediction is wrong, Grid Trading will make use and profit from any price movement, regardless of the direction (as long as the price doesn't leave your range downwards without ever reversing back up).
7. Never ALL-IN: Dollar-Cost Averaging tactic
Grid Trading also is a great way to ensure that you are not missing out on opportunities to buy cheap or to sell high. If you configure a broad range and set it up for the long term, you are guaranteed to have an excellent average price in both cases.
8. Diversification
Many traders recommend that you spread your funds and invest in multiple assets instead of placing all your bets on one card. So if you are long term holding two assets, which are exchangeable with each other, you can use Grid Trading on to earn some extra profit from fluctuations in between them, while doing so.
9. Automation
Due to its obvious logic and because all of its actions are predetermined and unrelated to market behavior, Grid Trading is very susceptible to automation. Not only that, but it's also much easier and even way more efficient to utilize Grid Trading with a Trading Bot, instead of trying to follow the strategy with manual trades.
Since it can run on virtually any market, in any situation, 24/7 and because it can be configured for basically all periods, it's one of the very best strategies for traders planning to take their first steps into automation.
Grid Trading is still not a failsafe way to trade assets. All trading strategies have risks, and even though Grid Trading is one of the lower risk strategies, here’s the risk you need to keep in mind while using a GRID Bot.
If the price goes down and never comes back up, which (especially on small market cap coins) is the case more often than you would think. In such a case, even the best grid bot in the world wouldn't make profits.
If you started a Grid Bot on BTC/USDT in 2017 back when BTC/USDT was at 18k, you would have earned profits with Grid Trading for the whole time, but overall you would still be at a loss.
If you are not managing your buy and sell transactions effectively in a fluctuating market, or if you don't have essential order types such as stop-limit orders setup for market triggers, then you could end up losing a large amount of money.
It wouldn't be the bot's fault since it’s only acting on the settings you chose at the start. But it could still make a large chunk of your trading funds disappear if something doesn’t work out as it was planned. Currently, only Pionex’s GRID Bot provides trigger price, stop loss, and take profit features, which are helpful to prevent that..
It is essential to use the strategy with vigilance and care. Never put more money into it than you could afford to lose. Begin with low funds when you start trading with this or any other new instrument. Initiate with a low amount, then gradually increase it once you grow more confident in using the bot and what settings to choose.
From there, you can effectively learn more from experience and make informed decisions when using the grid trading method for certain assets and situations.
