For those intrigued by Spot Grid trading and using trading bots, this comprehensive article provides an in-depth exploration of these topics. Whether you're a beginner in the world of cryptocurrency trading or an investor seeking to transition to passive income, this guide is for you. Let’s dive in.
What Is Grid Trading?
Grid trading, the foundation of the Spot Grid bot, involves setting buy and sell orders at regular price intervals. These intervals, forming a grid on the price chart, dictate the number of levels: fewer intervals mean more levels and vice versa.
The essence of grid trading is to trade when the price touches a grid level. Fewer intervals increase trading frequency and reduce the price difference per grid, affecting the profit or loss per order.
If you prefer more trades with less profit/loss each, opt for high frequency. Conversely, lower frequency yields fewer, but potentially more profitable trades. Buy orders are set below the current price, sell orders above it.
What Is The KuCoin Spot Grid Trading Bot?
The Spot Grid trading bot is one of KuCoin’s most popular grid trading bots. At the time of writing, over eight million bots are running the Spot Grid strategy.
Once properly set up, the Spot Grid bot makes a profit by selling the asset at a higher price and buying the same when the price gets lower. This bot is beginner-friendly and specializes in tackling the pressing issue of high volatility in the crypto market.
All the trading bot services on KuCoin are available on the KuCoin official mobile app (available for Android and IoS), as well as on the web. So to get started, all you need to do is to install the KuCoin app or go to the KuCoin Exchange website and create a Spot Grid bot with your preferences.
KuCoin offers numerous ways for you to run the bot, including:
AI integration, where the system decides all the details based on the AI back-tested parameters.
Copy trading, where you can follow other profitable users and copy their settings at the click of a button.
Customized trading, where you can use your preferred parameters and set your own parameters manually.
How Does the Spot Grid Bot Work?
The KuCoin Spot Grid Trading Bot is an ideal way to trade the volatile crypto market. This trading bot swiftly buys and sells as the token's price fluctuates, placing a range of orders between two user-set price points, forming a "grid."
Spot Grid Trading Bot Example
For instance, if you set the bot to trade BTC, currently priced at $29,400, and select a range of $29,000 to $30,000 with an interval of $100, the bot can trade at ten different price levels. When BTC's price drops below $$29,400, the bot buys, continuing until the price hits the $$29,000 lower limit. If the price rises above $29,400, the bot sells, stopping at the $30,000 upper limit.
This strategy allows the bot to buy low and sell high, maximizing profits in a volatile market.
Note: KuCoin charges no subscription fee for the bot; only transaction fees apply.
When Should You Use The KuCoin Spot Grid Bot?
The KuCoin Spot Grid Bot is ideal for high-volatility markets, when the price of a crypto asset fluctuates within a predictable price range. Comparable to shorting a crypto future when bearish, the bot requires an estimate of the asset's price level over a period.
Here are some benefits of using the KuCoin Spot Grid trading bot:
- Automated Trading: The Spot Grid bot automates the trading process, eliminating the need for constant market monitoring and manual order placement. By automating the trading process, the bot also eliminates the human emotion of Fear of Missing Out (FOMO) in order placement and execution.
- Risk Management: Our advanced trading features enable users to manage trading risk by enabling the take-profit and stop-loss features. The Spot Grid bot operates within user-defined or AI-backtested parameters, reducing the risk of significant losses and panic-driven decisions.
- Trading Pair Support: The Spot Grid bot supports all trading pairs offered by the KuCoin Exchange, providing a wide range of trading opportunities.
- Stablecoin Trading: For those concerned about crypto volatility, the bot allows trading of stablecoin pairs like USDT and USDC, offering a lower-risk trading option.
- No Subscription Fee: KuCoin charges no subscription fee for using the Spot Grid bot, making it a cost-effective trading tool.
- 24/7 Operation: The bot trades around the clock, capitalizing on opportunities that may arise outside of regular trading hours.
- Global Trading Bot Community: When it comes to social trading tools, joining the global community can be greatly helpful in gaining more market insight and make better-informed decisions.
It's perfect for conservative traders, offering excellent risk management features and enabling profit from buying low and selling high at set price intervals, eliminating human error.
Creating Your First Spot Grid Bot On KuCoin
KuCoin trading bots can be accessed via the official mobile application (Android or IoS) and the web.
Step 1: Select the Spot Grid Bot
The first step is to log in to your account with your registered email ID or mobile number. Once logged in, click on the Trading Bot button on the app's home screen. Select the Spot Grid trading bot from there.
Spot Grid Bot Selection Process
Step 2: Explore the Spot Grid Bot Interface
Once you have entered the Spot Grid bot interface, you can see the number of Spot Grid bots currently running on the KuCoin exchange, as well as the highest APR earned by a bot on a given day.
If you want some more information on how the bot runs, you can watch a quick video on how to get started with the Spot Grid bot.
Scroll down to view the list of top users with the highest APR on that day. The APR number implies that the bot has made that much return on that day.
Click the Daily Ranking or the 7-day Ranking tab depending on what you want to see. KuCoin offers the option to copy profitable users’ settings and apply them to your Spot Grid in a single click. This is a good option if you are a novice crypto trader.
Exploring the Spot Grid Bot Interface
To get started, click Next at the screen’s bottom.
Step 3: Selecting a Spot Grid Bot Mode
If you chose not to copy other traders’ bot settings, and rather want to set up your own bot, KuCoin offers three distinct options:
Selecting a Spot Grid Bot Mode
Let’s explore all three modes in order to understand them better.
Auto Spot Grid Bot
Auto Spot Grid trading bot is a mode that lets AI determine the price intervals, the number of levels/grids, etc., based on the historical price action of the selected asset.
Starting an Auto Spot Grid bot is as easy as:
Selecting the crypto pair you want the bot to trade.
Checking the details determined by the bot.
Entering the amount of funds you want your bot to trade with.
Clicking Create to start the bot.
AI Plus Spot Grid Bot
AI Plus Spot Grid trading bot is similar to the Auto Grid trading bot, with the added feature of automatically adjusting the price range during its operation in response to changes in token volatility.
It adjusts parameters such as grid spacing and order amounts in real-time based on the coin price volatility, allowing it to generate continuous profits and manage risks regardless of price fluctuations and maximize profit for each trade. Last but not least, AI Plus prevents fund idling by adjusting for price movements whenever the price moves beyond the grid range.
Starting an AI Plus Spot Grid bot works the same way as the Auto Spot Grid bot.
Custom Spot Grid Bot
If you want to set your own Spot Grid trading bot parameters — KuCoin has you covered! Once you select the Custom Spot Grid trading bot mode, you will be able to determine your own intervals and the number of levels needed based on your analysis.
To start your Custom Spot Grid trading bot, do the following:
Select your trading pair.
Set your price range — the bot will stop buying if the asset drops below the low price and stop selling if it exceeds the high price. You can adjust your price range, if necessary.
Set the number of grids — this determines the number of orders the bot placed in the specified price range. The higher the number of grids, the higher the number of orders placed by the bot, and vice versa.
Enter the amount of funds you want your bot to trade with and click Create to start your customized trading bot.
In order to use the trading bot, you must transfer your funds from the main account to the trading account. You can directly transfer funds by clicking the swap button. As always, transfers between your accounts come at no cost to you.
Intra-Account Fund Transfer
Total investment represents the funds you want to put in the grid trading bot. The funds will be taken from your KuCoin trading account, and once the bot is done trading, all the funds will be transferred back to your spot account.
Manage Risks Better with KuCoin Spot Grid Trading Bot: Click on Advanced Settings to set up a specified Entry Price to start the bot. Once done, the bot will only get started after the asset reaches this entry price. Similarly, you can set up Stop-Loss and Take-Profit levels too.
Step 4: Starting Your Spot Grid Trading Bot
After deciding which bot you want to create, it’s time to start the bot. After implementing the parameters, clicking the Create button will lead you to the order confirmation pop-up window.
This is the final check before starting your Spot Grid bot. After clicking Confirm, the bot will officially start running. You can always check how your bot is doing in terms of the number of trades and profits by clicking on the Running tab at the bottom of the screen.
Running Bot: Overview
Alternatively, if you want to copy another trader’s bot parameters, head over to the daily or 7-day profit rankings, and click on the trader you’d like to follow. This will open up the Order Details tab where you will be able to create the bot with their parameters.
Following Other Traders’ Strategies
Pro Tip: Copy trading is an easier way to run a Spot Grid bot. Remember, the crypto market is highly unpredictable and subject to high risks and volatility. Future profits are not necessarily based on past trends, and new traders could lose money as the market trends change.
Monitoring and Making Changes to The Spot Grid Bot
You can review your bot's performance and increase your investments by clicking the Increase Investment button. The Parameters section clearly explains all the details related to your asset class and bot performance.
Adding Investments To Your Spot Grid Bot
You can also click on Details in order to check your open orders, order history, as well as previously-set parameters.
Open Grid Trading Bot Details Tab
Stopping the Spot Grid Bot
If you would like to stop the bot to take profit and manage losing risks, you can click the Turn Off sign in the top-right corner. You can choose among three withdrawal options, as shown below.
Stopping The Spot Grid Bot
If you pick the first option, the bot will return the existing BTC and USDT tokens separately to your trading wallet. In the second option, the bot will convert converts your existing BTC to USDT at the best market price and transfer all the USDT to your KuCoin trading account. The third option is similar, as the bot will convert your existing USDT to BTC, and the entire BTC lot will be transferred to your account.
Spot Grid Trading Bot: Pro Version
If you are an advanced trader and want to have an even more in-depth visual overview of your trading bot, KuCoin has something for you. You can use the KuCoin Trading Bot Pro version on PC — this will give you the option to view all your grids through a TradingView chart.
Spot Grid Trading Bot — Pro Version (Web)
Limitations of Using KuCoin Spot Grid Trading Bot
Spot grid trading bots such as the one KuCoin offers can be a useful tool for traders, but they also come with several potential cons, limitations, or risks:
Market Volatility: Grid trading bots perform best in ranging markets, where the price moves up and down within a certain range. In trending markets, especially during a strong trend or market crash, the price can move out of your grid. This is why setting up your advanced settings, such as stop-loss and take-profit parameters, is paramount.
Limited Control: While bots can automate trading, they lack the human intuition and ability to adapt to sudden changes in the market. They follow pre-set rules and cannot make decisions based on news events or sudden market changes — they are as good as the parameters you set.
Trading Fees: Grid trading places lots of trade orders at the same time. While the strategy is very effective, setting up your price range too narrow while the number of placed orders is too high might lead to high trading fees.
Make sure to take into account the trading fees when determining your Spot Grid crypto trading strategy.
Price Slippage: Less popular crypto pairs will have high volatility but lower liquidity, and thus the higher opportunity to not have the volume at the pre-set bot grid. This could lead to slippage.
Regulatory Risks: Depending on your jurisdiction, the use of trading bots may be subject to certain regulations. It's important to understand and comply with any such regulations to avoid potential legal issues.
Dependence: Over-reliance on bots can lead to a lack of learning and understanding of the market. It's important to continue learning about trading and not to rely solely on bots.
Remember, while bots can automate certain tasks, they are not a substitute for a comprehensive trading strategy and risk management plan.
A grid trading bot can greatly help take advantage of the price fluctuations using the grid trading strategy. The KuCoin Spot Grid bot automates this beautiful strategy, works 24/7, is customizable, and, as you saw, it is extremely easy to set up.
So what are you waiting for? Download the KuCoin app now, create a Spot Grid bot, and be a part of 8 million KuCoin bot users worldwide.
We hope you found this guide helpful and informative. If you need any additional help, please visit the KuCoin help center or contact our support team using the live chat feature at the bottom of the home page.
Keep reading our guides to learn more about KuCoin products, crypto trading & investing.
Frequently Asked Questions
1. Which Trading Pairs Are Suitable for Spot Grid Bot?
When using a spot grid bot for trading, it's important to focus on pairs with high liquidity and volatility. This will ensure that your transactions are smooth and profitable. Generally speaking, mainstream cryptocurrencies such as Bitcoin, and ETH enjoy a higher liquidity than less well-known altcoins. Additionally, make sure to check a crypto asset’s historical volatility to determine its potential for profit. Avoid low liquidity pairs and one-sided markets as they may limit your opportunities for buying low and selling high.
2. How Can I Pick the Right Spot Grid Entry and Exit Points?
The right spot grid entry and exit points depend on a variety of factors, such as market conditions, asset volatility, and your level of risk tolerance.
To determine the best entry and exit points, traders can use technical analysis tools like moving averages, relative strength index (RSI), and Bollinger Bands to identify trends and potential support and resistance levels. Fundamental analysis and sentiment analysis can also be used to evaluate where the market leans towards.
3. How to Choose the Correct Range and Number of Grids for the Spot Grid Trading Bot?
Choosing the correct range and number of grids for the Spot Grid bot requires careful consideration of market conditions and your personal risk tolerance. The range should be set based on technical analysis, such as identifying support and resistance levels and assessing market volatility. The number of grids should be set based on your personal risk tolerance and desired profit potential.
For example, if you are using the Spot Grid bot in a highly volatile market, you may choose to set a wider range and more grids to take advantage of short-term price movements. Conversely, if you are using the bot in a more stable market, you may choose a narrower range and fewer grids to minimize risk.
4. What Should I Do if the Spot Grid Bot Runs Out of Range?
If your Spot Grid bot runs out of range, the action you should take depends on the situation. If the grid range is too narrow, you should adjust your range and grid settings. If the bot ran out of range due to a short-term market pullback, you can keep the bot running and wait for the price to rise again.
If the market is trending down long-term, it may be best to close the Spot Grid bot and cut your losses. If you encounter a sharp drop, you can stop the bot, but avoid selling the crypto you hold. Additionally, always use take-profit and stop-loss orders to automatically protect you from the bot moving out of the grid.
Consider using the bot on a non-stablecoin trading pair like ETH/BTC to increase your coin holdings and reduce the average buying price. Regularly monitor the bot's performance and adjust settings as needed to adapt to changing market conditions.