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Bot Crash Course — Grid Bots

Trading bots
Bot Crash Course — Grid Bots

1. Grid bots introduction

The core concept of grid bots is to buy low and sell high in stages within a specific price range in geometric/arithmetic mode. When the price drops to the lower limit of the grid, a buy order is executed. When the price rises above the upper limit of a grid, a sell order is executed instead. Through this constant buying and selling, the bot will accumulate profits during market fluctuations.

2. How to enable your first grid bot

  • Step 1: Set a price range

To get started, you need to set the highest price and lowest price. Within the range, the system will automatically place buy orders and sell orders based on the grid settings and wait for the transaction to be triggered as the price fluctuates.

  • Step 2: Set the number of grids and quantity per grid

The price range will be divided into several grids based on the number of grids you set, which will directly impact your profit per grid.

  • Step 3: Set the take-profit and stop-loss price or a percentage (this is optional)

By setting a take-profit price, the order will be triggered and automatically ended in order to take profit once the coin's price reaches the take-profit threshold. By setting a stop-loss price, the order will be triggered and sold entirely to stop incurring losses once the coin's price reaches the stop-loss threshold.

Note:

Beginners are advised to use the AI recommended parameters. This feature automatically calculates the grid parameters (highest price, lowest price, and number of grids) with the highest ROI based on back-testing of the last 30 days of historical data. You simply need to fill in the investment amount to create a grid bot.

3. When is the right time to enable a grid bot?

We recommend finding the best grid start time. Ideally, try waiting until the asset's value hits the bottom or a bear market emerges. Under such conditions, you won't suffer significant losses even if the price falls but can make strong profits when the price rises.

4. Configuration of grid positions

Grid trading focuses on profit accumulation. We don't recommend users open large positions as this may lock up their funds during market fluctuations. The entire investment in a grid bot should not be more than twice that of a normal position.

If you usually invest 1000 USDT into one position, then to control for risk, the optimal investment for a grid bot is no more than 2000 USDT.

5. How to choose the right coins?

  • Mainstream coins should be your first choice. They have a higher trading volume and better liquidity, which makes it easier for you to seize opportunities to profit.

  • Coins with high volatility are also a good option. Choose coins with relatively spread-out fluctuations for grid trading.

Note: If you are a beginner, it is recommended that you choose mainstream coins, such as BTC/USDT and ETH/USDT. As an experienced user, you can explore high-volatility crypto for grid trading.

6. How to determine coin volatility?

You can look at the change percentage displayed on the candlestick chart. Monitoring the candlestick chart trend for the past seven days should be enough to tell the recent price change percentage of a particular coin. Remember, grid trading works best for coins with higher volatility.

7. How to set the number of grids?

The number of grids used can affect your trading frequency. Using too many grids can result in an undesirably high trading frequency, while using too few grids may cause orders to remain unfilled for long periods of time. The higher the trading frequency, the more trades are executed. Hence, the profit for each grid will be reduced and transaction fees will increase. As such, it is crucial to adjust the number of grids to make more profits.

8. How to effectively set the price range?

If you want to maximize profits, the key is increasing the profitability of each grid, so it becomes particularly important to set a reasonable price range.

For intraday traders, for example, the price range can be determined as follows: (highest price in the range = daily resistance level) and (lowest price in the range = daily support level). It is worth noting that when the price exceeds the price range upper limit set by the grid bot, the bot will no longer generate any profit.

9. What is trailing grid?

Trailing grid is one of the latest advanced features on Bitget. When enabled, the upper and lower limits of the grid range will automatically move up as the average price increases. With the trailing grid feature enabled, the grid range adjusts upward as the price increases, providing arbitrage opportunities and allowing you to capitalize on favorable market conditions, thereby maximizing your profits.

10. Grid bot HODL mode introduction

  • When you're bullish on a crypto for the long term, this mode allows you to use the profit generated from grid trading (grid profit >= minimum single trading volume) to buy the crypto at market price and hold.

  • When the grid arbitrage profit doesn't reach the minimum limit to place an order, the system will temporarily hold the profit and buy the crypto at the latest market price only when the profit reaches the minimum amount.

11. Long grid trading vs. short grid trading vs. neutral grid trading

Grid type

Long

Short

Neutral

Introduction

Go long and profit when the price rises.

Go short and profit when the price falls.

No predetermined price change is set. Go long when the price rises, and go short when the price falls.

Applicable markets

Fluctuating bull markets

Fluctuating bear markets

Sideways markets

When the price rises

Place short positions to balance

Place more short positions

Long

When the price falls

Place more long positions

Place long positions to balance

Short

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larkLogo2023-11-27
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