Grid trading is one of the more popular and profitable methods to automate trading behavior. However, even though the concept has been around for a while now, improvements are still made. Both SBot and a classic bot work well, although SBot provides some crucial advantages.
The Popularity of Grid Bots
Grid trading revolves around placing orders above and below a set price. That approach creates a grid of orders for traders to open and close market positions. Moreover, it is viable to capitalize on traditional price volatility through regularly placed buy and sell orders. In addition, the concept of grid trading extends to the cryptocurrency industry, allowing users to take advantage of small price movements.
As grid trading relies on placing many orders, one can automate the grid bots. These bots will let users determine their strategy and intervals to create buy and sell orders. In some cases, grid bots have built-in strategies optimized for profit potential. Additionally, certain providers may rely on machine learning to enhance their strategy over time, bringing more revenue to the users.
Users can enhance grid trading by using the correct fractals. By default, all financial markets are fractal, creating repeating price patterns across different time scales. Figuring out the correct fractal can enhance the market returns for users. Moreover, grid trading bots need to be set up to look for these fractals and enhance the profit potential for their users.
Several crucial settings apply when dealing with Bitsgap‘s grid trading bots. Understanding these parameters is essential, as they can differentiate between a profit and a loss.
- Take-Profit: the maximum crypto price for your trade, allowing a grid bot to sell all positions.
- Stop-loss: the lowest price for your trade at which you automatically exit the position (at a loss).
- Trail Upward: allows the bot to follow an asset; price in an uptrend, dynamically adjusting the grid as prices evolve.
- Trail Downward: Trailing the price in a bear trend and adjusting the grid dynamically as needed.
These parameters work well for basic grid trading, although they do not consider all market conditions. Cryptocurrencies are notoriously volatile, and it is challenging to make money during intense periods of volatility. Choosing a currency with a substantial trading volume can make that process a bit easier, though.
Using The Classic Bot In An Uptrend
The Classic Bot provided on BitsGap introduces an excellent profit opportunity when markets are uptrend. Its primary purpose is to trial the price and adjust the grid range accordingly. In addition, the bot buys and sells the same quantity of assets to maximize gains during bullish market conditions.
The investment distribution logic achieves greater market exposure as prices go higher by increasing the total invested during the rally. Of course, it requires a bit more investment, but that can lead to much bigger profits when the market trend is favorable. Unfortunately, it can also trigger bigger losses if the market suddenly sours.
SBot Is For Sideways Trading
The SBot grid trading solution by Bitsgap takes things one step further. It is a versatile tool when dealing with sideways market momentum and prices seem to remain within a specific horizontal range. Users can set the bot to trail upward or downward and backtest their approach before letting SBot put funds at stake. Moreover, it limits how much money is spent per purchase, which can benefit during uncertain conditions.
One crucial aspect is how SBot sells and buys a fixed volume of the quote currency per order. Sticking to an equal investment sum provides numerous benefits, either bullish or bearish conditions. For example, a falling price lets SBot buy more currency, whereas a rising price yields to selling fewer coins and a lower market impact. Therefore, the investment distribution logic of SBot used dollar-cost-averaging to provide optimal results.
While both SBot and the Classic bot have tremendous potential, traders still need to acknowledge market fractals and overall sentiment. No market is only in an uptrend or sideways trading, and other conditions include explosive growth and steep declines, both of which require users to adjust their grid trading accordingly.
Bitsgap makes it easy to switch between grid trading bot types to help users adjust their strategy over time.