Binance Grid Trading Review – Fees, Strategies, Profitability

What Is Binance Grid Trading?


Binance is a cryptocurrency trading platform, it supports a range of popular cryptocurrencies along with a wallet to store your funds. Grid trading provides buying and selling of futures contracts automatically. You won’t have much work to do as the bot conducts its orders with very little input. It is designed to place orders in the market at an already set time interval and price range. Grid trading is commonly linked with the foreign exchange market and is a popular practice.

How to Set-up Your Grid Trading Strategy


1. First, log in to your account, then go to USD-M features trading interface and then click on Grid Trading.

So if you are working on Binance App, click the Futures tab and then Grid Trading.

There is a range of different parameters you need to edit and select, so take your time when creating your bot. Once you have the desired options chosen, select “create” and you will be good to go!

Grid Trading Mechanism


It is simple to use the Grid Trading mechanism, from setting up the bot to using it on trading pairs. Simply follow the steps to set up your bot and its that simple. Binance is a well known exchange that is respected by the wider crypto community, this helps to ensure their quality and ease of use.

Grid Trading Parameters


  1. Pick a symbol
  2. Isolated margin mode
  3. Balance profit
  4. Lower and higher amount
  5. Mode: Arithmetic/Geometric (cannot alter after the grid order is set)
  6. Grids (i.e., number of perimeter order)
  7. Leverage/Grids (fees reduced)
  8. Primary margin (cannot be altered when the grid order is set)
  9. Entire investment (cannot alter when the grid order is set)
  10. Quantity (i.e. grid amount)
  11. Present margin balance (i.e., Margin balance of USD-M Futures account)
  12. Activate type:Final price (optional, can be used before the grid is activated)
  13. Activated-price (Optional, can be used before the grid is activated)
  14. Stop-higher-boundary/stop-inferior-boundary i.e. stop losing peak price/stop losing bottom price(Elective, can be chosen before the grid is setoff)
  15. Terminate all orders on stop (Elective, ticked by default, can be chosen before the grid is activated)
  16. Shut all placements to stop (Optional, can be selected before the grid is activated)

How to Check Active Grid


Time: Formation time of the grid.

Symbol: During grid trading, users can click on the leverage/profit showed next to the symbol to adjust the grid leverage

Initial Margin: Margin at the time of grid formation.

Total Profit: Collected profit=Grid profit + Unrealized P&L

Notes:

If all the close placements on stops are entitled to open placements under the grid, all the placements will be closed at market price after finishing the grid. The P&L of closing positions is not included in the grid profit.

The funding fees accrued during strategy work are not added to grid profit.

Realized profit: Profits and losses which are realized from grid trading

Unrealized  P&L: Based on the last price and return on equity percentage, the unrealized profit and loss of open orders are calculated.

Duration: Span starting from the grid formation when the time of operation surpasses one day the time of operation is shown as 1d2h9m; and when the time of operation surpasses one year. The time of operation is shown as 1y1d2h9m, updated every minute.

Grid Status: New: When the grid is formed but not activated

Working: Subsequently, the grid is activated

Read also:

How to Check History


Duration:

To check grid transaction history, press the [History] tab and view the details of the grid and finished orders.

History types of grid bots:

  • Abolished: Situation terminating the grid
  • Expired

Binance Grid Trading Fee


Binance.US demands a flat 0.1% spot trading fee which is lower than any other US exchange. such as eToro which is at 0.75%, Coinbase at about 0.5%. If we were to take an overview of all reputable US exchanges, we will find that Binance.US demands the lowest fees among them. (Bittrex, Poloniex, etc.).

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9 Reasons to Use a Grid Bot


1. Reliable Crypto Trading Strategy:


Grid Trading has been a commonly used strategy for a long time, and it is a well-developed, well-tested, well-established, and profitable approach. There are several examples of successful traders who have been using it for a long time at different marketplaces. Because of its extreme volatility, the crypto business, in particular, has shown to be one of the most reliable for grid trading methods.

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2. Usability:


The strategy is very simple to use and to understand for the user because it does not carry any complicated calculations or difficult measurements. It is easy for those that don’t have experience and expertise in the crypto trading business to start with Binance. 

3. Adaptability:


Grid Trading applies the most basic trading concept (buy low, sell high, earn the difference); consequently, it can be applied on any market. It is great for crypto, due to the new technology being such an emotional market, it can be utilised to take on its big swings.

You can actively determine the number and duration of the strategy by selecting the price range and the number of grids.

Grids can be established for the short term, for getting micro profits utilizing minor changes in the thousands of trades every hour, or the long term by selecting a wide range and leaving it to run for months to get profit from every major trend shift. 

4. Enhanced Risk Management:


The independence to choose your grid strategy is great as it lets you create the level of risk and the level of reward that you are comfortable with. To produce a consistent ordinary profit with a little bit of risk, you can use a grid bot on less dramatic currencies, such as a BTC/USD pair, and for higher rewards, you can use a riskier strategy (e.g., with a low market cap coin that has high variations) 

5. Automated Trading:


Grid trading is especially good for automation because of its clear logic and the fact that all the actions are pre-planned, letting the bot completely remove the emotional side of trading which is extremely difficult for humans to do when trading manually. Using Grid Trading with a Bot is a significantly hassle-free, and well-organized experience compared to trying to follow a strategy with manual trades.

For traders looking to take their starting steps towards automation, it is one of the greatest methods since it can set off practically any market in any condition. It can be done 24/7, and it can be set at almost any time frame.

6. Best Strategies for a Sideways Market:


The majority of the trading strategies are based on taking advantage of the market’s current trend. However, more often than not that the market has no clear trend. Thus, traders using this type of strategy have to wait it out and stay flat most of the time.

In a sideways market, you are able to profit with a grid bot through trading different ranges, it isn’t as easy as taking advantage of a bull or bear market, but it will help you earn a steady profit.

7. Versatility:


The grid strategy uses the most fundamental idea of trading, “buy low, sell high” so it can be extrapolated to fit in almost any market. By selecting the limit of the price and the number of grids, you can actively trade with confidence, with your trades being void of emotion.

Grids can be established for the short term, making a large number of trades to grab the micro profits from all small variations of a day or for the long term by selecting a huge range allowing it to run for over a month to earn profits from every huge trend change.

8. The Grid Strategy:


The grid strategy is a technique where a certain number of buying and sell orders are placed at preset intervals below or above the set price. Instead of preventing loss, it targets profits. 

9. 3commas:


FAQs


Q. Which other platforms are offering a GRID Bot?


A. Binance is one of the best platforms for beginners. But except it, most of the other platforms offered Grid Bot such as,

3commas is a great alternative to Binance when it comes to bot trading. 3commas’ entire service is bot trading so it could be argued they are more knowledgeable in this field. Although, Binance being one of the most  respected crypto platforms, it is fair to say they are both great choices for those looking to bot trade.

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BitUniverse is the first company that introduced grid trading bots to the cryptocurrency world.

KU Coin is a well-known exchange. In 2017 it offered grid trading bots which are especially good for illiquid pairs.

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Quadency is one of the most common platforms, but the grid trading bots provided by it are different from any other exchange. When using their bots, you don’t need to set the upper and lower prices manually, automating the experience for beginners even further 

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Grid trading bots are also available from Bitsgap. They are well-known for their demo. 

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There are many other platforms out there, though be sure to do your research and so you know for sure that they are legitimate.

Q, What are the risks of using a GRID Bot?


A. If the price goes down and stablizes there, you can lose out as the bot is unable to then sell the coin at higher than you purchased it. Though thankfully this is where stop-losses come into play. These let you automatically sell when a coin goes below a certain price level, ensuring you don’t ride it down to 0.

If you don’t set up the grid bot correctly, there are higher chances that you can lose a large amount of money. But it’s not the fault of the bot. It’s your responsibility to not risk more money than you can afford, and to set it up correctly.

Q. How to use a grid trading bot?


A. You can use a grid trading bot by setting up the buy and sell strategy so when the price goes up, it starts selling within the preset/predefined price range and when the price goes down, it starts buying, and from the difference in the prices you earn a profit.

Q. How to create a Grid Trading Bot?


A. It is easy to create a grid bot with Binance, simply set up a new bot and edit the parameters and price points to your own liking. This can be quite tedious and intricate, especially for those new to grid bot trading though it is worth taking the time to ensure the bot acts how you want it to. Once this is done, simply start running the bot and (hopefully) enjoy the profits. It is important to remove your emotions from the process, so leave the bot to run for a bit before you check back. This way you will have a better sample size to analyze.

Q. Is Binance grid trading profitable?


A. All trading can be profitable, aslong as the correct strategy is employed. With practice and research, Binance grid trading can become profitable and a great source of income for traders.

Q. Which Crypto is best for grid trading?


A. Bitcoin (BTC), Ethereum (ETH), Binance coin (BNB), Cardano (ADA), Tether (USDT), XRP (XRP), Dogecoin (DOGE), USD Coin (USDC)… are all important and usable coins when it comes to grid trading pairs.

Q. Can you lose money with a grid bot?


A. Yes, especially when you begin due to a lack of experience. This is a good reason to start with a small amount of money so that you can get the hang of it before risking large amounts.

Q. Does Binance have a trading simulator?


A. Binance offers a crypto trading simulator to analyze the strategies you wish to employ. You have a virtual allocation of 10 BTC and 100 ETH to try the utility of the strategy you have created. This bot runs using real market conditions.

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CaptainAltcoin's writers and guest post authors may or may not have a vested interest in any of the mentioned projects and businesses. None of the content on CaptainAltcoin is investment advice nor is it a replacement for advice from a certified financial planner. The views expressed in this article are those of the author and do not necessarily reflect the official policy or position of CaptainAltcoin.com

Sarah Wurfel

Sarah Wurfel works as a social media editor for CaptainAltcoin and specializes in the production of videos and video reports. She studied media and communication informatics. Sarah has been a big fan of the revolutionary potential of crypto currencies for years and accordingly also concentrated on the areas of IT security and cryptography in her studies.

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