When it comes to cryptocurrency trading through automated bots, grid strategy stands out to be one of the most popular approaches. But if you have never used grid bots, to begin with, using this approach can seem intimidating.
But using a bot for grid trading is not that difficult when you know what to do. From setting up the bot to executing your strategies, you can get the most out of this practice with key points in mind. This gives you a way to benefit from grid bots in the same way that seasoned cryptocurrency traders do, but without having to go through significant difficulties that novice traders often face.
When you are launching a grid bot, the most important points include setting up the percentage of bot step and the number of grid levels. By taking care of these aspects, you can use your bot to maximum advantage.
To help you manage these requirements in an optimal manner, here are the best step and level settings for a grid trading strategy.
✔️ What Type of Grid Bot Settings Are Available?
Before you start modifying the step and level settings for your crypto grid bot, you need to explore the main settings. These main settings relate to foundational factors that decide the operation and execution of your grid bot. Due to this reason, it is crucial that you set them up before moving forward with the advanced yet just as important step and level settings.
Price Range
This setting is usually determined by your pair support as well as resistance levels. Since grid trading best works in sideways or volatile markets, you should set a price range that matches the market, while also protecting your interest or controlling your risk. You can easily make this decision by studying the market that you are going to make your trades within.
Investments
Investments are purely based on your risk management strategy and how much amount you want to utilize through your grid trading bot. As a rule of thumb, you should only put aside as much amount for investments that you can easily afford to part ways with. This ensures that even when you incur losses, they don’t affect your livelihood.
As mentioned above, these two settings lay down the foundation of your grid bot and how it operates for your trading strategy. But these aspects are also relatively easy to set up. In contrast, the step and level settings are more complex. That is why it is important that you pay just as much attention to them.
⚙️ How to Set Up Bot Step and Levels Settings?
Before you learn about the grid bot step and levels settings individually, it is important to remember that these settings are connected to each other. As such, their overall execution depends on how the other segment has been set up within your grid bot.
It is because the more levels you decide to create, the less would be the grid step. This also means that if you have a higher step percent, it will indicate that your bot is executing trades less often. In contrast, too few steps will lead to too fast execution and more fee payments.
Be Methodical in Setting Up These Factors
Whenever you are setting up your grid bot, you have to make sure that you choose an informed approach instead of planning your strategy on the fly. This allows you to steer clear from inadvertently affecting one of these settings when you are trying to manage the other one on your own.
Choose Step As the Primary or First Setting
When I set my grid bots, I choose step as the primary setting out of the two. In turn, I try to configure it somewhere between 0.5% and 1%. After I have set up the step percentage, the number of levels is automatically adjusted within the trading range.
Widen the Price Range As Needed
It is also important to remember that if you want to extend the number of levels and keep the step percentage on the current values, then you need to make the trading price range wider. This allows you to manage different settings without affecting one more than the other ones.
Trailing Up and Down Features
You can also extend the number of levels by using the bot trailing feature. Once the price of the asset starts growing, trailing up will be moving the trading range higher. Trailing down works in the opposite fashion, and moves the price range lower if the price is falling.
Keeping these factors in mind lets you become more careful about the step and levels settings for an ideal grid trading strategy. However, it is important to remember that when it comes to setting up a trading bot, whether it is a grid bot or not, there is not a set recipe to success. You may have to tweak a variety of settings a few times until you reach the perfect mix that works for you.
With that being said, you should still obtain all the information that you could regarding these settings. By following best practices, you can stay away from any preventable issues in the long run.
👍 How to Set Up a Grid Bot Right?
In order to set up a grid automation the right way, you need to pay attention to more than just the foundational or the advanced settings. That is where the best practices of managing a grid bot come into the picture. By keeping these points in mind, you can avoid major problems and avoidable losses on the way to trading your cryptocurrency.
Pick the Right Pair
Managing your grid bot for optimal performance goes beyond the very basic settings. The process also includes the consideration of the trading pair that you want to move forward with.
In order to make the most out of your grid bot strategy, use a trading pair that is moving sideways or showing an upwards trend in its pricing. This gives you more opportunity to capitalize on the pair’s market demand.
Indeed, what you want to make sure to do is to capitalize on the pair’s market demand.
Choose the Price Range
After you have selected a trading pair, it is time to look into choosing a price range. This particular step is all about setting the tone and frequency of your trading bot.
It is extremely important that you choose your price range with careful consideration. This also has an influence on the support and resistance levels, which is essential to the overall efficacy of the bot.
Set Up Your Grid Step
After you are done with setting a price range, you should determine the grid step as your next plan of action. You will have several options here. But it is important that you don’t go overboard on this strategy.
For optimal results, set up a grid step between 0.5% and 1%. This provides you with an ideal balance between your buy and sell orders. You can make your decision based on market movements.
Keep an Eye on Levels
Once you set up the grid step, you don’t actually have to do anything on the levels settings. Since levels are interconnected with grid steps, they get adjusted automatically after you have chosen the grid step.
However, it is still a good practice to keep an eye on the levels settings. This tells you how exactly your grid step decision is affecting your overall grid bot’s execution.
Make a Decision About Trailing Features
Trailing features are important if you want trailing to move the trading range higher or lower during different points of activity. It also helps to remember that trailing down moves the price range down for a pair that is dropping in price, while trailing up increases the price range for a pair that is increasing in value.
Depending upon your trading risk factor as well as your personal preference, you can decide to activate trailing features if they specifically speak to your requirements.
Choose a Budget for Your Bot
Finally, you will need to move forward with choosing a trading budget for your bot. It’s important to remember that the more levels you have, the more money your bot will need to launch. This makes sure that you are only trading within a range that fits your overall trading expense.
This is where you will seriously think about the level of investment you want to have for your automation and trading strategies. It is essential to be critical when thinking about this aspect because of your goals.
You should consider choosing a budget that fits in line with how much trading amount you can muster up. While the goal here is to maximize your ability to generate profit, you should also be aware of the possibility of inflicting losses.
That is why you will notice that more people will look at it from a risk management level. The idea of risk management is critical because you want to make sure to gain more value as you participate in the market and not burn the initial principal that you start with.
📢 Conclusion
Let’s face it. You are not here to play games. You want to ensure to increase your overall value and ensure to obtain the most bang for your time, efforts, and euros or dollars.
The fact of the matter is that you could be spending your time elsewhere, looking to ensure to spend your time productively or leisurely. Instead, you chose this wonderful sector.
You chose the crypto sector because of its volatility. You may not know too much about the fundamentals of digital assets in the sector but you do know that you can obtain more value by making sure to dive into the technicals.
The technicals and charts can help you quite a bit. If you look at aspects like the Bollinger bands, the clouds, and also other elements like the oversold and overbought aspects, you can see that there is opportunity.
But there is much more to it and that is where understanding how to conduct the step level settings and grid trading strategy is critical.
Indeed, when reading the guide above, you can say that this is quite a bit of information that you must pay attention to in the world right now. But the truth is that you do not have to be taken aback by these various different pieces of information.
It can certainly be overwhelming when you are looking at the path ahead of you as it can be quite an intensive journey. But that does not mean that you have to give up at the start.
The fact is that embarking on this journey will help you to become a more streamlined investor and trader. You do not want to spend a great deal of time regularly doing simple tasks. That is why you are learning how to ensure to automate all aspects of the strategy.
You probably have an understanding of the fundamentals of digital asset trading in an automated fashion. But there is much to learn from a strategic standpoint to really get the most out of your trading.
This comprehensive guide will help you get started and answer a wide variety of questions that you might have as you get started on this journey.
Choosing the right step and levels settings for your grid bot is not complex once you learn about the functionality as well as the operability of these factors. After learning exactly how to move forward with these requirements, you can use your grid bot in a way that stays true to your trading approach.
At the same time, it is important that if you feel any doubts about these factors, you take a step back and rethink your strategy. This allows you to make an informed decision about continuing or pausing your trading bot. In turn, you can remain confident in executing your cryptocurrency trading on your own terms.