This strategy works best when there is no clear direction and a wide market. Grid trading with a bot is more effective than manual trades because it doesn’t have to do with market behavior. This strategy is very popular among crypto traders because it can be set up in an automated manner and run 24 hours a day. Traders can earn a profit while not having to keep an eye on the price movements.
You can choose your strategy and control the risk/reward ratio better than any other trading bots. The price range you select and the number grids you choose will determine the frequency and duration of your strategy. The bot is able to take advantage of market movements and place orders as soon as prices fluctuate. Either you choose to trade stablecoins for consistent profits or go for higher-risk options like trading low-cap coins.
Bitsgap offers two popular grid bot strategies, Sbot and classic. You might be unsure which option to choose if you’re new to the grid bots or are planning to use them in the future. Here’s how it works!
What is Classic bot? When should you use it?
Classic strategies involve buying and selling a fixed amount per order of base currency. Automated action is based on market fractals and never exceeds the limit you set.
Let’s say you have ETH as your base currency and 10 ETH set as your limit. To book profit at different levels, the bot will sell 10 ETH. It will also buy 10 ETH at preset levels when the price falls. This allows you to feel in control, even if the algorithm is running.
This strategy works best when there is a strong uptrend. Classic bots have a better track record in rising markets than other strategies. This model’s investment distribution logic gives you better exposure when the price rises.
What is the SBot strategy like?
SBot is an evolution of the Classic bot that uses a different investment distribution logic. You can also set a limit for the use of fiat (the quote currency) to buy and sell virtual assets. The SBot allocates your investment equally across the grid using buy and sell orders, so the investment amount remains the same as what you have chosen.
If you want to buy and then sell ETH, with a quote currency limit 100 USD, the bot can make a purchase of this amount every time the price of ETH falls. It will also sell $100 worth ETH every time the value rises.
This strategy is most effective when the market moves in a vertical range. It also uses the Dollar-cost-averaging method to help you accumulate the cryptocurrency and generate profits in base currency.
Each strategy has its merits and disadvantages. Market fractals can help you to switch between your options. These bots give you a better picture of market risks, and can help you predict sharp declines or explosive growth. To maximize profits in volatile conditions, the bots can be interchangeable!
