Grid bot basics
The idea of the grid bot is simple: Prices are often mean-reverting. This means that while the price is fluctuating in a given price range, you can buy low and sell high repeatedly. A grid bot automates this process for you.
The base parameters for the grid itself are:
- The upper level of the price range
- The lower level of the price range
- Number of grid levels
The grid bot will then subdivide the price range into the given number of levels. At each level that is above the current price, the bot inserts a sell order. At each level below the current price, a buy order. As the price moves through these levels you either buy or sell. If the price moves a grid-level lower (buying at the lower level), the grid-level above that is reset to a sell order. This will essentially be the "sell high" to the "buy low" just executed by the bot. The same happens in reverse. This might be easier to understand with a video simulation:
Of course, the grid bot only makes money as long as the price remains in the given range. The grid bot does build up a position as it operates, which means you are exposed to risks if the price makes a big move outside the given range. For this reason, we have (optional) safeguards: the upside and downside exit price. These act similar to a stop loss. If the price goes lower than the downside exit price, or higher than the upside exit price, the bot will exit your position completely.
This sets up the essential strategic decision-making in running the bot. The bot exiting the position at the exit price will always be a loss. Trades made by the bot as the price fluctuates between grid levels will result in a profit. In other words, running a grid bot is a game of setting up the right upper and lower boundaries to ensure maximum price movement between grid levels and getting out before major price moves.
Work in progress
Bots are a major new feature on thalex, and we are still working hard on making a world-class user interface that makes them more intuitive and easy to use. However, we do want to put bots in the hands of early adopters eager to play with the basic version. The logic of the bot works well, they are just harder to use. Among the features still missing in the user interface are:
- PnL overview of a given bot
- Overview of trades executed by a given bot
- Ability to name/label bots
These features and many more are still in active development and will be coming before we make bots available to all users.
Important details and restrictions
Aside from the features we are still working on, there are a number of important details and limitations to the grid bot that users should be aware of:
- Grid bots use your accounts' position data for their own trading decisions. This means any manual trading you do on an instrument where a gridbot is running will affect the gridbot's behavior. We recommend against manual trading on an instrument that has a running gridbot, unless you know what you are doing.
- Only a single grid bot can be run on a given instrument.
- Grid bots are currently configured to only run for small sizes. We will increase these limits as we mature the bots.
Open to early adopters
Like what you are seeing? We have two ways to play with grid bots. First, grid bots are available for everyone to in our paper money Testnet environment.
Second, we are enabling grid bots in the exchange itself for eager early adopters. If you would like to start using the grid bot and are not deterred by the basic UI currently available, please reach out to us at [email protected] or send us a DM on Telegram!
API Bot trading
If you are a Retail Quant who prefers to trade using the API, you too can enhance your trading using bots! Every bot action available via the UI is also available through our API. See our bots management, general explanation of bots, bots subscription and grid strategy description for details, and reach out to us to become an early bot adopter!