What is a Grid crypto Trading Bot?
What is Grid Trading?
The idea of grid trading is to place a series of purchasing and selling orders at intervals that are predefined around a fixed price, this then develops a commerce grid over time. Grid trading excels in a market that is very volatile, with regular variations in the price as it assures profitability every time that the selling price overtakes the selling price during a lateral price movement.
This is done by automatically executing purchase orders that go onto higher sell orders, which in turn removes the need for market forecasting. Grid trading also allows you to sit back and automate your trading, which can alleviate some of the micromanaging that is usually required with most trading strategies, potentially allowing profits to roll in on a regular basis.
To get the most out of grid trading, there are a variety of factors that must be taken into account to get the most in the way of earnings out of the strategy. There are methods that can be used to get the most out of the volatility of the market of each coin. The best candidates for grid trading are usually the coins that have frequent ups and downs, however maintaining a fairly consistent price.
This is because they allow for many trades that are profitable, while also giving the bot time to run without its parameters having to be tweaked. If the market was consistently going up or down, the results would be a lot less consistent as the bot will have to be tweaked a lot to keep up with the market. In some extreme cases of this, the bot will not work at all and you will just lose money on it, or miss out on profits.
What are the best crypto trading bots?
Binance Grid trading bot
- Fee: 0.1% trading fee for maker and taker. However there is currently no subscription fee for full access to the trading bot.
- Difference: The bot only allows for trades on the perpetual futures market, making it slightly less accessible.
- Price: The starting plan is $19/month and the pro plan is $110/month. There is however a free trial that is available to users
👉 Grid Trading is for when the market moves sideways → A Pair that has MANY and HUGE Ups and Downs, while its average price doesn’t change much over a longer period, is most certainly a GOOD pair for Grid Trading.
👉 a high “Grid Profit” means NOTHING! If a coin pumps for 100% every Grid Bot will show a nice “Grid Profit”, but in reality everyone making a simple Limit-Sell, or Trailing Stop Order, would have been way better off, than anyone running a Grid.
👉 If you cancel and remake your grid, because the price pumps/dumps out of your Grid-Price range > you make some loss which you don’t see. (Keep that in mind)
👉 always try to use a price range, which will hold for a while (at least a few days, better weeks)
👉 making profitable short time grids and cancelling + remaking them hourly/daily is a bad strategy, even though it always shows you good % grid profit.
👉 to evaluate if a grid is good, you need to look at more than just the grid profit. For example: if the price when you started the grid is ~ the same as the current price AND your grid made 5% it is a “good” grid (it really made 5%) If the current price is 20% higher than the start price of your grid and your grid made 10% it would have been better to just do 1 limit sell order > “not so good” grid.
👉 If people post Screenshots of their Grid profits, or you find a strategy in “Copy Trade” and think about recreating the Grid, check this first: -did the pair just pump for more than the grid profit shown? (Most of the time its a bad idea to recreate it then)
👉 did the grid bot run for a while, or was it created only a few hours ago (long time grids, which have been running successful for days/weeks, have more success when being recreated, than a short time grids which already “had their time”)
👉 did the pair go up and down a few times while the bot was running, or did it run steadily in one direction. (Grid trading profits from the ups and downs in the market, if a pair doesn’t do that it’s almost always better to use another strategy or pair)
👉 only invest and run grid bots on pairs, on which you think BOTH sides of the pair have a future. Regardless how your grid goes, you will always sit on one of the 2 assets! (Ex. don’t invest in trx/eth if you think either TRX OR ETH will be dead in 2 years)
Pionex offers 12 built-in trading bots on their platform, with the majority, 6, being Grid Trading Bots. This makes the platform very popular for the average bot trader. The platform also happens to be one of Binance’s biggest exchange brokers, it also aggregates the liquidity from Huobi Global simultaneously. This makes Pionex the best overall trading platform for Bot Traders.
- Fee: 0.05% trading fee for maker and taker. However there is no subscription fee for full access to the trading bots
- Pricing: The plans start from $14.5/month, which gives you the starter license, and the highest price is $49.5/month for the Pro version. There is however a free trial available.
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KuCoin Grid bot:
- Fees: 0.1% trading fee for maker and taker.
- Price: There isn’t a subscription fee present for the trading bot.
BitUniverse is the original Grid Trading Bot. The interface allows for easy access to the bot for newer users as it is fairly intuitive, and is also mobile friendly, for that added benefit. The team who created BitUniverse made sure to partner with most of the major exchanges, allowing the user to access any of these exchanges through their APIs. Changing the app’s settings and parameters is very easy with the nice UI. The Bot allows for access to more than 20 exchanges.
- Pricing: There is currently no fee needed for full access to the Trading Bot.
- Fees: 0.20% for both takers and makers, which is slightly higher than some others.
- Pricing: There is however no subscription required to have full access to the Trading Bot.
Is there a course for learning grid bot trading strategy?
The course also boasts some impressive benefits, including but not limited too: a “professionally coded and automated trading bot”, Complete details on how it works, Settings, and info on how to adjust them to different markets, risk tolerance, and profit objectives.
The Grid Trading Course – Complete is priced at $495.00, this includes the Trading robot, and access to all live sessions with recordings available for download as well.
Grid Trading is one of the best strategies in a ranging sideways market
Grid trading is one of the best and most consistent strategies for a ranging sideways market, there are a couple of key reasons for this. One of the key reasons for this is the fact that when the market is ranging sideways The overall price for a decent period of time is consistent, meaning the Grid Trading Bot’s parameters won’t need to be edited or altered for a decent while. Allowing the user to profit consistently with little to no effort.
Another factor as to why this is a good strategy in a “ranging sideways market” is because the dips and peaks tend to be quite close together and rather often, which means there can be more sets of trades in the same amount of time as there can be in other types of markets. This again shows that the Grid Trading Bots can be very useful as they will allow for the perfect timing of each trade to maximise the profits and also keep trades happening in all possible spots without any extra micromanaging from the user.
When should you use a Crypto trading bot?
#1 Repetitive Tasks: Grid Trading bots are ideal for repetitive tasks as they allow for quicker purchasing
and selling than doing it manually, as the bot can do it instantaneously. This will also allow for the user to have a lot less micromanaging after the initial set up as the bot can then be left to do its own thing. This pairs brilliantly with a ranging sideways market, as it allows for the bot to be very profitable without being touched at all by the user.
#2 Timing: Timing and achieving a high degree of accuracy is paramount in Cryptocurrency trading, each and every trade can make or break your earnings, this means the user has to be on point with their timing. This is where Grid Trading Bots come in, they allow for the potential timing errors of a human user to be averted and avoided. This in the long run can potentially save you and make you a lot of money. The bot can be easily programmed to and adjusted to make trades at the perfect time, by analysing and monitoring the desired market.
#3 Complications can be simplified: A great example of this is “smart order routing”. The idea is to route trades through multiple pairs to increase the profits.
- Each trade pair needs to be carefully tweaked to its own timing, trading price and asset quality.
- This entire route needs to be completed before the conditions of the market change as it will be no longer profitable after that.
This all seems pretty simple, however this would be almost impossible to execute as a human user as the timings required will be far too small. This is where the bot comes in, as it can allow for these routes to be completed before the conditions to be completed. This is an example where Grid Trading Bots are a must, as humans just aren’t quick enough.
Conclusion: Which Grid Bot App to use?
Cryptocurrency trading bots can be very helpful in letting you generate a profit from your investment, quickly and easily in some cases. These bots also help to remove some of the micromanagement from the user, allowing them to do other things while the bot trades for them. There are definitely Pros and Cons to all of the bots mentioned above, so there may not be one bot that is perfect for every single trader. However there are definitely some that are better than others.
For instance the Binance bot may not be the best option for newer users as there is a slightly different approach that this bot takes. Whereas the 3Commas Trading Bot is a great place for new users to start as it has a very intuitive layout and is simple to use.
Overall though, one of the best go to bots would be the Kucoin Grid Trading Bot, as it offers a great list of pairings and trades in over 400 markets in a 24 hour period. The bot also provides a sophisticated API which allows the users to create a secure trading strategy easily. The bot also has some pretty low fees and doesn’t charge a subscription fee to use the bot, making it an almost perfect choice for users wanting to implement the Grid Trading Strategy through a Trading Bot.
So all in all, there is no right and wrong answer to which is then “best trading bot”.
How can you create a crypto trading bot yourself?
- Decide on which programming language you want to code it in, preferably one that is common and familiar to help with troubleshooting.
- Acquire the APIs that you want the bot to use.
- Create all of your accounts with the various exchanges.
- Choose your strategy for trading.
- Make sure that data you want your trading bot to use is clearly defined.
- Actually making the bot, definitely the most time consuming part of the whole endeavour.
- Testing, this is a very key step as you want to make sure the bot works correctly.
- Finally, deployment of your bot and actually getting it up and running.
How do you file taxes for crypto bot trading?
Filing taxes for crypto bot trading will be very similar to filing taxes for normal crypto trading, however before using any crypto bots to trade, make sure to check your specific countries tax regulations it will differ from place to place.
What are the different types of Cryptocurrency Trading Bots?
The five main types of crypto trading bots are as follows:
- Profile automation bots
- Technical trading bots
- Arbitrage bots
- Market making bots
- Algorithmic trading bots
Are crypto trading bots legal?
Bot trading is fully legal in both the stock market and cryptocurrency, making sure that your bot isn’t breaking any laws that would be in effect in normal circumstances. Trading bots offer a great advantage to users and the sooner you start the more of that advantage you will gain.
Can I start the bot with $100?
Yes, in short you can start bot trading with any amount of money, the main thing is making sure your strategy is calculated correctly, making sure to follow normal caution that would be followed when normally trading. Obviously you will make more money in the long run if you start with a higher amount of money, but the ROI won’t change based on the starting amount. As long as the exchange you are using allows you to start with $100 then you will be perfectly fine starting with that amount, as long as you are comfortable potentially losing it.
How much can I earn with a Grid Trading Bot?
What is the performance of a Grid Bot in different markets?
The performance of a Grid Trading Bot depends entirely on the state of the market. If the market is constantly on a downward trend and the price isn’t going to be bouncing back anytime soon, if ever, then you will see major losses if this is left to run as the bot will keep buying, waiting for a higher sell point. The Grid Trading Bot also won’t perform very effectively on a market that is rising all of the time, as the bot won’t be able to rebuy any of the Coins, without user intervention. Grid Trading works best in markets that are consistent in price over a long period, but have a fairly large amount of volatile price fluctuations. This is due to the fact that the price is almost guaranteed to bounce back, while also allowing for many buying and selling opportunities.
What are the risks of using a Grid Trading Bot?
Grid trading is not a perfect way of trading assets for a constant return on investment, and likely never will be. Even with Grid Trading being one of the low risk trading strategies compared to other strategies, there are still some risks that you need to be aware of.
- There is always the risk of not knowing what you are doing properly, if Grid Trading is new to you, never put in more money than you can afford to lose. If you get to a point in which you are more confident and have a better understanding of how the whole process works, then by all means go ahead and slowly start increasing the amount of money you are trading with.
- The Price going down and never coming back up is another risk to this strategy as even the best trading bots in the world won’t be able to be profitable in a market like this. This might seem rare to some of the bigger Cryptocurrencies, however it is a fairly common occurrence with some of the smaller market cap coins. Just take care in selecting coin pairings.
- There is the possibility for you to not set up the bots parameters correctly, you may set the stop loss up incorrectly, for instance. This could lead to a massive loss in capital if you’re not careful. This scenario here would not be any fault to the bot as it is only following the users parameters, which only reinforces the fact that you need to make sure you know what to do.
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