Crypto Grid Trading
Easy Crypto Trading Strategy For Passive Income
Why Should You Try It?
- Automated trades
- No trying to predict the market
- Works in short/ long term
- Limited risk & protection (stop loss)
What Is Grid Trading?
Grid trading is a tool that will allow you to make profits by placing multiple buy and sell orders based around a price set price which is usually the current market price.
What results in a grid drawn on the charts by multiple lines which represent not only the different prices levels but also the exact place where the coin will be sold or bought.
This strategy is very simple to understand when compared with advanced models based on technical analysis because it follows a simple concept or statement which is “Buy Low, Sell High”. By using set price limits or lines you won’t need to predict market movements since you will be counting on the volatility to make profits.
Your profit will be the percentage change in between the upper and bottom line (buy and sell order).
How To Start Grid Trading?
There are huge amounts of information out there… so I’m going to keep this short and focus only on the tools used by myself and displayed on my YouTube channel.
If there are no funds in your exchange you will need to buy some or use Coinbase and then transfer it to your exchange (LTC has cheap transaction fees).
We will be using a software or bot instead of constantly monitoring and creating the orders manually to take advantage of the market volatility (this market keeps going 24/7). The ones I recommend are BitUniverse and Bitsgap.
BitUniverse is a very good free alternative. There’s no fee whatsoever, all you need to do is link it to your crypto exchange using your api keys (mine is Binance), and you are set. The disadvantage being that you won’t have a lot of advanced features such as trailing up and take profit and there’s no native function to see the grids on the chart.
Bitsgap is a paid platform which offers not only a trading bot but also arbitrage opportunities and trading signals. Basic plan starts at $19 with a free 14-day trial and unlimited demo account. Just as BitUniverse it uses the exchange api keys to execute trades (secure because it can’t withdraw or move money around)
I recommend you use Bitsgap if you can afford. If not, you can still use it to visualize the grids, get recommended settings and then copy/paste them into BitUniverse.
To start a bot with real money you will need to have funds on your exchange beforehand and then input your bot settings.
In Bitsgap all you need to do is:
Choose a strategy.
Sbot – Better for bull markets (price moving upwards in the long term)
Classic – Better for sideways markets (price is going up and down without any significant down or uptrend)
You can easily spot what market a certain coin is in by using a tool called cryptopanic. Just look at the right, choose a coin a see the direction of the line on the chart.
Select the exchange of your choice.
Select the coins you want the bot to trade.
Example: ADA/USDT will trade ADA to accumulate/earn USDT.
Change Investment value
Choose the amount you want the bot to use.
And then it will give recommendations for the other parameters.
If you want to use BitUniverse just like me, just copy/paste the settings from Bitsgap to it when creating a manual grid trading bot on the Trade tab.
Grid Trading Pros And Cons
- Simple and easy to understand strategy.
- No need to constantly monitor the market (can work for hands-off trading!)
- Low downside and limited risk.
- Take advantage of market volatility to make profits.
- No signals based on technical indicators that might fail.
- Bad strategy for Bearish markets (you might hold bags for a while if you choose small cryptocurrencies).
- Won’t use all the funds available for some instances, and you might need to tweak the price range to get the most out of it.
- When using a lot of grids, the investment will be higher, and you need to be aware of trading frequency (although fees might not be that high).