2024-10-20 08:28:55Bybit offers a one-stop platform for automated crypto trading — Trading Bot. You can choose from various types of pre-configured and code-free trading bots that provide effective trading strategies that can save time and increase your return on investment. Depending on the trading strategies and market trends, trading bots can often provide a steady stream of profits, minimize risks, and execute trading operations automatically so traders don’t have to constantly monitor their positions.
In this article, we’ll dive into the main types of crypto trading bots that Bybit offers — Grid Bot, DCA Bot, and Martingale Bot.
What are Grid Bot, DCA Bot, and Martingale Bot?
Grid Bot works by placing buy orders below the reference price of a crypto asset and sell orders above the reference price. These buy and sell orders are equidistant from each other (called “grids”) and can be set within a strict price range. Grid bots are designed to take advantage of price volatility, i.e. sideways price movements of crypto assets. As the price rises, it triggers a sell order, and a new buy order is placed below the crypto asset’s price to essentially “replace” the most recently executed sell order. Similarly, as the price drop, it triggers a buy order, and a new sell order is placed above the crypto asset’s price to “replace” the most recently executed buy order. The difference between buy and sell orders (grids) is the profit.
DCA Bot involves purchasing a fixed amount of a particular cryptocurrency at regular intervals, rather than timing one large purchase. By using DCA bots, you gain the flexibility to set the frequency and amount of your trades. This means that you can select how often you want to make purchases, giving you the ability to choose a frequency and amount that suits your investment strategy and risk tolerance.
Martingale Bot is built on the traditional Martingale strategy to automatically place an additional order when the market price experiences a specific percentage increase or decrease in an attempt to recover all losses and eventually make a profit when the market moves in your favor. However, considering its unpredictable nature, it can result in bigger losses if your account runs out of funds before the bot can recover the losses or if the bot settings are not fitted for the current market movements.
Differences Between Bybit Trading Bots
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Types of Bots | ||||
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Description |
Allows you to place a series of buy and sell orders in either price direction, creating a trading grid of orders waiting to be triggered in the Spot market. |
Similar to the Spot Grid Bot, this trading bot operates in the Perpetual Contract market. There are three (3) modes: ong, Short and Neutral. |
Execute buy orders at regular intervals, and at a predetermined amount, regardless of the current market price. |
Places an additional orders based on the multiplier when the market price experiences a specific percentage increase or decrease until the Profit Target per round is reached, triggering the execution of the Take Profit order and concluding the current cycle. |
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Market |
Spot Market |
Perpetual Contract Market |
Spot Market |
Perpetual Contract Market |
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Trader’s Profile |
- To own an asset and profit from its price volatility |
- To amplify profits by using leverage and take a systematic approach to trade and capitalizing on the market |
- To gradually build a position in increments over time |
- To recover previous losses and secure a profit on top of the initial investment |
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Liquidation Risk |
No |
Yes |
No |
Yes |
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Order Type |
First order: Market Order Subsequent Order: Limit Order |
First order: Market Order Subsequent Order: Limit Order |
Market Order |
First Order: Market Order Subsequent Order: Limit Order Last Order: TP Market Order |
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Fee |
There are no fees for using trading bots. However, please note that all bot order executions will be subject to trading fees, while Perpetual Contract trading will also incur funding fees. For more information, please refer to Bybit's Fees That You Need to Know. | |||
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Benefits |
1. Grid Bot offers 24/7 automation to buy low and sell high in the market. This guarantees that you won't miss any arbitrage opportunities as the bot continue to operate even if you're not actively managing your trades. 2. Grid Bot can help carry out disciplined and controlled trades, minimizing the involvement of emotions in trading. For more details, please visit here. |
DCA Bot helps users lower their costs without trying to buy at the lowest price. It's difficult for traders to guess the market tops and bottoms. Instead of timing the market, use the DCA bot helps you to consistently invest in your preferred cryptocurrencies. For more details, please visit here. |
1. The Martingale Bot can be easy to set up, especially if traders use the AI Strategy which lets our system automatically set up the bot’s parameters. 2. The Martingale strategy allows one to recover past losses and earn a profit on the initial investment with just one win, making the Martingale bot an interesting tool for a rapid recovery of funds. For more details, please visit here. | |
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Disadvantages |
1. The Grid Bot will temporarily stop the operations if the price exceeds the upper or lower limit price. It will resume once the price returns within the designated price range. 2. The grid trading strategy requires to reserve a certain amount of funds, thus reducing the efficiency of the use of funds. If the number of grids set by the user is too few and the price fluctuates between two (2) points (far away from one another), the system will not automatically place an order. |
The market generally experiences upward trends over time. Consequently, if you invest a larger sum of money early on, it is more likely to yield better results compared to smaller amounts invested gradually. |
1. The Martingale Bot is based on a betting-based method which entails higher risks as its result is unpredictable and depends on the market conditions. As such, it needs to be more carefully monitored and managed to prevent bigger losses. 2. The inherent risks of perpetual trading can be amplified when using a Martingale Bot as it is possible to use a leverage up to 50x and liquidation can be triggered if the trader’s funds are decreasing. | |
Risk
While trading bots can be valuable tools, it's essential to acknowledge that all investments come with inherent risks. You should carefully read and fully understand the Trading Bot guide, ensuring that you implement risk control measures and trade rationally.
It is the trader’s responsibility to comprehend these risks and conduct thorough research before participating in trading activities. By taking on this responsibility, you can make informed decisions and navigate complex markets more effectively.
Yes
No