welcome back to the Crypto News everyone my name is Josh and this Blog Post is slightly different from my regular analysis Style videos because in this video I'll be talking about a strategy and a tool that is extremely useful during times like this in the market where we see a lot of choppy sideways price action and obviously if you've been watching the Bitcoin chart in recent months you would know that we've seen a lot of times in the market where we've basically been in a sideways price range which is why I thought it would be useful posting a video like this so without wasting any more of your time and getting straight into the strategy and the tool that can be used to fully automate the process as now first of all when you break the strategy down to its Basics it's essentially placing an array of buy orders towards the lower side of a price range and an array of sell orders towards the higher side of a price range so that way if we're seeing a lot of choppy sideways press action this sideways volatility triggers buy
.png)
Today's Crypto Update
orders on the lower side and then triggers sell orders on the other side therefore profiting the difference and that is basically the most simple form of this strategy but obviously you can imagine it can be time consuming considering how many upwards and downwards movements are within a choppy sideways price range obviously you don't want to have to be spending a lot of your time setting up those buy orders and sell orders every time they get executed on each of these moves so that brings us to a tool that we can use that automates this entire process which means it automatically buys at lower prices and sells at higher prices based on a particular price range that we can set and this tool that I'm talking about is known as a grid trading bot and by bit recently launched this over on their exchange now full disclaimer just to be transparent with you I am actually partnered with buybit so for example if you make an account with buybet using the link Down Below in the description both you and I actually get a bonus from
Breaking News and Market Trends
that but with that being said you can see right here that grid Bots are automated trading strategies they're designed to place buy and sell orders at regular intervals within a pre-defined price range so like I was saying back on this chart you set up a predefined price range whatever price range you want and then the grid bot simply carries out a bunch of buy orders and sell orders within that price range and in just a moment I'll be showing you exactly how that works giving you the full run through of the process of creating and closing one of these trading Bots and just before I go through that there's a couple important points to mention first of all this is not leverage trading there is no leverage or debt involved no funding rate no risk of liquidation because at the time of recording this video These grid trading Bots only support the spot Market which means you're buying and selling actual Bitcoin or actual ethereum for example not derivative contracts but obviously even though there is no leverage involved
which means you cannot get liquidated there is still some level of risk which I'll be talking about in just a moment and as for the fees involved there's actually no extra fees for the grid trading Bots which is once again the automation process of this strategy but obviously anytime you execute an actual buy or sell trade on the spot Market there's going to be some sort of fee involved there which is the case anyway whether or not your using this automation process and as of right now the spot Market fee for private at the moment is 0. 1 percent so for example if you buy a thousand dollars worth of bitcoin you're paying a single dollar for the fee but of course once again this trading bot doesn't add any extra fees on top of that and in order to get to this page right here once you're on buy bid you simply come up towards the top of the screen up to this trade menu and then go down to trading Bots and click that right there and that gets you to this page or you can come up here and
hover over assets to see all of the money that's in your buy bit accounts altogether so for example you've got your spot account and your trading Bots account which is this account right here and once again because the trading Bots uses the spot Market it is somewhat linked to the spot account which means essentially when you create the trading bot it takes the funds out of the spot it counts and then when you close the trading bot it moves those funds back into your spot account it's now running through a full example of how to open and close one of these trading Bots basically once you're on this screen right here you click this create more button and that takes you to this this page right here where first of all you select the pair that you want to trade and right now at the time of recording this video all of the pairs are against usdt so ted. usd which means in order to create one of these grid Bots you actually need some usdt in your spot account and in case you want to know how
to get usdt into your spots account I do have a full Barbie tutorial video which I'll link in the description down below that shows how to do that but basically the trading pair is what you're buying and selling so for example the Bitcoin to usdt trading pair means that you would be buying and selling Bitcoin or the link trading pair would mean that you're buying and selling chain link so at this point in order to select your trading pair and the numbers that I'll explain in just a moment you need to actually look at the charts and come up with your own strategy and then this right here simply fully automates that strategy and I'll show you exactly how it does that so just for the example in this video I'll choose BTC to usdt as one of the most common trading pairs out there and then we need to set the lower price and the Upper price for the price range so once again going back to this charts we have a sideways price range where we're experiencing choppy sideways press action and then we need to get the lower price of that range and the higher
price of that range and it is important that the lower price is below the lowest levels within the price range and the Upper price is above the highest levels within the price range and I'll explain in just a moment why that is the case but in this example on screen the highest prices within this particular range are coming into play at around 32. 3 K to 32. 4 K so for example I might end up placing the Upper price at around 33 000 in this particular example and for the lower price looking at the lowest lows on screen within this price range they are coming into play at around 28 000 just above 28k so let's just say if I place the lower price at around 27 and a half thousand that should do all right and then the next thing we need to do is work out the number of grids which is basically the amount of orders that are placed within the price range and you can see right here that there's a limit on the number of grids which is between 2 and 100 and
once again the grids are the orders between the price range so for example if you pick two grids for this price range that means there's one buy order and one sell order within this price range but then as the number of grids moves up towards 100 for example 100 different grids in this price range would obviously look like 100 different orders placed within this price range which is obviously a lot of orders within this price range so for example with 100 grid there might be 50 cell orders to the upside on the upper half of this price range and 50 buy orders to the lower half of this price range but there doesn't always have to be an equal amount of buy orders and sell orders because for example let's just say if the Bitcoin price moves down towards the lower side of this price range then in that case it would begin executing some of those buy orders and turning them into sell orders so basically it opens up new sell orders to the upside as buy orders get triggered and then when we pump to the upside as sell orders get
triggered at places you buy orders to the downside which means in this example if the Bitcoin price goes right towards the lower side of this price range then basically at that lowest level of the price range that you put into the grid trading Bots and anything below that level there is no more buy order set to the downside and instead there is only sell orders set to the upside and on the flip side as we move towards the upper side of the price range the extreme upper side that you set within the grid trading bot system anything beyond that price outside of this range there'll be no more sell orders set up by the trading Bots and instead only buy orders left to the downside so that brings us to the risk involved with this grid trading bot which is essentially if the Bitcoin price in this example leaves the price range either to the upside or to the downside we lose out on opportunity for example if the Bitcoin plus pumps above the highest point in this price range that we've set then we're not taking advantage of any of the pump
outside of that price range because at that stage would only be sitting in stable coins because all of those sell orders get triggered at the higher end of the price range and so if we can continue to pump to the upside outside of this range we would only be sitting in stable coins and on the flip side if we dump below the lowest point that we set in this sideways range then in that case the amounts that we had in the trading Bots would be sitting entirely in Bitcoin below the lowest point in the price range because once again as we move towards the lower end of the price range we trigger all of those buy orders and of course the sell orders are placed towards the upside of the range so if we fall below the price range then we're entirely sitting in Bitcoin and obviously if the Bitcoin price continues to go down in that stage there is a risk involved so basically for as long as the Bitcoin price is staying within the sideways price range staying within the parameters that we've set then the grid training Bots can be extremely
profitable during these choppy sideways price ranges it's only when we see a more significant trend for example if we see a major pump or a major dump outside of this range that is when there is some risk involved but with that being said like I said earlier this is all happening on the spot Market which means there's no leverage involved and you can not get liquidated even if we fought below or above this price range so in those scenarios where we leave this price range it essentially pauses the training Bots until we come back into this price range but obviously you always have the option to close the trading Bots at any time you want whether you're in a loss or a profit it doesn't matter you can close the trading Bots at any time and so going back to the trading bot page once again the number of grids can range between 2 and 100 now keep in mind with 100 grids within a price range that can be quite excessive because at that stage with a lot of buy and sell orders placed within that price range obviously it would be
executing a lot of Trades which would rack up a lot of trading fees so the higher the grid counts the more trading fees we're likely going to experience and the lower the grid accounts the lower the fees we would likely experience because of course if there is less buy and sell orders placed within that sideways range there would likely be less buy and sell orders actually being executed so now putting in some numbers into this trading Bots and to do that obviously I'll look at the current big bitcoin price because this previous example I've been talking about so far in this video is previous price action that we've seen a little while ago because of how it defined this sideways press range is but just looking at the current bitcoin price action for example this is of course not Financial advice this is just an example for the video one of the lowest points within this range so far is coming into play at around 17 and a half thousand and one of the highest points is coming into play at around 23 000 so putting those
numbers in the lowest price being around 17. 4 K and the highest price being around 23. 2 K because once again we want the lower end to our price range being just below our lowest point in the price range so far and our Upper price for the price range being just above the highest highs within the sideways price range so far but once again these specific numbers are just an example for this video as they are putting in a grid count putting in something like 16 is not too bad I think for this price range which basically means if we're in the middle of this price range there's going to be about eight sell orders above the Bitcoin price and a 8 buy orders below the Bitcoin price if we're right in the middle that is and you can see right here the interval that is simply the difference in the price between each buy and sell order so the higher the number of grids the more by and sell orders there will be within that price range so the lower the interval because those buy
and sell orders will be a lot closer together and the lower the grid number the less buy and sell orders within the price range which means the higher the interval which means there's more of a gap between each buy and sell order so as the grid number goes up and the interval goes down the profits per grid goes down as well because once again this is just simply measuring the profit between each buy and sell order so if there's a very small gap between each order there's going to be low profit and then after you punch in your numbers it gives you a minimum amount of usdt required for this trading Bots which is based on the lower and upper prices for the price range and the grid number because when you initially create the trading Bots there needs to be enough in there in order to buy an initial amount of Bitcoin for example if we're sitting in the middle of the range but because obviously in order for that to be Bitcoin sell orders you need to have initially some sort of Bitcoin to actually be able to sell once we hit
those sell orders if we go straight to the upside after opening that trading bot so right here using these numbers this has popped out a minimum usdt amount for this trading bots of around 187 so let's just say for this video I put in 200 usdt into this trading bot and click create now it gives us this final confirmation window showing us what we're actually getting into and it also tells us how much Bitcoin will initially be bought the moment we create the trading Bots and once again that's because of the reason that I just explained because we're in the middle of this price range we need to have some amount of Bitcoin to begin with because there's going to be some sell orders to the upside but if we started the training bot towards the upper side of the price range there would be less Bitcoin initially bought when we created the trading Bots because obviously when the price action is up there towards our Upper price that we set there's not many sell orders and a lot of buy orders and on the flip side if we start the
training bot towards the lower price there would be a lot more sell orders and not many buy orders so most of that initial usdt will be converted to bitcoin when we open the trading Bots if we open the bot towards our lower price so anyway going back to this confirmation window and clicking create now that is now immediately created this trading bot and if we click details right here we can see our total investment the price range total profit so far and if we click positions this actually shows us all of the buy orders and sell orders that are placed in the Market at each bitcoin price and you can also see that right now this position this trading bot is holding 93 usdt and this amount of Bitcoin which would be close to equivalent to around that same amount of usdt because we opened it around the middle of the price range and so if right now the Bitcoin price starts moving lower that will start triggering some of these lower buy orders and therefore start moving some of this usdt into Bitcoin and then eventually if the
Bitcoin price comes back up to these sell orders that would obviously start moving some of that Bitcoin into usdt selling Bitcoin into usdt and by the way because I've set 16 grids for this trading bot there will always be 16 orders active in this trading bots so basically if the Bitcoin price starts going down and triggering these buy orders that will actually open up new sell orders to the upside keeping that total amount of 16 orders altogether or for example if the Bitcoin price pumps to the upside from here that will start triggering the sell orders and automatically when one of these sell orders gets triggered that opens up a new a buy order to the downside so this tool this strategy is absolutely perfect for choppy sideways price action like this where we're not seeing any significant Trend to the upside or to the downside just a lot of sideways price action a lot of sideways volatility because obviously it means during a time like this in the market where the hodlers are not doing anything
they're not gaining on losing money we can actually continue to make passive income in crypto and constantly make some profits during these times in the markets using a tool like this and now if I click grid profit go back to this page you can see that this trading bot has already brought in around seven cents and it can allow copy trading if you want which I'll talk about in just a moment but to close these trading Bots you simply click terminate and then it tells you exactly how much Bitcoin and usdt this trading bot is holding in this example and when you close the trading Bots you can choose to receive the Bitcoin in usdt as they are or you can choose to receive it all in usdt and just get back that usdt and not have any Bitcoin or you can choose to receive it in all Bitcoin and not have any usdt or there is a fourth option to receive it in bit dial tokens which is by bit native token but personally if I'm in a Bitcoin to usdt trading pair I'm not really interested in bit doubt for this position so if I just close this trading
Bots accepting Bitcoin and usdt these amounts as they are and upon clicking confirm you can see that I now no longer have any active trading Bots and all of the money that was sitting in that trading bot has moved back to my spot wallet and going back to this main screen for the trading Bots you can see that over here there's actually a daily leaderboard and a seven day leaderboard showing a bunch of other people on private who have active trading Bots and who have allowed copy trading because yes there is actually an option where you can look at these other trading Bots and actually copy them if you want to but it is important to mention that personally I do not suggest this because first of all this person's strategy might be completely different to your strategy they might be seeing something completely different on the charts also they could be trading in a trading pair that you don't even like to trading you might not even like a certain altcoin and also you might prefer let's just say different prices for the price range or
In Conclusion
a different number of grids and also just because these other training Bots have given massive returns that does not tell us what's going to happen in the future obviously that just tells us what has happened during the active duration of the bots so obviously you can look at these to maybe get some ideas but personally I wouldn't just be blindly copying someone else's strategy but anyway I hope you found this video useful I tried to pack in as much valuable information as possible and once again if you want to try this out for yourself I do have a link to buy a bit in the description down below and in the pinned comment in fact it will be the first link in the description and the first link in the pinned comment and thank you to everyone who made it this far in the video I really do appreciate it but that is everything that I have to say and I'll see you all in the next.
Post a Comment
0Comments