Grid Bots
Price-delimited continuos bot
Unlike algorithmic bots like Mudrex, grid bots are tools that trade continuously in a price range: you set a strong level of support and resistance, then you set the number of grids that overlap with the price. At these temporary levels, the bot buys and sells if the price decrease or increase respectively. In the sections below, these words will be self-explanatory with some screenshots.
Before explaining how these tools work, it must be said that Bitsgap, Bituniverse and Quadency (and Mudrex) are software that connects to exchanges with API keys, while Pionex and Kucoin are exchanges that incorporate grid bot features. Personally, now I use Pionex most often than these others because of the variety of tools it offers in one place.
Bitsgap
This is the first platform I used to create my first grid bot. It is different from the others because offers:
1) a backtest tool on the last month (instead of one week like others); 2) a demo version to try out all the combinations of bot you want in live run.
It has other futures like smart trade (setting buy limit order, take profit, and stop loss at one time), graphical grid set with sliders and trailing up-down futures: the first ones can be used also in Pionex and Quadency, the second one is available only on this platform.
Personally, I use this platform only in demo mode because other platforms are free.
Once selected the pair, there are two options: the AI strategy and manual strategy.
The AI studies the results of the last month and recognize the most important levels of resistance and support. Consequently, the AI choses the optimal number of grids.
I always prefer the manual strategy because you can better optimize the settings. I can choose the top and bottom levels and the number of grids manually. For example, I prefer long-term bots, for this reason I used very strong levels of support and resistance, and a grid number that gives about 0.50 and 1% of profit for each level: this grants you a good profit despite of the exchange trade fee in relation to the volatility.
As you can see, you can choose two different kinds of bots: simply put, the S-bot uses a different way to space out the levels, and seems to work (as developers say) better in ranging markets. I think that this statement is true, but the results you obtain are pretty the same. Anyway, the same option can be found in Pionex (arithmetic and geometric spacing, that is S-bot). Personally, I use always arithmetic spacing, that grants you the same % of profit each grid.
Pionex
This is the exchange that I currently use to speculate on crypto market: it offers any kind of grid bot, also margin trading bot, DCA bot, reverse grid bot and smart trade bot. I’ll show you these in details. My referral code for fees discount is:
- 1mgdbqhF - or click here
Simple grid bot
The simple grid bot works as well as the ones that I explained in the sections earlier.
If you invest a lot of money (>= 1000 dollars), the slippage control could be useful to limit the trade loss (proportional to the capital you invest).
Margin grid bot
The margin trading bot is similar to the the simple one, but offers shorting and liquidation margin settings. There is also a simple leverage option, here is well explained the difference: the main difference lies in the collateral. With the leverage grid bot, you go all in. You invest your money and if it falls you lose and if it rises you win. So, the leverage grid bot invests your collateral. The margin grid bot keeps your collateral and does not invest it (source).
DCA bot
The DCA simply automate the dollar cost averaging strategy: it buys periodically the crypto you've chosen.
Reverse grid bot
Simply put, the reverse grid bot is an accumulating bot for the bear market: it sells (if you have any) first and buys later at lower price. It’s similar to DCA bot, but sells in the market spikes to take some profit.
Smart trade bot
Personally, I think every exchange should implement this bot: you can set limit buy, take profit and stop loss of your trade beforehand. This feature can’t be found nor in Binance neither in Kucoin, that are the exchanges I use frequently. I think this tool is essential for swing trading, without waking up at night to set take profit and stop loss.
Bituniverse
This platform offers simple grid bots like Bitsgap with less options, but it is completely free. The interface is simple.
This works as well as the other simple bots, but doesn’t offer the features of Bitsgap. Personally, I don’t like the trailing up feature of Bitsgap because gives me lesser control of the market, so I stick up with Bituniverse.
In addition, this app offers portfolio tracking feature: you can track with multiple APIs your portfolios and check the global market cap.
Kucoin
This is a very good exchange mostly because it offers minimum trade of 0.01 dollars, for this reason you can run bots with a few dollars. Apart from this, it works in the same way as Bituniverse does.
Tips about grid bots
The pairs that I trade more often are the leveraged token on BTC and ETH: they follow the price of the respective futures, for this reason they offer good volatility and (in my opinion) greater predictability in identifying supports and resistances with respect to the altcoins.
It is very important to set a strong support level rather than a resistance: you can always reset the bot if the price goes over the resistance level, while if the price goes down your support the bot:
1) does not work anymore; 2) you are in negative profit, and it hurts selling; 3) you must wait indefinitely before it works again and gains profit, if ever reaches that zone again…
That said, I always set my resistance level 2 or 3 levels beyond the usual one. I’m talking of a support resistance on the daily chart!
Some of you may object with “you can always use stop loss”: believe me, it appears like a safe feature, but most of the times you only cut your profits. If you set the support level wisely, the price will return in the area you chose most of the times. I know these words sounds like crazy, but this is my personal opinion.
Use brokers that allows you to trade with minimum units: this is the case of Kucoin, you can buy as little as 0.01 $ of that crypto, despite of Binance, where the minimum is 10$. In this way, you can start (decent) grid bots with a minimum approximately of 100 dollars.
Sometimes, I trade pairs that are less liquid than the usual ones: for example, BTC-DAI seems to grant larger profits in respect of BTC-USDT. This is perfectly normal, because grid bots are fast enough to take advantage of “jumps” that are part of less liquid markets.
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