Why is it necessary to Use Grid Trading Bots? What Benefits You can Earn From them?

Crypto traders are finding it difficult to cope with the fluctuations of the market. Prices can fluctuate dramatically within a few minutes and markets are open all day. For those who are new to crypto trading, they are unable to react quickly enough to benefit from the opportunities to profit from the rapid volatility of the market – extra resources! In addition, delays in transactions can worsen the situation. It is impossible for traders to keep an eye on crypto exchanges and global markets round the clock to achieve better outcomes.

There are a lot of cryptocurrency trading automation possibilities in the form of bots for trading in crypto. They use algorithms to perform trades and execute transactions.

We will be discussing grid trading the trading strategies, grid trading, and the benefits to users.

What is grid trading exactly?

It is among the most well-known strategies for trading in crypto. It involves placing orders above or below a set price with the grid of orders. This strategy involves placing an order that are gradually increasing or decreasing in prices.

This trading strategy makes use of the market’s price fluctuations to determine whether to purchase low or sell high. And, this could be accomplished by placing multiple orders on both sides. The orders filled with items are automatically replaced with the appropriate purchase or sale purchase order as the grid is moved up or downwards.

If a buy order is fulfilled, a selling order will be placed on the gridline above. Also, if a sell order is satisfied, a buy order will be added. The profits from each buy or sell order will be represented in the spaces between the lines.

Trading bots typically employ this method in times when the market is moving sideways and doesn’t have a direction. Grid trading bots cannot reverse gains made previously but rather benefit from the market’s volatility so that they can lock in profits and seize opportunities. Bittrex trading bot is also based on grid strategy.

How grid trading functions

Grid traders set upper and lower limits within the grid in which they execute buy and sell orders. A buy order is executed in the event that the price is lower than the lower limit. The question now is: how does it work? Here’s an example to help you to understand: Let’s suppose the value of XYZ an asset in crypto, is $10,000. The trader can determine a lower price limitation of $59,000, and a higher limit of $10,000. The grid is the region in between the two limits. If the price is below $9,500, a buy order will be put in place, and when it exceeds $10,500, a sell will be made. This is where traders can create multiple sell or buy orders for different times in the grid.

In each grid, the trader has to manually set the price for the lower and upper limit. And, these orders are executed by the trading bots at the pre-defined price intervals.

Profits will be higher The profit margin is higher if the price difference between the grid’s upper and lower limit is larger.

Also, be sure to choose a price range that is suitable for the strategy you plan to implement and then choose the number of grids that you want to have in that particular interval. When you divide the price grid in smaller ones trading, traders are able to make a profitable trade. The more grids there are and the more grids are there, the higher the rate of trading. The type of trading that is offered can be executed at intervals such as 1 minute, 5 minutes, 15 minutes 30, 30 minutes or one hour.

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