Hello there,

I do geeky experiments with trading and cryptocurrency every then and now. I often perform these experiments on popular platforms like Binance, Bitget, and others. Such experiments aim to check and understand their features' working and whether they hold ground. This time I conducted my experiment on Binance bot trading and tried to understand its working and how one can do the same by managing risks.

The inspiration to write this blog came from @alokkumar121 I follow his Leo blogs regularly.

Disclaimer - I am not advising you to invest in assets or experiment with your capital. Please do your research as well.

Source - Image made with Wepik AI

I conducted this experiment for a month and here are the findings summarized in the pros and cons format. I have given the best strategy which I see to be handy in bot trading. Again do your research, do not follow my strategy blindly. I used $100 as my initial capital. There are spot and futures grids. I tested the future bot trading grid.

I used it extensively for a month, switching between different coins and strategies and it worked well. My all-time high wallet balance was $170 and my all-time low balance was $40.

Bot trading feature is available in Binance. Go to Binance and search bot trading and there you will get instructions to understand how the bot works.

Findings/Pros

• It's free and works automatically. The only manual thing is setting the price range.
• Good and easy-to-use interface, a lot of futures trading pairs available.
• Manual, AI, and popular grids available i.e. grid parameters are based on AI or you can set them manually.
• Options to choose between Arithmetic and Geometric methods.
• Arithmetic works like - in a simple way - elevator system i.e. you enter from the 2nd floor and you exit on the 3rd floor. The gap between each floor is fixed and based on that you can do short or long. Good for sideways market conditions.
• Geometrics uses ratios or in a simple way percentages. It checks the changes in the price of a coin in a percentage manner i.e. 2% positive changes in prices or price has changed by 2% from the last price. Good in the hiking market.
• You can set the range and the trading bot works well in a sideway market.
• You can set the bot for long, short, or neutral trends. Based on price range it will automatically open buys and shorts orders.
• On-time mail alerts for liquidation or growing risks.

Cons

• AI data is not available for a new coin. You have to put the price ranges manually.
• Alert mail is sometimes delayed if the price goes above or below your price range. Eg, your price range of BTC is $42,000 - $48,000 and the price goes below $42,000 or above $48,000
• Understanding the fees charged for every order and the profit gained from every closed order is slightly confusing.
• The compact bot trading view does not show the actual figure. Eg. your total unrealized PnL is -$42 but the compact view will show figures of the latest opened order i.e. details of only one running order/trade.
• The bot trading interface is slightly buggy and takes time to show you the total capital you hold.
• Trading bot has a separate wallet from spot or future. Hence you may be puzzled in finding the correct wallet.

Best Strategy

• If you are sure that a price is about to grow or go high then a geometric grid based on a Long strategy will yield you more profit.
• Similarly, you can go with a Geometric grid with a short strategy. These are parameters you have to select from UI.
• If you want a specific amount of profit from each trade that your bot will do - select Arithmetic strategy.
• If you are sure that the price of a coin will do ups and downs in a given range i.e. sideways only then select a neutral strategy with an arithmetic or geometric grid.
• Start with good capital i.e. with at least $300 and properly manage your risks, then only you will see good gains.
• In case of a bull run or bear run, avoid bot trading.

Why no screenshots?

Trading cryptocurrency and using the Binance platform is banned in my country. Providing the same details will get me in trouble for violating the nationwide guidelines on cryptocurrency.

However, if you want to understand more about Binance bot trading, look for the video made by MoneyZG on Binance grid bot trading available on YouTube.

Happy Trading! See you in the next Leo blog!

Posted Using InLeo Alpha