Grid bot is a trading bot that executes the grid trading strategy in cryptocurrency spot and margin trading. It automates the process of buying and selling cryptocurrencies at predetermined levels, aimed at benefiting from price swings and achieving consistent profits.
What is grid trading strategy?
Grid trading is a strategy used in both spot and margin trading of cryptocurrencies. It involves setting up a grid of buy and sell orders at predetermined levels above and below the current market price, enabling traders to capitalize on price fluctuations. This strategy supports neutral, short, and long positions, allowing traders to adapt their approach based on their market expectations—whether they anticipate the market to rise, fall, or remain stable.
What are the advantages of using grid bot?
When is the best timing for using a grid bot?
When deciding the best timing for using a grid bot, it's essential to consider your expectations for market movement. The grid trading strategy is versatile, allowing you to potentially profit in any market condition—whether the market is trending up, trending down, or staying relatively flat. Depending on your market outlook, you can choose from the following approaches:
Long: when you expect the price will fluctuate and go up eventually
Short: when you expect the price will fluctuate and go down eventually
Neutral: when you expect the price will fluctuate within a range
Learn more about the difference between short, long, and neutral trading.
How to create a grid bot?
Once you have signed up and passed identity verification on XREX, you'll be faced with two options for how you would like to proceed with creating your first Grid bot: Smart bot or manual settings. The Smart bot recommends parameters based on 21 days of backtesting, while manual settings allow you to customize various trading options such as grid mode, short/long/neutral strategies, and other details to suit your preferences. For more experienced users, XREX also offers advanced settings for further customization. We encourage you to learn more about the differences between the Smart bot and manual settings or check out our step-by-step guide on how to get started with creating your first Grid bot on XREX crypto-fiat exchange.
Open a grid bot position with a margin of up to 3x. Learn more about the risks and rewards of margin grid. Combine the grid trading strategy with margin trading to amplify potential profits while managing the associated risks. This approach allows you to leverage your position, increasing both potential gains and exposure to market volatility. |
Trading pairs & fees
Coin / Token | Trading Pair | Fee |
BTC, ETH, XRP, BNB, MATIC, SOL, LINK, AVAX, DOT, APE, ATOM, SAND, BCH, MANA, AAVE, ALGO, GMT, MKR | USDT | 0.05% |
BTC, ETH, XRP, SOL, LINK, DOT, BCH, MKR | USD | 0.05% |
BTC, ETH, XRP, BNB, MATIC, SOL, LINK, AVAX, DOT, APE, ATOM, SAND, BCH, MANA, AAVE, ALGO, GMT, MKR | TWD | 0.05% |
BTC, ETH, XRP, BNB, MATIC, SOL, LINK, AVAX, DOT, APE, ATOM, SAND, BCH, MANA, AAVE, ALGO, GMT, MKR | USD91 | 0.05% |
BTC, ETH | USD971 | 0.05% |
BTC, ETH | XAUT | 0.05% |
ETH, BCH | BTC | 0.05% |
Common terms-to-know
Term | Description |
Quantity per order | The quantity per order refers to the amount of cryptocurrency that the bot will buy or sell on each grid level. |
Profits per match | The profits per match refer to the amount of profit that the bot aims to make on each grid level. |
Matched profit | Matched profit refers to the realized profit generated when the bot successfully executes both a buy and sell trade within the grid, with the price moving in the expected direction. This profit is ‘realized’ because both trades are completed, locking in the gain. |
Unmatched P&L | Unmatched profit in grid trading refers to the difference between the profit of an open trade and the profit that could have been realized if the trade had been closed simultaneously with its corresponding opposite trade. This includes any unrealized profit as well as the margin cost associated with maintaining the open position. |
Bot closure | When using a Grid bot, there are several options available on how to close a position, depending on your investment goals and market conditions. Learn more |
Leverage | Leverage refers to the ability to control or trade a position that is larger than your deposited capital. It's essentially an amount provided by XREX, allowing you to amplify your trading position and potential profits, but it also amplifies potential losses. (i.e. 3x leverage is to multiply your position by 3x). |
Grid mode | Refers to the way in which intervals between buy and sell orders are calculated in the Grid trading strategy (e.g. arithmetic and geometric grid mode). Learn more |
Examples of profit and loss
Explanation of Grid bot user A closing profit
User A invested $1,000 in the BTC/USDT trading pair using a Grid bot with a Short strategy on XREX. They set their upper and lower price ranges and configured the number of grids. To manage their risk, they also set up close triggers. The bot monitored the market and automatically placed sell and buy orders at the predefined levels. After a week of price fluctuations, the bot executed multiple trades, resulting in a 5% profit. Satisfied with the outcome, User A decided to close the bot and claim their profits.
Explanation of Grid bot user B taking loss
User B invested $1,000 in the BTC/USDT trading pair using a Grid bot with a Long strategy on XREX. They set their upper and lower price ranges and configured the number of grids to use. Confident in the market, they opted not to set close triggers. However, after a few days, the price of BTC/USDT dropped significantly. The bot continued buying more BTC as the price fell, accumulating base assets. Since the price remained below the lower limit, unrealized losses began to build up. Worried about the market’s direction, User B manually closed the bot, resulting in a total loss of 10%.
These examples highlight the importance of setting up close triggers while using Grid bot to manage risks and maximize profits. It also shows the potential risks of trading in the volatile cryptocurrency market.
What’s the difference between smart bot vs. manual settings?
Explanation of Smart bot
The Smart bot uses backtesting to evaluate the performance of a trading strategy using historical market data. By analyzing historical price data for a specific trading pair over a set period of time (in this case, 21 days), the bot can recommend parameters for live trading. This approach helps to maximize profits and reduce risk, providing users with greater confidence in their trading strategy. Follow our step-by-step guide to see how to create a smart bot on XREX crypto-fiat exchange here.
Explanation of manual and advance settings
When you're setting up a Grid bot, you have the option to manually enter the trading details to adjust your personal strategy. With manual settings, you are required to select a grid strategy, set your desired lower and upper price range, and enter the number of grids you want to use. Optionally, you can choose to configure more with the advance settings.
For those with more expertise can use advanced settings to further configure the position. The advanced settings include selecting your grid mode arithmetic or geometric, and the option to set up start and close triggers.
Start and close triggers are important options to consider when using advance setting for the Grid bot. Start triggers allows you to set a price at which your bot will automatically open the position. On the other hand, close triggers allows you to set a threshold at which your bot will automatically sell your assets if the price drops below or rise above a certain level, helping you to minimize your losses. These features can be used in combination with the grid trading strategy to help you maximize your returns while minimizing risks.
More frequently asked questions
How to check positions?
When you locate the specific Grid bot for which you want to check, click on it and you'll then see three tabs titled: Transaction, Working, and Grid Details.
Transaction: This tab will give you a quick overview of your matched and unmatched profits (P&L).
Working: This tab will allow you to review your open orders, both buy and sell orders.
Grid Details: This tab covers the parameters and other specific settings of your Grid bot.
Margin Details: This tab will appear if you have a margin grid position. It provides an overview of important information, including the margin level, collateral, estimated liquidation price, and more.
By reviewing each of these tabs, you can gain insight into your current positions and make informed decisions about your trading strategy. It is recommended to check your positions regularly.
How to close Grid Bot?
The options for closing a Grid bot on XREX crypto-fiat exchange give you greater control over investments and allow strategies to be adjusted based on market conditions. This flexibility and control offers a convenient and effective solution to optimize crypto trading while minimizing time commitment.
You can opt to manually close the bot at any time by using measures such as Sell all at market price. You can also predetermine when to close upon creating the Grid bot by setting a Close triggers. By making use of these different closing options, you can optimize your trading strategy to achieve your desired profit targets while minimizing risk exposure.
Manually close a bot with the following measures:
Keep all: When the bot is closed, you retain all of your current assets.
Sell all: When the bot is closed, you can choose to sell your assets at market price, which means they will be sold immediately at the current market rate. Alternatively, you can opt for a limit price, where a limit order will be placed to sell the assets at your specified price. If the market reaches this price, the order will execute; otherwise, it will remain pending until the price conditions are met or the order is canceled.
Predetermine when to close a Grid bot with advance settings:
Stop trigger: When creating a grid bot, you can manually decide the closing trigger conditions by clicking on Advanced settings. When you turn on stop trigger, and the price reaches the set price, the system will automatically close your grid bot. This function can help you lock in profits or reduce losses even if you are not actively monitoring the system.
Sell all upon closure: When you set the enter price, if you check the option Sell all on closure, the system will close the bot and simultaneously sell all the assets you invested in this bot at market price when the price reaches your set value.
Keep all assets: When you set the enter price, if you do not check the option Sell all on closure, the system will automatically close the bot and retain the assets you currently own when the price reaches your set value. This effectively helps you reduce losses or retain profits.
What are stop and start triggers?
Stop and start triggers in grid trading are predefined conditions that automatically pause or resume your grid bot's operations based on specific market events. A stop trigger halts the bot’s activity when the market moves beyond a certain threshold, protecting your capital from significant losses in case of unexpected volatility or a sharp trend that could disrupt your strategy. Conversely, a start trigger reactivates the bot when favorable market conditions return, allowing your grid trading strategy to resume without manual intervention. These triggers help automate risk management and ensure your bot operates within the parameters you’ve set for safe and effective trading.
What is the difference between short, long, and neutral trading?
In grid trading, the key difference between short, long, and neutral trading lies in your market expectations and how you set up your grid to capitalize on them. Long grid trading is used when you anticipate an overall upward trend, allowing your bot to buy low and sell high as prices rise. Short grid trading, on the other hand, is for markets you expect to decline, with your bot selling high and buying low as prices fall. Neutral grid trading is designed for sideways markets, where prices fluctuate within a range, enabling your bot to profit from consistent, small price swings without a clear trend in either direction.
What kind of investment mindset is required to use the Grid bot on XREX crypto-fiat exchange?
It's important to have a long-term investment mindset when using the Grid bot. The bot operates based on a strategy that aims to capture small, consistent profits over time, rather than attempting to make large, quick gains. It's also important to have a well-diversified portfolio and not to invest more than you can afford to lose.
Who would benefit from using the Grid bot on XREX crypto-fiat exchange?
The Grid bot is suitable for a wide range of traders, including both experienced and novice traders. It is particularly useful for traders who are looking for a hands-off approach to trading, as the bot will automatically execute trades based on the parameters you set.
What is the difference between a smart bot and a manual bot?
A smart bot simplifies the trading process by automatically recommending parameters based on a 21-day backtest, requiring less input from the user. In contrast, a manual bot demands more attention from the user, as it requires them to fill in more details, including the trading direction (long, short, or neutral), price range, number of grids, and investment amount, providing greater control over the trading strategy.
What is Grid mode, and what are the differences between arithmetic and geometric modes?
Grid mode refers to the way in which intervals between buy and sell orders are calculated in the Grid trading strategy. Arithmetic mode uses fixed intervals, while geometric mode uses variable intervals that change based on market volatility. Arithmetic mode is best suited for stable market conditions, while geometric mode is better for volatile market conditions.
What’s the difference between matched / unmatched profits?
Matched profits refer to profits that are generated when the bot executes a trade and the price moves in the direction that was expected. Unmatched profits refer to profits that are generated when the bot executes a trade and the price moves in an unexpected direction. For example, if the bot buys a cryptocurrency at a low price and sells it at a higher price, the profit would be considered matched. If the bot buys a cryptocurrency at a low price and the price decreases, the profit would be considered unmatched.
How is "Total Profit" calculated for the grid bot?
"Total Profit" in the grid bot is calculated as the sum of your matched profit and your current unmatched Profit & Loss (P&L). Matched profit refers to the earnings from trades that have been successfully executed by the bot, while unmatched P&L represents the unrealized gains or losses from open positions.
How do I differentiate between the average cost of my base holding and the average cost including my realized P&L?
The avg. entry price reflects the amount you've initially invested to open a Grid position. However, the avg. entry price including P&L considers both your initial investment and any subsequent matched profits.
In essence, the latter metric (including P&L) provides a more comprehensive view of your investment's actual performance, accounting for both initial expenditure and trading outcomes.
What should I do if the Grid bot is under loss?
If the Grid bot is under loss, it's important to assess the reason. If the loss was due to market conditions, it's important to remember that this is a normal part of trading and to stay patient. If the loss was due to an issue with the bot's parameters, you may need to adjust them to ensure that the bot is executing trades in line with your desired strategy.