Let's Start From The Beginning... (Print this entire tutorial as a reference)
WHAT IS GRID TRADING?
- Grid trading is a type of trading, typically managed by a dedicated Grid Bot.
- In a nutshell, you select a range, you divide your range into equally spaced buy/sell grids (like trip wires, sorta).
- As prices up and down, your “trip wires” trigger buys and sells catching profits for you incrementally all along the way!
- If you start your grid as the market ranges sideways (which is 70% of the time) or when it is in a gradual upward ranging trend (15% of the time) then you are going to make money most of the time.
- Your goal in grid trading is to have price within your grid range as long as possible with a price exit from your grid out the top.
- About 15% of the time the market will ranging downwards but worry not, many times even if price exits the bottom of your grid, you may still earn a profit or at worst, have a minimal loss.
- Grid Trading requires far less skill and less management than most other types of trading -PLUS- it has far less risk.
- Many grid traders make better returns from grid trading than they do with any other trading strategy.
- Can you lose money grid trading? YES, but with a little knowledge losing money is hard. A consistent grid trader is a winning trader.
BIGGEST BENEFITS OF GRID TRADING?
- It reduces your addiction to chart watching.
- It allows you time to eat, sleep drink and be merry.
- It allows you to exploit trading opportunities around the clock
- It allows you to manage your risks without emotions
- It allows you to follow a predefined trading pattern that often beats the ROI (Return on Investment) you're getting from other hands-on trading strategies.
- It allows you to trade with less concern about price direction.
- It may be a faster way to that Lamborghini everyone is always talking about!
WHAT DO YOU TRADE EXACTLY?
- You may trade any cryptocurrency pair. For example, if you have QUOTE currency in USD (or USDT) you would use that to buy a BASE currency (like BTC ) within your grid range.
- It all starts with an initial investment to get the ball rolling
- Then your BOT will buy or sell an equal amount at each grid line
- Buy and sell gridline "hits" are replaced with new limit orders gridline-by-gridline as you go along.
- Buy and Sell fees are whatever your selected exchange charges (over 25 exchanges are available).
HOW DO YOU EXIT OR QUIT A GRID
- If prices exit out the top, you take your money and run! 100% profit.
- If prices exit out the bottom, give yourself a little wiggle room but you can pre-set a stoploss. Sometimes your earlier grid gains will equal or exceed any loss your stoploss might incur... like magic!
- Many grid traders only trade assets they don't mind holding (like BTC or ETH) and thus never use a stoploss.
- Remember: It is far better to take a smaller loss and move your grid to a new range than to get stuck in a coin you do not want to hold.
HOW MONEY DO I NEED TO GRID TRADE?
- $100 would be a good start on the lower end.
- $1000 (or more) would allow you to run multiple grids simultaneously (which is a good idea).
- Regardless, you must follow good money management rules and avoid over investing in any one grid. 5% max of your investment capital per grid and never more than 50% of your capital across all grids will keep you in the game so you can maximize your profits.
- Remember, the Wright Brothers were NOT shooting for the moon at Kitty Hawk. They merely want to get off the ground!
10 REASONS MOST TRADERS ARE NOT GRID TRADING?
- 1) It's a macho thing.
- 2) It seems too easy.
- 3) It seems too good to be true.
- 4) They've never heard of it.
- 5) They don't know how to automate the strategy.
- 6) They love watching charts all day, drawing and re-drawing their Waves.
- 7) They paid big money for a signal service and are waiting for the big winning signal.
- 8) They are waiting to catch the next blast off TO THE MOON!
- 9) They tried umpteen other strategies and are now flat broke.
- 10) They thought grids were a side dish often served with bacon and eggs.
12 QUICK TIPS FOR STARTING
- 1) Open a grid bot account to assist with your automation requirements.
- 2) Connect your bot to your preferred exchange.
- 3) Start with a cryptocurrency you trust ( BTC , ETH or a top 10 coin). Something you'd be ok holding (HODL) if worse came to worse.
- 4) Wait for a market where you expect or anticipate sideways or slowly upward ranging price action. Use my indicators to help you nail winning grid areas.
- 5) Keep your total grid range (lowest grid to highest grid) within 4% to 8%.
- 6) Select a grid count that renders your grid spacing (distance between each grid line) to a space comparable to typical zigzags you see in recent price action. Typically a .5% to .6% spacing between gridlines (as measured on your Tradingview chart) is a good place to start.
- 7) After your settings are enter in your bot, click the BACKTEST button. Double check settings, make tweaks, backtest again until you are happy.
- 8) Invest MINIMALLY on your first few bots (say $100 or something you can afford to lose). Think of your first grid bot as a "learning experience."
- 9) Set a stoploss below your grid (there is a setting within the bot for this). If you don't mind holding the coin if prices temporarily drop , then you can forego a stoploss.
- 10) Don't dream of riches, instead anticipate all goes well and you get a rather healthy ROI (better than a bank and perhaps better than your trading results/ROI using other non-grid strategies).
- 11) If your first bot does not go well (worry not, remember the first time you tried to ride a bicycle?). Review what happened and try again. 3%, 5%, 8% gains might be just around the corner. Many people following my strategies are achieving 20% or more in gains over average 3 to 20 day periods.
- 12) Give your bot time to "do its magic" (perhaps 3 days, a week or longer)... as long as prices are within your range, you can leave your grid up and running. Move your grid if price range changes.
HOW DO I LEARN MORE?
- 1) Review my related IDEAS and TUTORIALS (linked below)
- 3) Explore my GRID INDICATORS (linked Below)
HOW DO I AUTOMATE MY GRID STRATEGY?
Explore further help and links at the bottom of this tutorial.
PLEASE HIT THE LIKE BUTTON (and follow me... lots of great stuff in the works!)
As always, I appreciate your support. Please share with others.
Master Crypto Grid Trader
Please Explore My Other Indicators, Scripts, Grids and Educational Ideas.
@DanHollings on Tradingview.