Exploit the volatility and the ranging of the crypto market with Grid trading strategies. Grid trading works because the market ranges most of the time. It also acts as an averaging investment strategy. Setting up Grid trading is almost free on Binance Exchange and 3commas grid bot App. Grid lines are equal price levels in the price chart on a given time frame. Grids send orders of the size in each level. Grids make use of limit orders for buy and sell orders.
Summary of the Grid Trading Strategies
- Grid Trading is best in a volatile market. Grid setups print money as the market makes a regular up-and-down movement. Market volatility is when prices constantly rise and fall within a range.
- Look out for a ranging market. This is where you will make quick money.
- Trending coins are the best crypto for grid bots. Trending coins generate lots of Buy and Sell signals. This makes it possible for constant trading and closing of trades for grid profitability.
- In order to earn more, customize your grid levels to trade more before the market leaves the defined or selected range. More trading within a range, the more money and profits you make.
- The three different types of Grid are – Neutral Grid, Long Grid, and Short Grid. These three are best used in different market-ranging conditions.
- On a Neutral Grid, the neutral axis is in the middle between Buy and Sell regions. BUY regions are at the bottom while SELL regions are at the top. It buys below the market prices and sells above the market prices.
- On a Short Grid, the neutral axis is at the bottom of the Grid. It places only short positions or sells on the grid levels.
- On a Long Grid type, the neutral axis is at the top of the Grid. Buy-limit orders are placed below the neutral axis.
- You will lose money whenever the market price on the market leaves the Grid region without closing the Grid positions. You can get liquidated if there is a heavy dump or pump outside your Grid region.
- On Futures/Derivatives trading, always use Stop loss on your Grid trading strategies.
- Neutral Grid is a perfect setup for an up-and-down raging market when the price is at the midpoint of the range. Long Grid is perfect for a ranging market that will go up soon when it leaves the Grid positions. Short Grid is implemented for a ranging market that is headed downwards. That is when the price leaves the Grid range, it is headed downward.
- Take consideration of your Grid Profit and Loss per level after paying commission fees on the Exchange.
- On Binance Grid in Arithmetic mode, each grid has an equal price difference (4000 – 4000 – 4000, etc) and in Geometric mode, each grid has an equal price difference ratio (2%, 2%, e.t.c in percentage).
- The top trending markets for Grid trading are the top 5 coins with the highest market cap – BTC/USDT; ETH/USDT; BNB/USDT; ADA/USDT; XRP/USDT.
GRID TRADING STRATEGIES
A. LONG GRID SETUPs = buying region for upward direction. Suitable at support levels (EMA 200) for a sure market that would bounce upwards.
SHORT GRID SETUPs = resistance levels for a sure market that would fall back after hitting suitable ranges within the resistance of the instrument that you are analyzing.
NEUTRAL GRID = up and down markets only.
B. Strategy II
i. Use a Higher Time Frame, a 1-day chart, to analyze the market. Use drawing tools to draw a suitable grid level – either Long Grid or Short Grid.
ii. Use a Lower Time Frame (15 mins) to set up your grid positions. This strategy will close more trades before the market plays out of the grid range.
FUTURES (DERIVATIVES) VS SPOT TRADING
- Futures/Derivatives trading is far better than the Spot market. You can lose money on spot and on the Futures market. This means that Stop losses are applied in both markets.
- You can use leverages on the Future market from 1x, 2x, 5x, etc. This is a big advantage for your sure trades. You can earn over double profits on setups that print money in the shortest possible time.
- On the derivatives market, you don’t own or hold any coin. No HODLer. Just trade and leave the market in peace or pieces.
- You learn more about trading strategies and different market structures when dealing with the futures/derivatives market.
- You can go LONG or SHORT/SELL on the derivatives market. Making money in both directions. Hedging crypto assets becomes profitable.
- Most Altcoins may vanish and disappear for life. Don’t forget Exchange delisting coins.
[…] together to make the Trading profitable or in Losses. Observe the Charts to see this for yourself. This is why Crypto DCA and Crypto Grid trading strategies work well in good setups. Grid trading performs best in volatile and sideways […]