The stock market was the millennials’ investment heaven. It’s full of adrenaline and risky tradings; just the right daredevil to get millennials out of their comfort zone. But, it feels like as gen-Z is taking over almost everything — yes, my fellow millennials, we are getting old — their new investment heaven is nothing but the famous crypto-trading.
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As we all know, the world of cryptocurrency keeps getting bigger and bigger, and there are no signs of slowing down. The sooner you get on that horse, the better.Â
To choose the best coins for grid trading, you must first understand what the dickens I’m talking about. There are so many different ways to get into the crypto-trading business. The first thing you need to know is that to make profitable trades, you always, and by all means I mean, always need a strategy. Grid trading is one of the best trading strategies that works really well in the stock market and has adapted quite remarkably to the cryptocurrency market.
To use grid trading, you need to know about the grid trading bots, the strategies, and the best coins for grid trading. That, my friend, is exactly what I’m going to teach you!
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What is Grid Trading?
As I have already mentioned, grid trading is a commonly used trading strategy in stock markets. It is also a famous strategy in forex trading. Cryptocurrency trading is the next market grid trading works just fine.Â
You know how the good old spot trading works? We buy an asset and wait for the price to go up. Then, we sell the asset and wait for the price to drop so we can repurchase it at a lower price. If the asset’s price drops lower than our purchase price, we lose some of the investment. On the other hand, if the price goes higher than our purchase price, we make a profit. That’s how spot trading works.
Grid trading works differently because we will buy and sell assets based on price ranges and trends. Grid trading is an automated trading strategy. The idea is to buy and sell currency in a pre-defined price grid.
How Grid Trading Works
Choosing the best coins for grid trading depends on a thorough knowledge of the strategy itself. In Grid trading, you have to first set a starting reference price. Then, you have to set buy and sell orders. Buy orders will be set on multiple even levels targeted by the grid above the starting reference price. Finally, the sell orders will be set above the buy orders’ prices. The same thing can be done for short sides to create a grid for short and cover orders.
As I mentioned, grid trading is an automated trading strategy. To automate the process, you have to set these parameters:
- The highest price
- The lowest price
- The grids
- The position size
- The stop losses
To obtain the highest and lowest prices, check the recent price ranges. Base your prices on the market’s highest and lowest prices in a period of time. The grid then checks for pending orders placed in the set price range. When setting your grid, look out for transaction fees because if your grid is too dense, there’s a chance that your profit might not be high enough to cover the transaction fees. The position size is also essential for automating your grid strategy. It’s the money amount you use to perform the grid trading. The stop loss price is the parameter that helps prevent losses. This price has to be set lower than the lowest price. If the asset’s price drops to the stop loss price, the system will start selling all the open buy positions.
Grid Trading — Pros & Cons
Grid trading is one of the trending trading strategies in the forex and cryptocurrency markets. But, is it for you? By knowing the advantages and disadvantages of grid trading, you can make a clear decision if this strategy would work for you:
Grid Trading Pros
- The concept is easy to understand.
- The strategy is easy to implement.
- It works on different timelines.
- With grid trading, small profits will build up quickly.
Grid Trading Cons
- It only works in sideways markets.
- Finding the best coins for grid trading can get tricky.
- If the market turns, your grid will be stopped.
Basically, if you are looking for a low-reward and low-risk trading strategy, grid trading is the right strategy for you.
Is Grid Trading Profitable?
Considering the pros and cons of grid trading, it is only fair to ask a simple question: Is grid trading profitable? The answer is yes, absolutely. If you do grid trading regularly, you can earn %100 to %300 APY (annual percentage yield). It all depends on the grid bot, coins, and pairs you choose. If you choose the best coins for grid trading, you can increase your profits. The longer your grid bot works, the more money you will make.Â
Grid trading is, by far, one of the safest and quickest ways to trade and make profits in a ranging market. With that being said, there are still trading risks with grid trading, just like implementing any trading strategy. You can still lose money if the market turns and stop you out of your grid. Then again, investing in markets like cryptocurrency and forex is always risky, right? There are just many external parameters affecting the market that are out of your control.
How to Configure Your Grid Trading Bot
To implement an automated grid trading strategy, you need to invest in a good grid trading bot. It’s true that the trading bots will do the hefty job of trading for us, but probably the coolest advantage of using bots is that you don’t have to live in front of your laptop. The bot will do its job even when you are asleep and the market is alive. But, before getting a bot, there are several steps to configure your grid trading bot and strategy. Most importantly, you need to find the best coins for grid trading.
Step 1: Pick the best coins for grid trading
The best coins for grid trading are the ones that move sideways or are slowly growing. You can use different indicators and factors to come up with the coins or pairs that work best within a price grid. I will thoroughly explain how to find the best coins for bots in the following section.
Step 2: Find the right grid trading bot
Grid trading bots are offered both free and paid. You can also build your own grid trading bot if you have programming skills. For trading beginners, no matter the market, it’s best to start out with a free bot and then upgrade to a paid one once you get the hang of it.
Step 3: Set up your parameters
Once you have chosen your trading bot and obtained the best coins for grid bots, define the parameters we already talked about earlier. The coins or pairs that you choose will tell you how to target the highest and lowest prices. Then set your grid and make sure it’s not too dense and crowded. Lastly, and this is very important, define stop loss points, and the bot will automatically sell your assets when reaching stop loss points so you won’t lose too much of your initial investment.
Step 4: Review and Analyze
After a while of working with a grid trading bot, start analyzing how your bot and your chosen coins/pairs are doing. Is the profit not as high as you want? How smooth is the automation process? Educate yourself on the market more and change your pairs if necessary. Once you start working with the grid trading strategy, you will learn when and where you can make some adjustments to make higher profits.
Tips on Finding the Best Coins for Grid Trading
I think you have already noticed that you can’t just go ahead and choose any coin or pair for grid trading. Honestly, finding the best coins for grid trading is a bit confusing. But, the key factor is choosing the coins or pairs that move sideways. Let me show you some tips and tricks on finding the best coins for grid bots:
- Grid trading works when the market is moving sideways. The coins and pairs that have many or huge price ups and downs but remain at a certain average price over a long period of time are the best choices for grid trading.
- Canceling and redefining your grid if a coin’s price goes higher or lower than your grid will not save you money. It will actually result in losses you don’t see coming. Don’t make a sudden decision based on a one-time pump or dump.
- Try to use a price range that would last for days or weeks. To do so, check out how long did your coin stay in a price range previously.
- To know if a grid is good and profitable, you need to look beyond just the profit. Let me give you an example. If your asset’s current price is the same as the price you started your grid and the asset made 5%, this is a good grid. If the current price is 20% higher than your grid’s starting price and you made 10%, It’s probably best not to continue with this asset.
- If people recommended a grid or if you found a grid strategy and wanted to use it, check this factor first: Did the asset go up the grid’s price range recently? If it did, since I already mentioned pumps and dumps, it’s best to stay away from it.
- Again, if you are wondering about an asset and grid bot, check out how long the grid has been working. Grids that have been going on for days or weeks offer the kind of stability you are looking for.
I thought I would go ahead and share some of the best grid bot pairs for both forex and cryptocurrency markets. Be sure to use the tips above to choose the right pair.
Best Crypto for Grid Trading
| Pair | Current Rate | Volatility in 24h | Trading Volume |
| GOC-BCH | 0.00037121 (BCH) | 12.72% | 77167 BCH |
| LINK-BCH | 0.0788244 (BCH) | 0% | 0 BCH |
| LTC-BCH | 0.56286 (BCH) | 2.34% | 0 BCH |
| OMG-BCH | 0.01646471 (BCH) | 0% | 0 BCH |
| ONT-BCH | 0.002501 (BCH) | 0% | 0 BCH |
| RPZX-BCH | 0.0000001 (BCH) | 0% | 0 BCH |
| TRV-BCH | 0.00004978 (BCH) | 101.12% | 84 BCH |
| TRX-BCH | 0.00035378 (BCH) | 89.76% | 10 BCH |
| WAVES-BCH | 0.03 (BCH) | 0% | 0 BCH |
Best Grid Bot Pairs for Forex Trading
| Currency Pair | % Change last 2 weeks | % Change last 3 months | % Change last 6 months | % Change last 12 months |
| GBP/JPY | -0.87 | 0.65 | -3.18 | -3.32 |
| EUR/JPY | -0.76 | -0.54 | -4.24 | -5.25 |
| NZD/USD | -0.96 | -2.13 | -2.08 | -5.24 |
| EUR/USD | 0.78 | -0.76 | -0.89 | -5.71 |
| GBP/USD | 0.65 | 0.56 | 0.21 | -3.82 |
| USD/JPY | -1.47 | 0.21 | -3.38 | 0.53 |
| AUD/USD | -0.64 | -1.25 | -3.16 | -7.08 |
| USD/CAD | -0.29 | 1.14 | 1.67 | 5.12 |
| USD/ZAR | -1.40 | 4.14 | -0.96 | 15.28 |
Give yourself a better chance at the Forex market by hosting your trading platform right next to your broker.
Want to Improve your Trading?
Bottom Line — Grid Trading and the Sideways Market
Cryptocurrency and forex markets are great places to invest your money in. Trading is fun and exciting, but you need an excellent strategy to make profits and earn money. Grid trading is one of the proven trading strategies that is also low-risk. If you are just starting to trade, grid trading is a good way to help you learn the market and find your place.
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FAQ
What are the best coins for grid bots?
According to Tradesanta, the best grid bot pairs are BTC-BNB and ETH-AED.
What are the different types of cryptocurrency trading bots?
There are 5 main types of crypto trading bots:
- Profile automation bots
- Technical trading bots
- Arbitrage bots
- Market making bots
- Algorithmic trading bots
How much can I earn with the best coins for grid bots?
If you choose the best coins for grid bots, you can earn up to 300% profit.
