Crypto traders are having a difficult time to cope with the fluctuations of the market. Prices can fluctuate dramatically in a matter of minutes, and markets are open all day. The novices aren’t able to react quickly enough to the fluctuating market to earn a profit. The delay in transactions could make things worse. In order to achieve better results, traders are unable to monitor cryptocurrency exchanges or the global market all hours of the day.
Bots for trading in cryptos give us the possibility of automating the process of trading in crypto. They use algorithms to make trades and complete transactions.
We will discuss grid trading as well as trading strategies and the benefits for users.
What is grid trading exactly?
It is among the most well-known strategies for trading in crypto. It involves placing orders either above or below a set price through the grid of orders. This method involves placing orders that gradually increase and decrease in prices.
This strategy of trading uses the price movements of the market to decide whether to purchase low or sell high. This can be accomplished by placing multiple orders on the sell and buy side. The orders that are filled are automatically replaced by the appropriate buy or sale order when the grid shifts upwards or down.
A sale order will be visible on the gridline when the order was completed. If a purchase request was fulfilled, an order to buy will be also placed. The amount of profit earned from each purchase or sell order is portrayed in the spaces between the lines.
Trading bots typically employ this method when the market is swaying and is not moving in a direction. Grid trading bots don’t erase previous gains, but instead profit from market volatility to lock in profits and take advantage of opportunities. Bittrex Trading Bot is also using a grid strategies.
How does grid trading work
Grid traders set lower and higher limits on the grid which is where they place their sell and buy orders. Buy orders are executed when the price is below the lower limit. What is the procedure? Here’s an example to help comprehend: Let’s say that the value of XYZ an asset in crypto, is $10,000. The trader could decide to set a lower limit of $59,000, and a greater limit of $10,000. The grid is the space in between the two limits. If the price is below $9,500, a purchase will be made, and if the price exceeds $10,500, a sell is made. The traders are able to place multiple sell and buy orders at different grid points.
The trader has to manually determine the upper and lower limit on each grid. The orders are then processed by trading bots in accordance with the price intervals that are defined.
Profits will be higher when the gap in price between the grid’s upper limit and lower limits is greater.
Choose the number of grids you would like to utilize in the price range you select. Split the price grid into smaller grids in order to generate profitable trades. The more frequent the trade the greater number of grids are there. This kind of trading can be carried out at intervals such like 1 minute, 5 minutes, 15 mins 30, 30 minutes or one hour.