The grid strategy was originally used in Forex, but it is also frequently used in the volatile spot cryptocurrency markets. In the most simplistic terms, the grid trading strategy can be defined as setting up limit orders above and below a set price and thus creating a grid of orders at incrementally increasing and decreasing prices.
The main objective of this strategy is to capitalize on price volatility in an asset by placing buy and sell orders at certain regular intervals above and below a predefined base price.
The safest use of the Grid Strategy is for markets that are in their nature stationary (or in other words moving sideways). In this example, we will focus on USDT/EUR.
As per the basic setup the current implementation of the Grid Strategy will require three main inputs from the user unless using predefined strategy:
- Range Top
- Range Bottom
- Number of Grids
As can be observed USDT/EUR pair is moving sideways within a relatively tight range between Top 0.94 and Bottom 0.91.
By setting up this range for 50 Grids will result in Average profit per grid to be around 0.05% (accounting for fees).
Running a back-test is useful to obtain some possible estimates about the expected behavior of this setup.
After the strategy is configured and back-tested the strategy needs only the total amount of investment to be set out requiring to hold minimal balances in both assets. In this case, both USDT and EUR needs to be available for trading.
Each running session of Eterbot automatically creates a sub-account in order to protect the investment and can be easily be monitored via the menu.
In order to monitor the profitability, the stats are displayed on the menu. The profitability is calculated based on Bot profit (realized profit) and Unrealized profit or loss that is caused by price movement. By summing up both we get Total profit for the currently running instance.
Eterbot is now completely free for all users of Eterbase. You can run up to 20 bots per account and create up to 199 Grids per bot giving you the opportunity to profit even from small volatility of various assets and also to gain additional gains from NEGATIVE TRADING fees for certain premium accounts.