There is a psychology in day crypto trading, but you must learn the ropes of day trading to gain that competitive edge, even if you’re a beginner.
Having the controller with crypto trading sets the tone for Stepgrid strategy because you mainly rely on Price Action. With the right strategy in place, you can profit from volatility, erratic market price movements, and even discrepancies with day crypto trading.
What is Day Crypto Trading?
Day crypto trading speculates on market movements and financial assets on a single day. Looking at short-term price movements that go on for hours and placing multiple orders within the day is how a typical day would look like for a crypto day trader. Your strategy would depend on price movements to rake in profit over the long term.
With thousands of cryptocurrencies to trade, this is perceived as a booming market with a massive opportunities to trade for profit. Compared to traditional markets, digital assets like cryptocurrencies have been growing immensely in terms of liquidity, making it an attractive market for crypto day traders.
Stepgrid Strategy – A Notch Higher Than Average!
You can do it like the others would or take it up a notch with the Strepgrid strategy for day crypto trading.
The logic of this strategy is pretty straightforward because you only have to BUY once the coin price goes down at a certain “x” amount of price and then SELL once the coin price increments by the same “x” amount.
Stepgrid strategy is easy to set up, and you can trade profitably right away! This creates a ton of opportunities for day crypto traders. You execute a trade with the Stepgrid strategy once the price moves more significantly than the standard step size. You can manipulate step sizes manually or set them automatically. With this strategy in place, you get to automate price trailing each step up or down.
The idea revolves around trading each time you see a relevant price movement. So, even if the price movement falls below the break-even price, that still becomes your cue to take advantage of these tiny increments or steps to sell some percentage of a bag at profitable rates in contrast to the buy orders.
There are different configurable options with the Stepgrid strategy that make it stand out from other Gunbot techniques.
Price Action Trading
Stepgrid strategy follows Price Action Trading principles such as the following:
- Price is always considered as “king” for Price Action Traders. It’s non-negotiable, and with that, everything else becomes an option.
- Price Action Trading refers to understanding the friction between buying and selling so you can easily spot trading opportunities and make a profit!
- Price Action Trading creates a structure or blueprint for trading despite changing market conditions.
Stepgrid Strategy with Auto Step Size
The default Stepgrid setting would follow this order:
- Green – buy
- Orange – sell
Using the Stepgrid strategy, here is how the trading behavior would look like:
- If the trading pair has not had prior trading activity, the reference price for the steps will follow the original price the pair had right when the strategy was initiated. The steps up and down are strategically placed on the last order rate.
- If the price movement goes down or moves down a step, it would automatically place a buy order for a trading limit at 1x and buy trailing as soon as it finishes.
- If the price movement goes up while it’s below break-even, it would automatically start to sell trailing and then place a sell order once the trailing is done.
- So, the sell order would be 1x the trading limit in size for a below break-even price.
- Market or price behavior would still be the same when the price is above break-even, but the order quantities can go beyond the 1x trading limit. Hence, if the price reaches a complete step above the break-even price, it will automatically close a bag.
- Suppose the price would go up enough to reach that maximum point or level wherein the next buy step happen to go above that break-even level. In that case, the buy step is implemented as a stop in profit with positions beyond the 4x trading limit.
- The bot automatically buys again when it’s in no position once the next buy or sell step has been reached.
- The bot continuously accumulates until the maximum buy count is reached, or at such time it runs out of funds. In that case, each new buy order will decrease the break-even price. With that being said, balance management is extremely crucial when you trade. So you have to ensure that you have ready funds for the buy orders.
- The best way to start with the Stepgrid strategy is to zero coins balance. Yes, it’s not recommended to have an existing balance when you start.
- Do note that the following trading targets are seen on the chat. First, target lines are constantly moving, so they usually represent the latest targets.
Getting Started with StepGrid Strategy
To get started with StepGrid, you need the following setup:
- Trading Limit
- Setting Description
- Amount to invest for each buy order
With a USDT-BTC pair, 40 USDT would mean that the trading limit is 40. So it’s essential to understand that you have to set the trading limit to be higher than the minimum volume to sell.
Learn the ropes of Stepgrid strategy by understanding these terminologies:
- Max Buy Count – This sets the limits with buy orders. For instance, if you set the max buy count to 800, the bot can also execute up to 800 orders per row.
- Min Volume to Sell – Setting this up allows you to keep the small balances at the backburner. Once you set the minimum order size for the pairs, you instruct the bots to ignore the small balances which cannot be sold.
- Auto Step Size – The Auto Step Size aims to predict or speculate the next steps that could work. The Auto Step Size is smaller when not in position than in place. Once this setting is disabled, you may set up a manual step size.
- Manual Step Size – Setting up step size manually for buy and sell orders.
- Value – The value would be synonymous with price. For example, when you set up 600 on USDT-BTC, the bot trade would also be 600 USDT whenever there is a relevant price movement.
- Enforce Step Size – Once this setting is enabled, price trailing would not be allowed to trigger any trade with rates that are less than the prevailing step size. Having such in place ensures that there is a set distance in between orders. In general, enforcing step size controls buy and sell trailing.
- Stop After Next Sell – This action stops the trading of pairs once the position closes. No buy orders will be placed with zero remaining balance to sell when this is enabled. However, partial sell orders will not stop the bot from its activity with the current position.
- Period – The default period is always set to 15. When you change the default settings, use only supported or accepted values.
- SMA Period – The default number of candles is 50, which are figures used to calculate support and resistance levels. With the Stepgrid strategy, support and resistance levels will calculate the suitable trailing ranges.
- ATR Period – Also referred to as Average True Range, is used to determine the appropriate auto step size. The ATR is usually set to 50, meaning lower values could cause wild fluctuations in step size.
- Keep Quote – Refers to keeping a specific number of units for selling. For example, when you set the Keep Quote at a number more than 0, the number of units will be on hold once the next sell order is executed.
Fix Your Eyes on the PRICE
It’s imperative to calculate your trading limit and run that for weeks to have a feel of the number of buys you should expect and to have enough buffer in case of losses. With Stepgrid strategy, you no longer need to check on trading indicators, and you only need to fix your eyes on the PRICE. In that way, you will have a more objective market lens.