GRID Bot is a very versatile trading tool. It’s simple, effective, and useful for various kinds of different markets, situations, and trading strategies.
If you’re still wondering what’s the benefit of using a Grid Trading Bot, the below article might helps before reading this one.
If you’re already using a GRDI Bot, here are some examples of use cases for the Grid Bot.
Ultra Long Term – Wide Range Grid Bot
If you don’t want to hassle around with checking price charts, crypto news and or adjusting your portfolio every day, create a normal Grid Bot with a very wide price range (like 5k – 20k for BTCUSDT) and keep it running for months. You will earn a small, but steady profit with low risk and next to zero effort.
The best part of it: On those high volatility days, when prices suddenly move 10-20% in an instant, all the other traders will freak out and start to worry, while you can sit back and relax, knowing that your Bot just made some profit.
Long-term traders who create Grid Bots with a very wide price range from $2,000 to $20,000; Arbitrage traders who configure their bots to make thousands of trades per day, so they can profit from all the tiny fluctuations in the market; Long and Short position traders who use bots to DCA their buys and sell, while they follow the market trends; And aggressive traders, who pursue high short term profits by increasing risk with Leveraged Grid Bots……
Stable/Stable – Grid Bot
You can run a Gridbot on 2 Stablecoins like USDT/BUSD or USDT/DAI.
Since all those coins are bound to the dollar, they always stay close to a price of 1.000, but they all fluctuate a bit. Sometimes, one coin is worth more than 1.000 while the other is worth a bit less. These differences are very small, but they exist, and that fact can be used to generate profit.
Of course, the profit won’t be very high, but since those coins are always fluctuating near 1 you can use a very tight price range, and the price won’t leave it. That means the Grid can run basically forever! It’s an excellent way to earn a steady, small stream of profit with basically zero risks.
- Can run infinitely, since it’ always within the same price range
- Pushes trading volume, which is good for market makers or fee discounts
- Very simple settings
- Nearly zero risks of losses
- Profit is tiny
- Trading fees play a significant role and eat up most of the profit
Accumulation/Distribution – Grid Bot
When you want to increase your holdings of an asset currently on a downtrend, you have one problem: Should you buy it now in case the price reverses soon, or should you wait because it will drop even further?
A Grid Bot can help you to solve this problem. Just choose a price range with much room downwards. The Lower Limit should be far below the current price, while the Upper Limit can be very close, or even be the current price.
The Bot will buy more and more, cheaper and cheaper the more the price is going down.
This not only gives you a perfect average buying price, regardless of where it bottoms out, but it will also make sure that you don’t:
- Buy in too high early, just before it drops even more.
Because you were scared, you might miss the opportunity if you wait longer.
- Miss the opportunity to buy, because you keep waiting for it to drop even more.
Just to see the price pumping back up, after the bottom was already reached while you were waiting.
This can be used in both Directions, so If you want to decrease your holdings of an asset, which is currently on an uptrend. You can also do the exact opposite: Choose a far Upper Limit and
Low Liquidity – High Spread Grid Bot
On some exchanges, you can easily find pairs of small and unpopular coins with a small market cap. Most traders never heard of these coins, so the liquidity is low, and the order book is thin.
This might sound like a bad thing in general, but it can also be seen as a great opportunity
If you search a bit, you can easily find pairs with 5-10% price spikes multiple times a day.
So, even though not many trades are happening on pairs like these, each time a market order is made, it can massively change the price.
You can set up a Grid Bot to provide liquidity and become the pair’s market maker.
When you configure the Bot, make sure it has:
- a big price range
- not too many grids (3-7)
- A lot of space between the orders (profit per grid = 2-5%).
If your Bot up is running when someone makes a market order, it will fill one of the limit orders of your Bot most of the time. And because your orders have a big spread, each filled order earns a lot of profit.
Catch the Spike – Volatility Mining Grid Bot
Sometimes you will read a big announcement, hear of an upcoming event, or find other useful info of one specific asset. Things like these, repeating patterns, and various other sources can give you a clear indication when a particular pair experience increased volatility, which makes big price moves likely.
If you know significant volatility and price spikes will, you can set up a Grid Bot in advance to profit from that. Use either 3, 5, or 7 orders and choose an optimistic price range with the current price in the middle.
Once the volatility comes in, the price might pump 15%, it might dump 11%, or it even makes multiple moves like that within a few minutes. If you choose a good price range, the Bot will “catch” all of those spikes, earning you a sizable amount of easy and fast short-term profit.
Provide Liquidity – Market Making Grid Bot
Market Makers are a particular form of traders. Usually, they own a large number of funds to trade with, while they pay no fees or even earn fee rebates, and some are paid or even get paid for providing a market with liquidity.
As a market maker, you only use limit orders very close to the current price. The goal is to fill the order book and create as much trading volume as possible.
Getting paid to become a Market Maker is something not all traders are able to do.
But those who can need Bots to make orders continuously, and a Grid Bot with a very tight range can help with that.
Where can I use GRID Bot?
Pionex Exchange is the world’s first cryptocurrency exchange that provides trading bots for free within the exchange. Currently, there are 9 different trading tools and each of them has its own scenario for assisting your daily trading.
Grid Trading Bot is a nice tool in different market conditions. Share with me how you used the bot!
what is the difference between an arithmetic and a geometric grid? explain the difference between them, and each one to which type of market would be most valid.
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“This can be used in both Directions, so If you want to decrease your holdings of an asset, which is currently on an uptrend. You can also do the exact opposite: Choose a far Upper Limit and “
Would it be possible to give a few examples of pairs which can be used for the ‘Low Liquidity – High Spread Grid Bot’ strategy (which are available on Pionex exchange)? Thanks in advance!
Actually that’s more for some other exchanges that don’t have that much liquidity. Cause Pionex aggregates the liquidity from Binance and Huobi, so I think you can’t use this case on Pionex.
bro can you tell me were to look, for market making strategies? im aware that I can use tigh grids with hi volume of cash. but what else? its just like that? on telegrams said that for being market maker needs 100k. who can i talk to?
Hello, please refer to this article: https://pionex.zendesk.com/hc/en-us/articles/360041226753-Pionex-Market-Maker-Program