In this post, I explained Grid Trading, a strategy that will help you cash out daily from Binance Futures.
If you wish to make guaranteed profits from futures trading, this might just be what you need.
Both new and expert traders can make profits without stress using Grid Trading.
It will help you make profits on small price fluctuations in volatile and sideways markets.
Sounds cool, huh? Keep reading to see how it works.
- What Is Grid Trading?
- How Grid Trading Works
- Benefits Of Grid Trading
- How To Set Up A Custom Grid Trading Strategy From Scratch
Click on any item above to read its details immediately.
1. What Is Grid Trading?
Grid trading is a trading bot or strategy created by Binance to facilitate futures trading.
The goal is to automate the buying and selling of futures contracts.
So, the bot places market orders at known intervals within a set price range.
It is called Grid trading because orders are placed above and below a set price, creating a “grid” of orders at steadily increasing and decreasing prices.
In other words, each grid represents a limit order.
Once the grid strategy is created, the system will automatically buy or sell orders at preset prices.
For example, Akin may set buy-orders at every $500 below the market price of Bitcoin and sell-orders at every $500 above Bitcoin’s market price.
Thus, his orders are placed whenever there is a decrease or increase in price by $500.
And that’s how he takes advantage of ranging conditions. Cool!
Needless to say, Grid trading is great for volatile and sideways markets.
It helps you make profits on small price changes, only that the profits may be little at a time.
Let’s better understand how grid trading works in the next section.
2. How Grid Trading Works
Although it sounds complex, the grid trading strategy is pretty straightforward.
On the grid trading panel, you set the parameters automatically or manually to create a trading strategy.
Such that when the price of a coin drops, a buy order is executed, and a sell order is placed immediately at a higher price.
On the other hand, when the price of a coin rises, a sell order is executed, and a buy order is placed immediately at a lower price.
So, the longer a cryptocurrency remains within a price range, the more profitable this strategy is.
Here’s a rundown of how grid trading works:
First, you have to decide on the Symbol (i.e. futures contract) that you’ll trade e.g. BTCUSDT.
Then you create your strategy by setting the trading parameters including margin type, leverage amount, lower price and upper price, number of orders, etc.
With that, your trade starts running and you accumulate profits.
For a more detailed explanation of each parameter, you can check here.
And if you prefer, you can watch this video for a clearer picture of how grid trading works.
Moving on, let’s look at the benefits of using this strategy.
3. Benefits Of Grid Trading On Binance Futures
Grid trading benefits everyone in the crypto space who has an interest in futures trading.
For crypto beginners, it helps them to trade systematically without the need to forecast the direction of a trend.
You don’t worry about missing real-time market movements, the bot does the hard work for you.
If you are a novice trader, you can use a set of recommended parameters to set up your grid strategy.
The lower price limit, upper price limit, grid count, etc. are already set, and with just one click, you’re good to go.
Furthermore, experienced crypto traders can manually customize and set grid parameters to profit from a predefined price range in any of the available derivatives contracts.
See? It’s a win-win for everyone.
Wondering how to get started? Check out the next section!
[You may also like: Why You Should Trade On Binance Futures – 7 Legit Reasons!]
4. How To Set Up A Custom Grid Trading Strategy From Scratch
Follow these simple steps:
i. Log into your Binance account. Don’t have one? Create yours using my link.
ii. Next, you go to the Binance Futures Grid page.
iii. A step-by-step guide will pop up, click “next” to read through and “start trading” to continue.
iv. Next, select a symbol to execute the strategy.
v. Then set the grid parameters.
vi. Click “Create” to confirm.
Let’s answer some frequently asked questions and then we can wrap up this post.
Do I need to verify my account before I can perform Grid Trading?
Yes. And you’ll be required to provide proof of identity.
You can check here for guidelines on how to verify your account.
What is the minimum amount I need to set up a grid?
My grids won’t set up, why?
Check for either of the following:
– Grid trading is already running on the selected symbol.
– There are open orders or positions on the selected symbol.
– Maybe you are under the hedge position mode, so, adjust to one-way mode.
– You’ve exceeded the maximum limit of 10 working grids.
What risks are associated with this trading strategy?
It’s not beyond what is common with other types of trading, which is the volatility of crypto assets.
So, you can lose money as prices fluctuate significantly.
Gratefully, grid trading will help curb these losses by taking advantage of price changes.
This article will show you how to better manage your trading risk.
Grid trading on Binance Futures enables you to make small profits from many trades.
It saves you the stress of monitoring market movements yet you gain from any price changes. So cool!
This is where we’ll draw the drapes in our discussion on Grid Trading on Binance Futures. I hope it was worth your time.
If you are ready to explore this trading strategy, click here.
Yet to create a Binance account? Get on board; sign up here.