Grid trading is one of the newest tools launched by Binance Futures to help people make the most of the cryptocurrency market. It’s built to run on its own under a few established conditions, allowing you to benefit from even little price changes.
In volatile and sideways markets, our latest and greatest strategic trading tool outperforms. So, in the following article, we’ll show you how to build up a grid trading strategy and how it may help you enhance your cryptocurrency trading!
One of the most basic automation tactics is grid trading. As a result, it is simple to learn and utilize for both new and experienced traders. This article will teach you all you need to know.
What Exactly Is Grid Trading?
Grid trading in Binance Futures is a strategic tool for automating buy and sell orders at predetermined intervals and price ranges. Because it works best in volatile and sideways markets, the function is meant to assist customers in profit from tiny price variations.
When prices move within a specified range, futures grid trading performs well. This strategy aims to profit from minor price changes. The greater the number of grids included the higher the frequency of trades. It does, however, come at a cost because your profit from each order is reduced.
A grid is made up of horizontal lines that run above and below a fixed price. Each of these horizontal lines indicates a market price and will be used by the trading robot as a trigger.
The horizontal price lines above the current market price will activate sell orders, while the lines below the current price will trigger buy orders during range trading. The goal is to purchase at a cheap cost and sell at a high cost.
How Does Grid Trading Work?
Trading is the exchange of assets between two parties at the same time. Stocks, fiat currency, and cryptocurrencies are all examples of assets in the financial trade. And a trading platform, such as Binance Futures, facilitates these asset transactions for all parties.
When orders are placed above and below a predetermined price, a grid of orders at progressively increasing and decreasing prices is created. It creates a trading grid in this manner. A trader may, for example, put purchase orders every $1,000 below Bitcoin’s market price and sell orders every $1,000 above it. This makes use of the fact that the circumstances are varied.
A ranging market is defined as one in which rejection and buy-ups occur over time. Prices fall to a support level before rising to a resistance level. They then return to the support level.
If you’re a technical analyst who’s identified this pattern on the chart you’re looking at, you’ll simply purchase the asset when it reaches support and sell it when it reaches resistance. This is a beautiful little approach for consistently making money from trading.
This technique is made simpler by the grid trading robot. Simply set up the system with a few clicks and walk away while it earns money.
What Are The Advantages Of Binance Futures Grid Trading?
For both newbie and experienced traders, trading with the grid method on Binance Futures has several advantages. Here are some of the advantages you may enjoy if you decide to give it a try.
_Low trading commissions.
_ A robot trader that is simple to operate.
_Your Binance portfolio is fully integrated.
_ Expert traders might choose a flexible manual setup option.
_ Binance platform is extremely liquid, with excellent order execution.
_ Binance is the world’s largest cryptocurrency trading platform.
_ There are a lot of useful features, and it’s always getting better.
_ Its 1-click auto-parameter setting makes it ideal for novices.
Grid Trading Is A Must-Try For Crypto Novices.
Grid trading is a good option for those new to cryptocurrency trading for a variety of reasons. Especially if you don’t have the time to sit in front of your charts for hours.
The grid trading approach is simple to learn and use, unlike most other trading bots that utilize a plethora of algorithms that no one understands. Simply check some price charts to choose a range of instruments, and you’re ready to go.
Because of its simplicity, the grid trading technique is an excellent tool for newcomers. Furthermore, the Binance grid trading bot has Auto Parameters, which are automated defaults that assist you in setting up your grid strategy quickly.
How Can Beginner Traders Utilize Auto Parameters In Binance Grid Trading?
Anyone that is new to trading may find the automated option, called Auto Parameters by Binance, useful. It instantly establishes a grid plan for you and allows you to learn.
Step 1: Then, in the top navigation bar, press or hover around the “Trade” icon. This brings up a menu. To access the platform, click or touch on “Strategy Trading.”
Step 2: The system will offer you the futures trading interface after it has been loaded. To the right, you’ll see the auto parameters, which have been set up.
Step 3: All you have to do now is choose your leverage preferences and the margin you want to assign before clicking the “Create” button.
Step 4: Finally, the system will ask you to confirm your order. The grid trading bot on the Binance Futures platform is that simple to operate.
Why Should Experienced Cryptocurrency Traders Utilize Grid Trading?
Experienced traders will benefit from the Binance grid trading bot. If you’re an experienced trader debating whether or not the platform is worth your time, consider the following advantages:
_It’s simple to set up and utilize this bot.
_ Its many controls provide you with all of the necessary flexibility.
_ It allows you to focus on other markets or activities because it frees up your time.
How To Create A Custom Grid Trading Strategy From Scratch
You’ll need to learn about the various parameters and what they signify before you can set up the grid on your own.
The most essential grid trading parameters on the Binance Futures platform are as follows:
Lower vs Upper Price
For the range, these are the lowest and upper levels. For that range of markets, the support and resistance levels
Grid Price Trigger
When the market price rises above or falls below this threshold, your grid is triggered. If you don’t want to start your grid right away, choose this option.
The number of grids corresponds to the number of orders. The more orders there are in the same price range, the more grids there will be and the more often you may buy low and sell high.
Geometric Vs. Arithmetic
The grid levels might be separated by equal quantities of asset price (arithmetic) or by percentage relationships (geometric).
Neutral vs Long/Short Grid
With the Binance grid trader, you can either create a position right away or establish a neutral grid. If you open a position right away, your grid will be either long or short, depending on your transaction. If you create a neutral grid, the system will turn on once one of your price levels is surpassed.
Stop Bottom Price Vs. Stop Top Price
These are two rates that serve to safeguard your account from excessive losses. The top price is the highest point at which the grid will close if the market price increases above it. The bottom price, on the other hand, is the lowest level at which the grid will close if the market price falls below it.
Cross Vs 20x (Isolated)
You must choose the sort of margin you want here. Cross margin allows you to utilize the same assets as margin for all of your trades on the platform. That is, separate open positions or pairs of open positions might share the margin. The 20x, on the other hand, refers to a single margin. You may establish a preset margin for the pair you’re going to trade here, and the system will keep it distinct from the others.
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What distinguishes the grid bot from other trading strategies? It’s straightforward. Over a longer period of time, the grid bot is more likely to produce more positive results. This will not only yield a higher profit than other trading strategies, but it will also be less risky. Anyone can use the grid bot, and it doesn’t take long to understand how it works. Grid trading is an excellent strategy to use when trading on Binance Futures.