Grid bots have become very popular and quite a few exchanges such as Binance, Kucoin and Pionex offer them as a free service to their customers. For the exchanges it is a way to increase trading volume and liquidity. The trading bots help making the market, this is extremely useful in markets with low liquidity that otherwise would have huge irregular spikes and low activity. As a bot trader you can profit from those irregular price changes while providing volume to the exchange.
Grid bots are very different from the more common bots that are usually based on algorithms involving a combination of technical indicators such as Bollinger bands, RSI, moving averages…etc. Grid bots on the other hand make no assumptions about the state of the market and the direction it will move into they’re only driven by price movement.
What are grid bots?
Let’s look at the XMLUSDT chart.
We can see the price fluctuated within a price range of 0.47 USDT and 0.34 USDT. Rather than looking at technical indicators to find the best opportunities for buying and selling what if we just setup a series of buy and sell pairs along this range. For every buy there’s a mirroring sell order.
Imagine this grid superimposed on the chart as in the picture above. That’s essentially what a grid bot does, place a series of buy and sell orders at the positions of those lines. Grid bots are extremely useful for ranging markets. Frequent and big price fluctuation within the range will lead to a more profitable outcome. Ideally you would select a coin pair that has enough volatility while staying within a clear range.
The Grid bot places a first buy order and continues buying more coins when the price goes down in a similar way a DCA bot does. The main difference however is that the grid trading bot places a mirror sell order for each buy order. A DCA bot will just average down and create one sell order once a certain condition (profit setting e.g. 1%) is reached.
Advantages
One major advantage is the ease of setting up a grid trading bot. You don’t need to know anything about technical analysis (other than being able to identify a range)or programming to create a grid bot. Grid bots are ideal if you want to dabble into bot trading.
To set up a grid bot the first thing you need to define is the price-range, I recommend using the Price Range tool in Tradingview to visualize it on the chart.
The next thing you need is the quantity you want to buy/sell on each level of the grid, in other words the “quantity per grid” and the “number of grids” sometimes called “grid quantity”. Both of these obviously depend on the size of your investment. More grids and higher quantities require more investment. The grid bots form usually does all of these calculations and will inform you interactively to reduce grids and/or decrease quantity per grid to fit your investment.
Some grid bots will even make suggestions based on AI data analysis to assist you in setting up the optimal strategy. Pionex, BitUniverse and 3Commas provide this service out of the box.
Why opt for a grid bot?
Time tested
The strategy has proven itself over time and the crypto market’s highly volatile and fluctuating lends itself well to this type of strategy.
Simple
It doesn’t require any knowledge of technical analysis, indicators, spending hours flipping through charts, signing up with signalers to get the best signals…etc.
Trend independent
It’s not trend dependent and works in any type of market as long as there’s some volatility and a clear range. You can set your range for long or short time frames.
Risks
If you want to avoid risk you can trade stable-coin pairs such as TUSD/USDT or BUSD/USDT.
Budget
On average a budget between $500 and $1000 is required for each trading pair bot.
Gridbots
- Pionex (Free)
- BitUniverse (Free)
- Binance (Free)
- KuCoin (Free)
- Huobi (Free)
- 3Commas (Paid/limited Free)
- TradeSanta (Paid)
- Bitsgap (Paid)
- Quadency (Paid/limited Free)
- Gsmg(Paid)
Pionex
- Pionex was one of first to offer free grid bots on their trading platform. They currently have 7 (or 8 depending your definition of trading bot) available and 6 out of those are Grid trading bots. Most of these are self explanatory with the exception of Infinity grids perhaps. To simplify the latter creates a % based grid that adjust with sudden price increases and isn’t limited to a strict predefined range, this grid bot is ideal if you’re dealing with a more up-trending market.
Pro
- Fee: low fee, 0.05% trading fee for maker and taker.
- 6 different grid bots.
- Most advanced grid trading platform
- no API keys needed, easy setup process
Cons
- Not possible to use their bot on other exchanges via API keys (BitUniverse might be a solution here)
Tip: The Arithmetic Grid or Geometric Grid
Arithmetic keeps the same common difference between each grid, but Geometric keep the same common ratio between each grid.
Arithmetic Grid does the good performance in volatility market with a small price range, and makes more Grid profit.
Geometric Grid does the good performance in the up-trend market with a large price range, and makes more unrealized profit.
Pionex official site: https://www.pionex.com
BitUniverse
BitUniverse pioneered the concept integrated their grid trading bot with different exchanges through the use of API keys. Also has a futures grid bot.
Pro
- Fee: No subscription fee is needed for the trading bot.
- Supports 20+ exchanges via API keys
- Spot market grid bot
- Futures grid bot
Cons
- Less options compared to Pionex
- More time consuming and complex to set up due to API keys
BitUniverse official site: https://bot.bituniverse.org
Binance
I don’t have to introduce Binance it’s one of the leading cryptocurrency exchanges in the world. Binance offers a grid trading bot on their futures market.
This bot longs or shorts on every grid level.
It uses leverage (you can set your leverage level) and your orders can get liquidated using this bot if there are sudden peaks or drops in the market.
Pros
- Fee: 0.1% trading fee for maker and taker. No subscription fee is needed for the trading bot.
- leverage to increase profits
- No API keys needed
Cons
- Only available for futures market
- Risk of liquidation
- Not able to use on other exchanges
Binance official site: https://www.binance.com/en
KuCoin
KuCoin is a well known exchange that started out as a Binance clone in 2017 and offers similar features. It has a wide variety of altcoins.
Pros
- Fee: 0.1% trading fee for maker and taker. No subscription fee is needed for the trading bot.
- No API keys needed
- Classic grid bot, margin grid bot, infinity grid bot and futures grid bot
Cons
- Limited to Kucoin not usuable on other exchanges
KuCoin official site: https://www.kucoin.com
Huobi Global
Huobi is the most famous cryptocurrency exchange in China.
Pro
- Fee: 0.2% trading fee for maker and taker. No subscription fee is needed for the trading bot.
- Grid trading bot on the spot market.
- Welcome bonus of up to 170 USD
Cons
- Limited to Huobi
Huobi official site: https://www.huobi.com/
3Commas
3Commas is a third party trading solution independent of a trading platfrom. it offers a wide range of trading possibilities, it has a DCA bot, a grid bot, options bot, offers social trading (you can copy others), signals…etc. Connects to 21 exchanges.
Pros
- Fee: free but limited to 1 bot, if you want more options and more bots there are paid plans ranging from $29 to $99 per month
- Supports paper trading for newbies (=ability to simulate trading without risking money)
- Ability to use grid bots on 6 exchanges
- more than just a trading bot, complete multi-exchange trading platform
Cons
- More time consuming and complex to set up due to API keys
- Free version is limited to 1 bot
3Commas official site: https://3commas.io/
TradeSanta
Pros
- Grid trading bot on the spot market.
- Grid trading bot on the future market (alpha stage).
Cons
- Fee: $49 monthly subscription fee.
TradeSanta official site: https://tradesanta.com/en
Bitsgap
A third party trading solution independent of exchanges
Pro
- Has their own optimized grid bot that optimizes for profit
Cons
- Fee: $19 to $110 monthly subscription fee depending on features.
Bitsgap official site: https://bitsgap.com
Quadency
A third party trading solution independent of exchanges that connects to up to 12 different exchanges through a unified API. Has different pre-configured trading bots mostly based around technical indicators but also 2 market maker bots and a grid bot
Pro
- Fee: free if you sign up with one of their partner exchanges (Binance, Kucoin, OKEX…etc
- Has an interesting option when price leaves the grid range: “Recreate grid around exit price and continue trading”
Cons
- Fee: $49 to $99 monthly subscription depending on features
Quadency official site: https://quadency.com
GSMG
This one differs quite a bit. It does set up a grid and attaches a sell order to each buy order but it also runs a market analyzer that adjusts the limit orders based on a proprietary algorithm that analyses technical and other indicators and places buys/sells at optimal positions, it can also trail prices to optimise profits and catch deep candlewicks
Pro
- Support for Binance and Bittrex
- More optimized algorithm
Cons
- Fee: 25% of your profit paid in ETH or a paid plan ranging from $15 to $950 /month
- Optimisation process takes a bit of time
GSMG official site: https://gsmg.io
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