Grid Trading Bot

Grid trading bots are considered fairly sufficient instruments for every self-respecting cryptocurrency trader who decides to use automated algorithms to gain more profit. Simply put, the essence of grid bots is as follows: as soon as the first sell order you placed is entirely finished, the bot sets a new buy order but at a more down-grid level. In this review, we are going to talk more about the crypto grid trading bot and the main feature of its method of execution. 

Grid bots are perfect for trading digital currencies that are not following the trend. For example, it might be an asset that movement is chaotical. It doesn’t move up or down, following any clear direction. This behavior is also known as ranking, sidetracking, or “Bart Simpson’s Move”.

How does the bot work?

The Grid bot has a continuous execution cycle. Once the bot shuts all sell orders, it places a new buy order and starts a new cycle. The bot needs to split the certain range into a few levels/areas and create a network or a grid. The computing technology independently determines the required number of these levels. Users need to keep in mind that some exchanges limit the maximum number of simultaneously placed orders. Grid bots do not risk trading at the level closest to the actual price to avoid transactions with zero profit excluding commission.

First, the bot evaluates the token’s volatility over the past seven days and, based on this, forms a channel for work, price extremes in which it will trade. It splits the amount invested in the bot between the selected pair and places a table of buy and sell limit orders in the selected channel. 

It is a really easy system as soon as the price goes down, the bot will buy. It is basically the most fundamental idea of trading: buy low, sell high. Thus, as soon as the price reaches one of the lines higher than the current price, the bot will sell, fixing the profit. And so on, as long as the price is in the channel.

You should notice that the bot positions orders in a determined pattern that varies above and below the price, forming a set of orders with an upper and lower price limit. Many users often put orders manually, but the Grid bot is able to adapt to the demand of the market situations and, if properly programmed, can collect profits for you very proficiently and tirelessly work for weeks and even months.