What is Grid Trading Bot?
Grid trading bot is a trading program in which users can automatically buy low and sell high in a specific price range through the program. In the volatile digital asset market, the use of grid trading bots can avoid erroneous trading decisions caused by human factors to a greater extent. The grid trading bots will assist you in strictly implementing your own setting of low-buy-high-sell trading strategies.
Grid trading bot creation steps
First open the Pionex APP, click the “Trade” button at the bottom of the page, then click the “Bot” button at the top of the page and select the type of token you want to trade, then click the “Create a bot” button at the bottom right corner of the page, and a window will pop up just select “Grid Trading Bot“.
AI strategy (the easiest way to create a bot)
AI strategy: The system will intelligently recommend the grid bot parameters most suitable for the current market based on the backtest data of the past seven days.
If you are using a grid trading bot for the first time, it is recommended that you can use the Pionex AI strategy to help you formulate grid bot parameters. You only need to choose how much money to invest to create the grid trading bot.
If you want to set the bot parameters by yourself, then you can choose this mode for setting.
Upper limit: When the price is higher than the upper limit price of the interval, the bot will no longer execute orders outside the grid interval.
Lower limit: When the price is lower than the lower limit price of the interval, the bot will no longer execute orders outside the grid interval.
Grids: Divide the interval upper limit price and interval lower limit price into corresponding shares.
Total investment: The number of assets planned to be invested in the grid strategy.
Advanced settings: Advanced grid parameter settings, you can set by yourself or default system settings.
- Trigger price: When the currency price reaches this price, the bot order will be triggered and created. (For example, the current price of ETH is 3000USDT, and the trigger price is set as 2000USDT. When the price of ETH reaches 2000USDT, the bot order will be triggered and created)
- Stop loss: When the currency price drops to this price, the bot order will automatically closed and the spot locked by the bot program will be sold.
- Close bot at: When the currency price rises to this price, the bot order will automatically closed and the spot locked by the bot program will be sold.
- Slippage control: To control the deviation of the final transaction average price of initial order and the price at the time of placing the order within a certain percentage range through parameter setting. (Due to the large volatility of the cryptocurrency market, when traders are trading, the final transaction price is often inconsistent with the price when the order is placed. At this time, you can control the slippage by opening the order limit price)
- Grid mode-Arithmetic: When creating a grid strategy, the price interval of each grid of the arithmetic grid is equal (for example, 1, 2, 3, 4)
- Grid mode-Geometric: When creating a grid strategy, the price range of each grid of the geometric grid is proportional (for example, 1, 2, 4, 8)
- Investment-USDT Only: Only use USDT to create the grid bot.
- Investment-Both: You can invest the dual coins in your account at the same time to create the grid bot (for example, when you select the BTC/USDT trading pair, you can simultaneously invest with BTC+USDT two cryptocurrencies to create the grid bot)
Taking the ETH/USDT trading pair as an example, the setting parameters are:
The highest price in the range: 10000 USDT Lowest price in the range: 1000 USDT Grids: 500
Grid mode: Arithmetic Investment amount: 1500USDT
After the bot is successfully created, the bot will buy a certain percentage of the spot at the current price and place a sell order above the current price; at the same time, a certain percentage of USDT will be reserved to place a buy order below the current price, and the bot will continue to running within the price range. Make frequent arbitrage by buying low and selling high.
When the price rises above 10000 USDT or falls below 1000 USDT, the strategy will be suspended; when the price returns to the range, the strategy will resume operation.
Explanation of bot Order Terms
Investment: The amount of money invested when the grid bot is created
Total profit: Grid profit + Unrealized profit
Grid profit: Grid bot buys low and sells high for arbitrage profits
Unrealized profit: (Current price-position purchase cost) * number of bot tokens held
Grid annualized: [(Grid profit/Investment)/(Lasting time/365)]*100%
Total annualized: [(Total profit/Investment)/(Lasting time/365)]*100%
The risks of Grid Trading Bots
- If the price falls below the lower limit price of the interval, the bot will not continue. When the price returns above the lower limit price of the interval, the bot will continue. If the user sets the stop loss price, the stop loss price is triggered , The grid strategy is terminated.
- If the price exceeds the highest price in the set range, the bot will not continue. When the price falls below the highest price in the range, the bot will continue. If the user sets the close bot at price, the close bot at price is triggered , The grid strategy is terminated. However, due to strategic reasons, you will be short in the face of this rising market and missed trading opportunities.
- The use of funds is not efficient, because the grid strategy will place an order based on the price range and the number of grids set by the user. If the user sets the number of grids too small, then if the price is at the two points set by the user if it fluctuates between time, the system will not automatically place an order.
- During the operation of the grid strategy, if the currency encounters unpredictable circumstances such as suspension or delisting of the currency, the grid strategy will be automatically suspended.
Find us on