Grid trading strategy

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What is a grid trading strategy?

grid trading strategy
Grid trading is an automated cryptocurrency trading strategy that allows placing buy and sell orders at preset intervals around a fixed cost of an asset. Visually, this way of trading resembles a grid, hence the name. Grid Trading works well in volatile and competitive markets such as the crypto market. Grid trading provides profitability every time the sell price exceeds the buy price during a flat movement in the market by automatically executing low buy orders that lead to high sell orders. This fact eliminates the need for market forecasting.

However, a number of important factors must be taken into account for this strategy to work effectively and make a profit in the cryptocurrency market. For example, a good choice for this type of trading is a cryptocurrency pair, the rate of which is characterized by frequent and significant rises and falls.

Why is it worth using a grid trading strategy?

grid trading

  • Reliably.

Grid trading has been around for a long time and is considered a proven and profitable strategy. A huge number of successful traders have been using this method of trading in various markets over the years.

  • Conveniently.                                                                                  

The grid trading strategy is easy to understand and use because it does not require complex calculations, observations, or market data research. This method can be used even by inexperienced traders in the cryptocurrency market.

  • Flexible tactics.

Grid trading uses the most fundamental trading concept (buy low, sell high, and profit from rate movements), so it can be applied to almost any market and make a profit, regardless of the trend or market behavior.

  • Risk management.

This strategy allows the trader to manage risks more effectively by adjusting the risk/profit ratio.

You can use a grid strategy to make consistent small profits with minimal risk by choosing a stablecoin pair such as BUSD/USDT or use riskier strategies to generate potentially high profits by choosing a coin with a low market cap and with big fluctuations.

  • Suitable for automated trading.

Grid trading is ideal for automation due to the fact that all its actions are predetermined and are not related to market behavior. This is one of the best methods for traders wishing to take their first steps towards automation as it can work in almost any market, under any conditions, and can be set to almost any time frame.

How to start using a grid trading strategy via the Cryptorobotics platform?

grid trading strategy

Today, users can implement various trading strategies on the Cryptorobotics platform, including grid trading. This is all thanks to various trading instruments available on the platform. To use the grid strategy, users can set up ladder smart orders.

Ladder smart orders is a trading tool that is designed to open orders in the form of a ladder. This type of order helps to open additional buy/sell limit orders. And instead of buying or selling a coin at a single price, a trader buys a crypto asset when it falls and sells it when the value rises. The goal of a ladder smart order is to enter a trade at the average price of a digital coin, which is more profitable, and then exit it in parts by placing several Take Profits.

Possibilities of ladder smart orders:

  • Open a ladder smart order to purchase a digital asset by averaging the entry price.
  • Set targets in the form of a ladder to sell a digital asset with partial closing on each target.
  • Customize goals in the form of a ladder for sale with the “target trailing” function (rearrangement of the Stop Loss level when the targets are reached).
  • Trailing the last target at a given level.
  • Select Standard Stop Loss or close by a candle.
  • Customization of Trailing Stop Loss.
  • Moving the Stop Loss level to breakeven when the specified parameter is reached.
  • In case of a change in the average entry price, you can set the method for calculating Take Profit and Stop Loss
  • Setting the conditions of sale, which determines the order of purchases and sales in the presence of ladders.

How to start using ladder smart orders in the Cryptorobotics trading terminal?

Cryptorobotics trading platform

  • Go to the “Trade” tab.
  • Select a crypto pair.

Ladder smart order

  • Select order type
  • Customize the entry price and the number of digital assets for the first order.

ladder smart order

  • Click on the +Add order button and repeat the previous step (as many times as you want to divide the purchase into parts).

Grid trading strategy

  • Set leverage (if it is a futures exchange).

Ladder smart order

  • Set Take Profit.

Grid trading strategy

  • Configure two additional settings – trailing targets and trailing distance (optional).

Ladder smart orders

  •  Choose the Calculation method (TP price or TP in %).

Grid trading strategy

  • Customize the Stop Loss level.

Set Stop Loss for grid trading

  • Select the Stop Loss mode.

Choose the Stop Loss mode for grid trading

  • Set the Trailing and breakeven parameters (optional).
  • Select the Calculation Method option of Stop Loss.

Set Stop Loss for grid trading

  •  Choose the Closing Conditions option.

Closing Conditions option

  • Set the Cancel smart order if the price is at the SL or TP level before the order is opened (optional).

Set the Cancel smart order

  • Press the Buy/Long or Buy/Short button.

Start grid trading

  • Start grid trading.

READ MORE: Staking: what is it and how does it work?

 

Alina Sattarova

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