How Grid Trading Strategies Work on all Major Exchanges

TrailingCrypto
7 min readMay 8, 2023

With the prices of crypto assets changing within minutes/seconds and markets operating 24x7, it’s really tough for traders to keep up with the trend. Novice traders/beginners may not be able to react to these changes quickly to take advantage of the opportunities to earn profits from these price changes. Furthermore, delay in making trading decisions further worsen the problem. Fortunately, this is the age of automation. Traders can make use of crypto trading bots to trade and execute transactions.

Grid Trading Bots

If carefully configured, crypto trading bots execute trades automatically toearn profits. One such trading strategy used by expert traders to earn profits from the volatility of crypto markets is the grid trading strategy. This kind of trading can be carried out by utilizing grid trading bots where a grid of orders is created, which further covers a range of potential market movements. Generally, this trading bot places buy/sell orders between predetermined price ranges by constructing an automated trading grid. This kind of trading helps traders to make profits on even small price fluctuations and avoid potential mistakes in both bear and bull markets.

What is grid trading?

As prices of cryptocurrencies fluctuate quickly, seasoned crypto traders rely on trading charts to make trading decisions. However, this could be tough for them to keep up with price changes, resulting in missed opportunities. For traders trading on multiple exchanges, things may get complicated, and constant monitoring becomes really tough.

This is where grid trading strategy becomes important and helpful. Grid trading helps traders in buying and selling crypto within a defined range set by the trader. This strategy is based on the idea that the price of assets will fluctuate within a certain range, and by placing different orders at these points, the traders can earn profits from both upward and downward price movements. This strategy creates a grid where the grid trading bot will work and calculate profitable buy and sell orders.

The best crypto trading platform, like TrailingCrypto, supports this strategy and helps traders to place trades by making use of grid trading bots.

What are grid trading bots and how they work?

Grid bots aretrading algorithms that attempt to earn profits from price changes within a predefined grid range. The trader sets up the parameters for the grid trading bot to function within the predefined range and execute orders accordingly. This crypto trading bot ensures strict adherence to a “buy low and sell high” strategy, providing a reliable and efficient solution for managing trades in the cryptocurrency market.

Grid bots can be configured with different options including grid size, volume of trading, etc. Some of the major advantages of grid trading strategy involve automatic execution of a lot of trades, lesser focus on entry/exit trades, fund management, profit tracking, etc. Grid bots work by setting up buy and sell orders in the predefined range by creating a grid. Choose a price range, and then decide how many grids you want to have. By splitting the price range into small grids, you are more likely to trigger a profitable trade. The more grids you make, the higher the trade frequency will be.

Binance Grid Trading Bots

Whenever a buy order is triggered, a new sell order will be placed and conversely, when the sell order is triggered, a new buy order will be placed. Accordingly, when the price fluctuates between two grids, a trade will be executed with a smaller profit.

Different types of grid strategies to place profitable trades

Different crypto exchanges support grid trading strategies and provide their own bots. Third party crypto trading platforms like TrailingCrypto support all such exchanges and offer grid trading bots. The grid trading works well on the Binance exchange and helps traders make profitable trades.

Let’s have a look at these strategies:

1. Spot grid trading

Spot grid trading is a strategy that seeks profits from market fluctuations by positioning buy and sell orders. The system will place buy order whenever the price of the asset drops, and place sell orders whenever the price increases at set intervals. To create spot grid trading on any exchange, say KuCoin, login to the KuCoin account and click on trading bots. Here you can choose spot grid to create a bot. Here, you may create spot grid trading via auto parameters. Or, you can customize parameters. Here you can also set entry price, stop price, and take profit values via advanced settings.

When grid trading is executed, the system will open a position at the current price, and at the same time, the corresponding buy and sell orders are placed on the grids. Spot grid trading bots work well in the volatile market. Whenever the price fluctuates within the preset range, the grid trading system executes the preset buy/sell limit orders. The more grids you set, the more orders can be executed.

Best Crypto Trading Platform

Binance exchange also supports grid trading, where after logging in, you can click on trade and then select strategy trading. After that, you can select the pair and set parameters. And, based on these parameters, the grid trading bot will start automatic trading right away.

1. Reverse grid trading

This kind of trading strategy works well for bearish market trends. This kind of trading bot is designed to profit from the falling market. It can be better understood as sell first and buy later. Reverse grid trading bot lets you accumulate more coins while the price of assets keeps dropping. To use reverse grid trading, you are required to set some parameters, like:

· Selecting the trading pair and click on the reverse grid

· Setting the lower limit and upper limit for price range, number of grids, and choose grid spacing types

· Choose the amount of your investment to create the bot

After setting all these parameters, you can tap the “create” button, so that the bot can start trading. Let’s understand reverse grid trading with an example:

Set the upper price as 1000 USDT, the lowest price as 800 USDT, 10 grids, 1 BTC as investment. Then, the bot will divide the price range into 10 equal parts within the price range of 1000~800, and 0.1 BTC per grid, and continuously arbitrage between the price ranges to earn BTC.

2. Infinity grid trading

This is a premium version of the grid trading bot, which will help you buy low and sell high. You can either set this strategy manually or automatically. If you choose manual setting, you’ll need to set 3 parameters, including lowest price, total investment, and profit per grid. Let’s understand how it works:

Whenever the current price starts to show an upward trend, this is the right time, especially at the beginning of the bull market, to run the infinity grid bot. This is an amazing weapon for earning USDT, so the infinity grid bot is also worthy of holding for a long time. Here, the bot will keep on performing trades infinitely as long as the price stays above the lowest price. TrailingCrypto supports all kinds of grid bots using different trading strategies.

3. Futures grid trading

This is one of the most popular trading strategies that combine futures trading and grid bots. This trading strategy brings high profits and lower risks. The greater the market volatility, the higher will be the profits.

In futures grid strategy, it helps investors take in profits by presetting the price range for each grid and dividing the funds into multiple portions.The grid bot automates the process by buying low and selling high when the market price reaches the preset prices. Each buying-selling of assets constitutes to an arbitrage process.As long as the market fluctuates up or down, the bot will let you earn profits. This kind of trading strategy supports leverage up to 150x for greater profitability.

Placing trades via a futures grid bot is suitable for traders who want to magnify their earnings via leverage in grid trading. Compared with spot trading, the Futures Grid Bot can help investors earn not only grid profit, but also extra funding fees paid by the long side. This trading technique works well for those who want to go short. Binance futures grid trading bots are popular among traders these days, and the best crypto trading terminals like TrailingCrypto support these bots.

4. Long/short grid trading

Long/short grid trading is a trend-following strategy which allows users to trade with market trends within a grid. All this means that you can open an initial position as per analysis, while placing buy-limit, and sell-limit orders simultaneously at predetermined intervals so as to capitalize on the market volatility.

For a long grid strategy, the traders will have an initial long position opened. Conversely, an initial short position will be opened for a short grid strategy.

Grid trading strategies can be used in trading by all kinds of traders. The traders can take advantage of this trading method for managing their risks and maximizing the profits. This kind of trading strategy works well for those looking for quick returns.

Conclusion

Smart and expert crypto traders make use of grid trading bots for different markets. These bots work on grid strategy. One can use this trading strategy for different exchanges like Binance, KuCoin, etc. TrailingCrypto is one of the best crypto trading platforms offering grid trading bots with different strategies via APIs.

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TrailingCrypto

Cryptocurrency trading tool aimed at unifying all crypto exchanges and providing many advanced order types using bot assistance.