How to use the Grid Trading Strategy Bot feature on Binance Futures.

The most dominant trait of the crypto market has always been Volatility. The lack of knowledge to trade crypto price volatility responsibly by using risk mitigation tools is one of the major challenges faced by spot and derivatives crypto traders.

The simple truth is understanding how to tackle this problem is the key to a profitable crypto trading career, which is why Binance Futures- the most traded derivative platform has introduced one of the best trading strategies that work best for Volatility- Futures Grid Trading.

What if I told you there is a solution to help you make gains despite the volatility? Do you know that there is a proven trading strategy that guarantees greater gains when trading the volatility in the crypto market?

Yes; Grid Trading is the most trusted strategy and so many seasoned crypto traders are aping into this beautiful strategy to cart away multiple gains per trading grids.

Binance Futures Grid Trading is the best strategy to beat the market volatility because it is the only way to trade market volatility successfully in various volatile market conditions whether there is a rapid upward price movement (pump) or a downward price movement (dump) in the market or especially when there is a sideways movement, whether in a bear market or bull market.

Binance- the best crypto trading platform integrated the Grid Trading feature into its Futures Contract trading and it’s worth exploring whether you are an aspiring, novice or an experienced Futures Contract derivative trader.

In this article, we will explore headings like what the grid strategy is all about, how it works, the benefits of using this trading strategy, who can use it, how to set it up and how you can take advantage of this strategy and ape into trading futures contract on Binance. Before we discuss extensively each of these headings, let me explain some crypto terms contained in this article to aid a better understanding of the content of this article.

Crypto Market: This is a decentralized market that is not backed by any central authority such as a government but runs across networks of computers; it allows traders to buy, sell and transfer crypto on a centralized exchange like Binance or a decentralized exchange like Pancake swap using a technology with a transparent ledger known as a Blockchain.

Volatility: This describes how quickly and how much the price of an asset change. It is a measure of the rapidity and degree of price changes. It can be used to determine investment risks attached to an asset.

Pump: This is simply the rapid upward price movement of an asset.

Dump: This is simply the rapid downward price movement of an asset

Sideways Movement: This describes the upward and downward grid movement of an asset within a particular range usually just before a rapid movement to the upside or downside.

Bear Market: A negative trend in prices of a market. It is widely used not only in the crypto space but also in traditional markets.

Bull Market: A positive trend in prices of a market. It is widely used not only in the crypto space but also in traditional markets.

Grids: In crypto it refers to a pattern of selected points along vertical or horizontal lines on a crypto chart.

Trading Strategy: it is a fixed and consistent plan that is designed to achieve profitable returns.

Orders: This is a command to buy or sell placed in the order book to be filled.

Limit Orders: This is an order, request or command to buy or sell order set at a specific price or better. They are not guaranteed to execute except there are orders available to fill the order.

Futures Contract: This is an agreement to buy or sell an underlying asset. It is also a derivative because its value is derived from an underlying financial asset. It can also be referred to as a type of leverage trade.

Binance Futures: This is the leading crypto derivative trading platform that allows traders to trade and open long and short positions using leverage up to 125x.

AI: Artificial Intelligence

BOT: A robot that function based on preset parameters and coded or preset instructions.

Crypto Beginners: New crypto enthusiasts willing to start their journey into crypto trading and investments.

Novice Traders: Crypto Traders without so much trading experience.

Experienced Crypto Traders: Advanced experienced traders that can use indicators to determine direction of price of crypto assets via charts

If you would like to learn more about crypto related terms, search through the binance academy here.

Now that we have a clear understanding of what these terms mean, let’s x-ray how you can explore Grid Trading on Binance Futures.

What is Grid Trading?

This is a trading strategy that involves placing orders along a grid; that is taking into cognizance of the asset historical price data or using the asset price chart data to select points to set buy and sell orders. This strategy takes advantage of the crypto price movements by setting lower and upper price limits and then placing orders to buy below the market price close to the lower limit and placing a sell order above the market price close to the upper limit price. This strategy allows setting a grid of orders as the price increases or decreases.

How does Grid trading work?

To understand how the concept of Grid Trading works, let us consider an example:

Assuming that we have an asset like Bitcoin (BTC) which is known to be very volatile. The price of BTC rises and drops rapidly.

To set up a Grid Strategy, Let’s assume the current BTC price is $42,000; we need to pick a lower limit and an upper limit price that will form the range for the grid orders. The Binance Grid Trading feature on Binance offers a flexible AI BOT that allows you set the parameters automatically or manually, thus giving traders the opportunity to experiment and perfect their strategies.

Let’s Say: we pick the lower limit price at $40,800 and the higher limit price at $43,200.

The strategy requires that we pick several grid prices or allow the AI to pick where we will place limit BUY/LONG orders when the price of BTC falls below the current market price and pick several grid prices where we will place SELL/SHORT orders for BTC when the price of BTC goes above the current market price. We can also select the total number of orders (grid count) as per your strategy choice.

From the parameters set, it simply means that as the price of BTC falls, our Limit BUY/LONG orders will be gradually filled depending on how low the price of BTC goes and how many grid orders are triggered and filled and when the price of BTC starts to rise above the market price our SELL/SHORT orders would also be filled giving us profits per grid based on how high the price of BTC goes and how many grid orders are triggered and filled.

Find a pictorial illustration below.

• Image 1 show the current BTC price when Grid strategy was created.

• Image 2 shows the filled BTC BUY/LONG orders at several grids created.

• Image 3 shows the filled BTC SELL/SHORT orders at several grids created.

What are the benefits of Grid Trading on Binance Futures?

There are numerous benefits and we will consider them one after the other.

MORE WINS:

The most important benefit is that this automated strategic tool Binance Futures offers helps you to maximize your profits and take advantage of the volatility in the market to gather more gains.

MINIMIZE LOSSES:

With the strategy helping you to buy the dips, it certainly helps the trader to note that there are dips that can come because of volatility and helps him get prepared to buy the dips by placing buy orders; thereby reducing the risk of liquidation from the market since he has created orders at the bottoms that will reduce his entry prices and drop down the liquidation prices, thus limiting the risk of liquidation and losses due to volatility.

THE POWER OF AUTOMATION:

Futures Leverage traders enjoy the comfort of having an automated trading system that affords them more time away from their screens and asset charts which can be used to enjoy other activities like spending time with family, recreation, watching movies and every other hobby asides trading.

EASE OF CREATION:

Note that this strategy is as easy as setting the needed parameters manually or allowing the AI select the parameters with analysis drawn from recent price actions. So basically you only need to just choose your number of grids, lower limit or upper limit or allow the BOT choose for you and watch it set all grids and then it automatically executes the preset orders as market volatility continue, while you scoop the profits from it. So with just a few clicks, anyone can profit from the volatility that crypto trading brings.

NO NEED TO BE A PRO:

One of the most outstanding benefits of Binance Futures Grid Trading is that Novice traders and Crypto beginners will enjoy using the auto parameters of the BOT and can now basically trade futures using this powerful tool without much hassle, and then experienced traders can rest a bit or take a break from market technical analysis, while the Grid Trading BOT does the needful.

Kindly Note that trading derivative futures assets are volatile products with high risk of losing money quickly due to price fluctuations, therefore you should always DO YOUR OWN RESEARCH, and never trade or invest funds that you can not afford to lose.

Leverage trading can help you to amplify or magnify the profits from successful trades if you take time to understand the fundamentals of leverage trading and utilize proper risk management techniques which includes the use of risk mitigation tools, such as stop loss and stop-limit orders and you may need to employ the services of a financial advisor if needed.

How to set up a custom grid trading strategy from scratch

It is very easy to set up Grid Trading on Futures. The process is quite fast and very easy to set up. There are two ways to set it up.

1. Auto (suitable for Crypto Beginners and Novice Traders)

Here is the guide to set it up, First you would need to create a verified Binance account by clicking here, and then complete the KYC verification process after creating the account.

If you already have a verified account that you currently trade crypto with, then you can skip the first step and proceed to the second below.

If you have successfully created your crypto trading account or have a verified trading account, follow these steps below:

• Go to Futures trading interface by clicking Futures from the Home page, if you are using the Binance APP or simply use this direct link if you are using a web browser: https://www.binance.com/en/strategy/futures/grid/BTCBUSD?ref=122131113

• From the APP, Click the three dotted lines top right to assess the features window.

• Next is to select Strategy trading in the features window.

• In the following window that pops up, choose a trading pair you wish to set the grid trading for.(GMTUSDT Perpetual is selected in the picture below)

• Notice that Create is chosen by default; Next Select Auto

• The parameters needed are set by default for you by the Bot, all that remains is to set the desired amount you wish to invest and choose the other preferences for your trade; like you can increase or decrease the leverage (25x is chosen by default), you can change the trade direction, if you want to go long or short (Neutral is set by default), you can also choose your Margin mode (Cross is chosen by default).

• The final step to creating and setting up your grid trading bot to start running is to read carefully and sign the risk disclaimer statement as shown below 👇

• Once this is done, your grid trading bot will automatically set up the buy and sell orders and as soon as volatility sets in, your orders are triggered and profits earned from grid trading.

2. Manual (suitable for Experienced and Advanced Traders)

Here is the guide to set it up, If you already have a verified trading account, follow these steps below:

• Go to Futures trading interface by clicking Futures from the Home page, if you are using the Binance APP or simply use this direct link if you are using a web browser: https://www.binance.com/en/strategy/futures/grid/BTCBUSD?ref=122131113

• From the APP, Click the three dotted lines top right to assess the features window.

• Next is to select Strategy trading in the features window.

• In the following window that pops up, choose a trading pair you wish to set the grid trading for.(GMTUSDT Perpetual is selected in the picture below)

• Notice that Create is chosen by Default; Next Select Manual

The Manual interface allows you to select all your preferences and parameters for the grid trading bot. There are two options in creating the Manual grid trading bot.

• Arithmetic: You are to select the lower price, upper price, the no of grids and as shown in the image below, the Arithmetic Manual settings set each grid at an equal price difference between each other.

• Geometric: You are to select the lower price, upper price, the no of grids and as shown in the image below, the Geometric Manual settings set each grid at an equal price difference ratio between each other.

Next thing to do is to set the desired amount you wish to invest and the other preferences for your trade like you can increase or decrease the leverage (25x is chosen by default), you can change the trade direction, if you want to go long or short (Neutral is set by default), you can also choose your Margin mode (Cross is chosen by default).

• The final step to creating and setting up your grid trading bot to start running is to read carefully and sign the risk disclaimer statement as shown below

• Once this is done, your Manual grid trading bot will automatically set up the buy and sell orders and as soon as volatility sets in, your orders are triggered and profits earned from grid trading.

Final Thoughts:

Like the old saying goes; if you can’t beat them, you join them- definitely no one can take away the volatility in the market, it then becomes obvious that traders need to find a way to trade the volatility and make gains whether there is a rapid upward or downward price movement.

If you have been pretty worried about trading crypto due to the high volatility, then you should consider trading Futures with the Grid trading feature that Binance Futures offer.

With every type of trader in consideration whether a crypto beginner, or a novice trader still learning how to read charts and understand market trends or an advanced trading with a wealth of experience using Technical analysis and Financial Analysis to predict market price directions owing to an advanced understanding of how market trends, patterns, charts and crypto news influence volatility, everyone is covered with the Auto and Manual options when creating a Grid Trading Bot.

It is time to “join them”- trade the volatility in the market, since we can’t stop it- Explore Grid Trading on Binance Futures Now!

This article has been carefully researched by me as a traders guide and not a financial advice and as always I advice you DO YOUR OWN RESEARCH.

If you enjoyed reading this content, check out more crypto educative content from my archives and if you would like to read more about grid trading on Binance, look up this reference work from Binance here.