The crypto market is popular for its high volatility. Crypto grid trading bots can help you take the opportunity and earn profit with a simple strategy.

crypto grid trading bots

Unlike traditional assets like stock and currency pairs, the price of cryptocurrencies can move rather drastically in a very short time. Supply and demand, market sentiments, government regulations, and media hype are some of the factors that cause the crypto market to be incredibly volatile. Since there's no central authority with the power to intervene in the market, investors' actions, to some extent, are becoming more significant to the price movements. This is why even something as simple as a tweet from a huge influencer like Elon Musk can affect the price of digital currency.

Most of the time, high volatility is not considered profitable because it increases the risk in trading. Due to the volatile nature of the market, crypto traders must work around the clock and pay closer attention to the price movement.

But obviously, not everyone has that much time on their hands to sit and monitor the price chart for hours and hours. As a result, many of them may find it difficult to react to the price changes in a timely manner. This is where automatic crypto grid trading bots come in handy. Here's a complete guide on what it is and why you should use it.

 

What Are Crypto Grid Trading Bots?

Crypto trading bots are automated trading systems that operate on behalf of the investor. They basically allow you to automatically execute trades based on a specific set of conditions that you've determined. In a nutshell, they simplify the process of trading and make crypto trading easier. Using an automated bot can increase efficiency as well as eliminate human emotions that might drive your trades into losses. They are especially helpful in the crypto market and its dramatic price changes.

One of the best crypto trading bots to try is the grid trading bots, which executes trades based on a trading system called Grid Trading. In opposite to moving average strategies in crypto trading, the grid strategy works best in ranging markets.

You basically take advantage of the ups and downs of price fluctuations, especially when there's no strong trend for a certain period of time. In other words, the more frequent and bigger the price fluctuations are, the more profitable the trade will be.

The strategy works by scheduling or setting up buy and sell orders in predefined intervals around a fixed price. This creates a grid-like formation, hence the name.How grid trading bots work

The grid trading bot would help you place a series of buy and sell orders within a given price range. When a sell order is executed, the bot will immediately place another purchase at a lower level, and vice versa. A market with frequent and large ups and downs, but a pretty constant average price in the long term is almost definitely the best possible condition for Grid Trading.

So, what are the benefits of Grid Trading Bots?

 

Automated Trading

Grid trading bot allows you to trade with grid trading method without having to watch the market all the time. This provides a considerably easier and more effective way to trade than trying to follow a strategy manually. Grid trading bot can be set in practically in any market, any condition, any time frame, and able to work 24/7.

 

Usability

Still related to the previous benefit, grid trading bots are quite straightforward and easy to understand because it does not involve complicated mathematical formulas, measurement, or market indicators. Thus, it is suitable for both expert and novice traders.

 

Adaptability

Grid trading bots are also adaptable because you can apply them to any market and effectively gain profit, independent of trend or market behavior. There are many variations that you can make to adjust the strategy, such as determining the frequency and period by ing the price range and the number of grids.

You can set the strategy for the short term and open lots of trades per day to capture minor price movements or set it for the long term by setting a big range and leaving it to run for months so that you can successfully capture large price movements.

 

Reliability

As a trader, you must've known that there is no perfect strategy that works every single time. However, the Grid Trading strategy is one of the most well-known strategies that has been around for years and has been proven by many traders worldwide. The crypto market in particular is suitable for this strategy due to its extreme volatility.

 

Adjustable Risk Tolerance

Grid trading bots also allow you to control the risk/reward level in order to increase the strategy's efficiency. You can choose to keep the risk minimum by trading with stablecoin pairs or taking a higher risk by choosing a small-cap coin.

 

Best Crypto Grid Trading Bots

Read below to learn about the best crypto grid trading bots you should try:

 

1. Binance

Binance is a leading crypto exchange that supports over 300 cryptocurrencies for global traders. It is also the biggest exchange at the moment that offers a built-in grid bot. Not many people are aware of this feature yet, but Binance's grid bot has pretty much everything you need for Grid Trading. However, it is worth noting that the bot is only available in the futures market, so it's more suitable for perpetual futures trading.

  • In order to use Binance grid bot, you need to visit Binance's website and create Binance futures account by ing Futures in your Binance account header. Once it's ready, click on "Derivatives" and then the "USD(S)-M futures". Now search for "Grid Trading" on the top right of the screen. Pick the right crypto pair and transfer USDT to your futures wallet.
    Binance grid trading


  • The next page shows you the settings for the grid bot. Here you can adjust the strategy according to your needs, like determining the lower and higher prices, and entering the number of grids you want to use. Once you're done, click "Create" on the bottom of the screen to activate the bot.
    Binance grid trading 2

 

2. Pionex

When it comes to trading bots, Pionex is one of the best crypto exchanges to choose. Pionex offers 12 built-in trading bots with grid trading, being the most popular than others. Pionex is also one of the biggest Binance brokers that aggregate the liquidity from both Binance and Huobi Global, making it an excellent platform to trade with crypto bots. Apart from that, the bots are completely free, so you can use them straight away after you deposit some funds in your wallet.

 

3. BitUniverse

If you're looking for a free and reliable bot, BitUniverse is perhaps the best one to choose. To begin with, BitUniverse has a user-friendly interface that's very easy to navigate around, even for beginners. The system is also very easy to follow. You simply have to connect with your exchange by using API keys. BitUniverse has partnered with over 26 major exchanges, including Binance, Huobi, CoinbasePro, and more. Since your crypto assets are not stored in BitUniverse, you can be sure that it's safe.

 

4. 3Commas

3Commas is another popular third-party crypto trading bot service where you must connect your API keys before you can trade with it. One of the best benefits of 3Commas is that it offers paper trading, which is great for those who want to test the bot before actually investing with real money.

The platform has a good interface and is available for mobile phones as well. 3Commas also supports almost all major cryptocurrency exchanges and provides free tutorials to perform grid trading. In addition, 3Commas offers an AI-based grid trading option where you can let the AI set up the upper and lower limit for the grids. Or, you can just manually set the limits. However, note that you need to pay a subscription fee for using the bot. It costs about $49/month for grid bot trading. If you want to test the system before registering, 3Commas offers a 3-days trial.

 

5. Bitsgap

Bitsgap is among the latest releases in the world of crypto grid trading bots, but definitely still worth checking out. Bitsgap offers a trading bot that's able to evaluate over 10,000 digital currency pairs and choose a coin with the biggest potential. It also offers a test account that is great for beginners and allows you to connect with various major crypto exchanges, including Binance. Pricing for Bitsgap trading bot starts from $19.month for the Starter license and $110/month for the Pro license.

 

Can You Make Money with Crypto Grid Trading Bots?

It's crucial to remember that when it comes to crypto trading, the results largely depend on your trading skill and decision-making. Grid trading bots basically only execute your trade based on your instructions.

If you have a good trading plan in mind, then the bots can help you execute it so that you don't have to stick your nose to the screen all day long and just leave the work to the bots. Therefore, trading bots can generate profit but only if you know how to set it right.

If you're just starting, it's recommended to choose the free options like Binance or Pionex. Or you could also choose 3Commas and make use of the 3-days trials. But above all, the most important thing is to always consider the risks and proceed with caution.

It would be helpful to learn about the strategy before deciding to use a trading bot. If you know what you're doing and you're prepared to consistently monitor the trades, trading bots can undoubtedly be a great addition to your overall trading strategy.