How do you earn money from Grid Trading Bots?

Thursday , 6, June 2024 Leave a comment

With the cost of cryptocurrencies changing rapidly in a matter of minutes and markets operating 24 x 7days a week, it is becoming more difficult for crypto traders to keep up. Beginners are not able to adapt quickly enough to the fluctuating market to generate profits. Furthermore, the delays in transactions could exacerbate the problem. To achieve better results, traders can’t monitor the markets for crypto or other currencies throughout the day – get the facts?

The crypto trading bots provide us with an opportunity to automatize crypto trading. These bots use algorithms to perform trades and complete transactions.

We will be discussing grid trading techniques, trading strategies, as well as the benefits to users.

What is a grid trading strategy?

It is among the most popular strategies for trading in crypto that involves placing orders above and below a set price by using the price grid for the orders. This involves orders at incrementally growing or declining prices.

This trading strategy makes use of the market’s price movement to determine whether to buy low or sell high. It can be achieved by placing multiple orders both ways. If the price changes or down on the grid, the filled orders are replaced automatically with suitable buy or sell orders.

If a buy order is fulfilled, a sell order will be added to the gridline above. Also, when a sell order is successful, a buy order is also placed. The difference between these lines represents the profit earned on every buy or sell transaction.

Usually, the trading robots utilize this strategy in the market that is ranging and has no clear direction. Instead of cancelling prior gains, grid trading bots benefit of market volatility to lock in the opportunities and profits. Bittrex trading bot works using grid strategy.

How grid trading works

Grid traders create upper and lower limits within the grid in which they execute sell and buy orders. If the price drops below the lower limit then a buy order will be completed, and reversed. Now, the question is how it works? Let’s understand this with an example: If the cost of any crypto asset, let’s say XYZ. $10,000. Here the trader could decide to set a lower limit of $59,000 and an upper limit of $10,000. The space between these two limits is called the grid. When the price is lower than $9,500, the buy order will be executed, and the price rises above $10,500, a sell order will be executed. In this case, traders can place multiple sell or buy orders in different locations on the grid.

In every grid, the trader has to determine the price by hand for the lower and upper limit. These orders then are executed by trading bots in accordance with the price intervals which have been predefined.

The greater the difference between the lower and upper price limits on the grid. the more possible profits.

Also, be sure to select a price range to the strategy you plan to use and then determine the number of grids that you want to put in that range. By dividing the price grid in smaller grids trading, traders are able to make profitable trades. The higher the frequency of trade the greater number of grids are there. This type of trading could be carried out at intervals such in 1 minute, five min, 15 min 30 minutes, or 1 hour.

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