The main advantage of trading on the grid is that it requires just a little of market forecast - in what direction the price is likely to go in the future. That's why it is a great tool for beginners and regular traders.
But there are always some risks involved when you let this strategy be automated especially in unfavourable market condition. A sudden price spike or drop may, and will affect your results. To protect your investment you can use either stop loss or trailing option.
However, grid trading offers one of the easiest and time-tested trading approach. In the long run, it can provide substantial results.
The general idea of this strategy is to earn an income from any market movement within the price range, or a so-called price channel. It becomes less effective or even severe in strong trend reversals. And that's why it is important to understand when you want to create or stop your bot.
For more information about the grid trading strategy and how Bitsgap executes it, please visit our other article.