One of the frequently used types of crypto trading bots in the crypto market is Grid Bot. The main principle of the Grid bot is the same as that of the Dollar Cost Averaging (DCA) bot. The grid trading bot places the first buy order, and if the price moves in the opposite direction, it places additional orders. The main difference is that each buy order will place a take-profit order separately. Unlike DCA robots, which place a take-profit order for all executed buy orders.
Connected exchanges
When the Grid bots trade, every buy order will place a sell order. If you have 4 buy orders, a total of 4 sell orders will be placed. Therefore the algorithm will place the grid of limit orders scattered on the same distance from each other. If the robot executes a part of the order, it will set a take profit order for that part.The Grid robot has a continuous closed loop of work. In other words, once the robot closes all sell orders, it will place a new buy order and start a new cycle.
First of all, you will need to identify the trading range of the asset, selecting the lower and upper limit of that price range. Then you need to determine the entry point, the trading volume of the first order and additional orders, the take profit percentage, and the price step of additional orders.
Grid trading crypto bots can use different indicators to determine the entry point and the channel range like Bollinger, RSI, and/or MACD indicators. If you do not use any signals, the robot will continuously place orders and start a new trading cycle immediately after the last sell order is executed based on the previous settings. If you do not have enough time or experience to trade with the grid bot then your best option will be to use the crypto copy trading platform to assist you with trading.
To create the fully automated grid strategy, you will also need to select the stop loss level when creating a trading script. When the unrealized loss reaches the value you set in the stop loss field, the stop loss will be activated and the robot will sell the unsold currency at the market price. After the stop loss is executed, the robot will stop selling.