How Grid Trading Works in Crypto

Grid trading is a strategy designed to profit from market volatility by placing a series of buy and sell orders at predefined price intervals—forming a "grid." When the price dips, the bot buys; when the price rises, it sells. Over time, this repetitive buy-low/sell-high behavior aims to generate steady profit.

In crypto, where volatility is constant, grid trading can be especially effective. It's popular among both manual traders and users of automated trading bots.

Understanding the Concept of Grid Trading

At its core, grid trading is all about taking advantage of price fluctuations without needing to predict market direction. The strategy involves setting up a grid of buy and sell orders at regular intervals above and below a base price. Each order is designed to take small profits when triggered.

Imagine you’re trading Ethereum (ETH), currently priced at $2,000. A basic grid setup might look like this:

• Buy at $1,950 → Sell at $2,000
• Buy at $1,900 → Sell at $1,950
• Buy at $1,850 → Sell at $1,900

Each lower buy price is paired with a sell price slightly above it. As the price moves down and up again, these pairs are activated sequentially—buying low and selling slightly higher to generate profit.

Grid trading works best in sideways markets, where price moves back and forth without strong trends. It can still function in trending markets, but it requires more careful configuration to avoid accumulating too many losing trades in one direction.

A critical factor is setting the right spacing between grid levels. Too tight, and you might overtrade and run out of capital. Too wide, and you might miss opportunities. Risk management, such as setting a maximum number of open trades or using stop-loss mechanisms, is also important.

Grid Trading in The Trade Pilot: Rebuys Instead of Grid Levels

In The Trade Pilot, the grid concept is implemented using a more flexible and user-friendly feature called rebuys. Rather than manually defining specific grid levels, users simply choose how many rebuys they want the bot to make for a given crypto pair.

Each rebuy functions like a grid level: when the price drops, the bot can automatically rebuy the asset, positioning for a future sell at a profit. What makes The Trade Pilot stand out is how customizable the rebuy logic is:

• Merging Rebuys: You can choose to merge rebuys with your current position. When this option is on, the bot recalculates the average purchase price and updates the sell order to reflect the combined quantity and the new target sell price based on your take profit settings. This allows for more strategic exits and simplified position tracking.
• Separate Transactions: If you prefer, you can disable merging. In that case, each rebuy is treated as an independent trade, with its own take-profit target. This is closer to traditional grid trading, where each level operates on its own.
• Rebuy Multipliers: You can assign a multiplier to increase your investment size with each rebuy. This approach allocates more funds as the price drops further, helping to accelerate recovery if the market rebounds.

While it doesn’t use the term "grid levels," this customizable rebuy logic follows the same underlying principle: buying as the price falls and selling when it rises, repeatedly capturing small gains.

Example 1: Grid Trading With Merging On

Let’s say you're using The Trade Pilot to trade Bitcoin (BTC), currently priced at $30,000. You configure your bot like this:

• Rebuys: 3
• Rebuy Distance: 3% price drop
• Merging: Enabled
• Rebuy Multiplier: 1.5x per level
• Take Profit: 2%

Initial buy:

• $100 at $30,000

As BTC drops:

• Rebuy 1: $150 at $29,100 (3% drop)
• Rebuy 2: $225 at $28,227 (6% drop)
• Rebuy 3: $337.50 at $27,380 (9% drop)

Total investment: $812.50
Total quantity bought: approx. 0.02883 BTC
Average entry price: ~$28,169
Sell target (2% above avg): ~$28,732

With merging on, the bot places a single sell order for the total BTC amount at $28,732, aiming for an overall 2% profit. This strategy is ideal when you want to simplify your portfolio and manage fewer trades while still averaging down.

Example 2: Grid Trading With Merging Off

Now let’s consider the same configuration but with merging disabled:

• Rebuys: 3
• Rebuy Distance: 3%
• Merging: Off
• Rebuy Multiplier: 1.5x per level
• Take Profit: 2%

Initial buy:

• $100 at $30,000 → Sell target: $30,600

As BTC drops:

• Rebuy 1: $150 at $29,100 → Sell target: $29,682
• Rebuy 2: $225 at $28,227 → Sell target: $28,791
• Rebuy 3: $337.50 at $27,380 → Sell target: $27,927.60

Each trade has its own profit target and operates independently. The bot places a separate sell order for each rebuy based on its own entry price. This approach gives you more flexibility and clarity into how each investment performs but requires more capital and tracking.

Merging vs. Non-Merging: Key Comparison

Both methods have their use cases. Merging is ideal for traders who want fewer, larger trades with simplified management. Non-merging is better for those who prefer precise control and diversification.

Merging On:

• Combines all rebuys into a single position
• Simplifies tracking and management
• Aims for overall profit based on average price
• Often sells faster as the average price drops
• Ideal for users who want cleaner trade history

Merging Off:

• Each rebuy is a separate trade
• Individual sell targets and execution
• More detailed insights into each entry
• May take longer to close all positions during a recovery
• Great for users who want more control and trade-level analysis

Is It Still a Grid Without Grid Levels?

Yes. While The Trade Pilot uses rebuys instead of predefined grid levels, the functional behavior is the same: systematic entries at intervals as the market drops, with profit-taking on rebounds. The flexibility of merging and multipliers makes it more dynamic than rigid grid setups, but the core logic remains grid-based.

So, even if the terminology differs, The Trade Pilot’s approach can absolutely be considered a modern take on grid trading.

Pros and Cons of Grid Trading (and Rebuys)

Pros:

• Works great in ranging/sideways markets
• Captures profits from price swings
• Fully automatable
• Can be customized with merging and multipliers

Cons:

• May underperform in strong trends
• Risk of accumulating losses if market trends sharply down
• Needs proper configuration to avoid overexposure

Final Thoughts

Grid trading—whether through traditional grid levels or The Trade Pilot's rebuy system—is a proven way to profit from crypto volatility. With customization options like merging, multipliers, and hosted bots, The Trade Pilot takes this strategy to the next level.

If you want to turn volatility into opportunity without constant market watching, The Trade Pilot’s grid-style rebuys offer a flexible, powerful solution.

Read also: Maximizing Profit with The Trade Pilot’s Grid Feature