Best Indicators For Crypto Grid Bots

Are you tired of trying to make profits with your crypto grid trading bots? Struggling to find the right indicators to use? 

In this post I’m going to show you how to use seven powerful indicators to make your bots more profitable.

Crypto Grid Bots are a great way to automate your trading and make profits over medium and long time frames.

To make the most of your grid bot, you need to use the right indicators to:

1. Set your price ranges
2. Pick the best time to start a bot
3. Pick the best time to close a bot

Stick around until the end! Download Crypto Grid Trading bot template. It will help you research pairs, set up bots, and become more profitable.

ATR

ATR measures the volatility of an asset, which can be useful in setting price ranges.

A higher ATR value suggests greater volatility and a wider price range. A lower ATR value suggests less volatility and a narrower price range.

In other words, the ATR can help traders gauge the level of risk associated with a particular asset or trade.

A higher ATR value may indicate that a trade has a higher potential for profit, but it also comes with greater risk.

A lower ATR value means a lower risk trade, but with lower profits. This does not take into account other indicators or your own analysis!

Usually to use ATR for price ranges we need to multiply the ATR value for a number such as 2, 3 or 3.5. There isn’t a multiplier that fits all use cases, but those are good recommendations.

Let’s assume we are using the following formula:

ATR x Multiplier = X

Looking at the Cardano ($ADA) chart above the ATR value is 0.0079. Let’s use a 3.5 Multiplier for this example.

ATR = 0.0079
Multiplier = 3.5

0.0079 x 3.5 = 0.02765

Now to determine the Higher Price you need to add that number (0.02765) to the current market price.

Price = 0.36
X = 0.02765

Price + X = Higher Price
0.36 + 0.02765 = 0.38765

For the Lower Price subtract that number (0.02765) to the current price.

Price = 0.36
X = 0.02765

Price - X = Lower Price
0.36 - 0.02765 = 0.33235

Now with both the Lower Price and Higher Price calculated you have your trading range for the grid bot.

The best thing about this indicator is that your range will always follow the volatility of a pair. If there’s more volatility you get a wider range or vice versa as you can see on the previous table.

You can also apply a similar logic to the number of grids.

For example let’s say you often use 10–30 grids:

• As the volatility increases use a number closer to 30
• If there’s less volatility decrease the number of grids

Supertrend

But what if you want an indicator that will help you visualize the range based on an ATR multiplier? Well you can use the Supertrend.

SuperTrend is a trend-following indicator that uses the Average True Range to create a line around the current price:

• The green line represents an uptrend (bullish)
• The red line a downtrend (bearish)

This line can also be used to set buy and sell orders, and it even shows a BUY and SELL signal.

This works well for trending markets (up and down). Not so much for ranging (or sideways) markets at least for trading signals.

You can use the price that sits right on those lines as a range for your grid bot.

It might be a good idea to use a percentage below or above the lines. Sometimes, the price might go a bit below the red line and still turn out to be an uptrend.

With this indicator you should also consider using:

1. Trailing up to keep trading upwards if the coin does end up increasing in price
2. Buy level as reference and then set a higher price and more grids to catch bigger price moves

Both options will make you more profits if the markets work in your favor!

ATR Percentile

The indicator analyzes past ATR values to understand historical volatility. It then shows how the current ATR compares by ranking it as a percentile.

Profiting from volatility is usually the goal with grid bots. So you can set your own rules to enter only when the ATR percentile is above a certain value.

This would be a more helpful indicator to use during your pair research phase.

That way you can avoid getting stuck with pairs that have low volatility, and may end up not touching the grids.

Colors can also help you visualize that level, and you can change them on the indicator settings.

You can spot low volatility or high volatility zones by looking at:

• ATR percentile increases
• ATR percentile decreases
• Comparing it to previous ATR levels and the price

Bollinger Bands

Bollinger Bands use a Moving average (MA) and standard deviation to create upper and lower bands around the current price. These bands can be used as a range for setting buy and sell orders.

The bands can help you identify:

1. Market conditions and volume trends
2. Buy and sell signals
3. Periods of low and high volatility

Market conditions and Volume Trends:

• When the price goes above the upper band it is overbought
• When the price goes below the lower band it is oversold

There can be a reversal or corrections on those levels (price goes on opposite direction).

Buy and sell signals based on price movement:

• Buy Signal: Price touches or crosses the lower band and then begins to move back toward the middle band.
• Sell Signal: Price touches or crosses the upper band and then begins to move back towards the middle band.

Periods of Volatility:

• Squeezes or contractions: Upper and lower bands move closer together. It indicates a period of low volatility.
• Expansions: Upper and lower bands move further apart. This indicates a period of high volatility in the market.

This can be a sign that the market is about to experience a significant move in one direction or the other. You can use other indicators to confirm the direction.

To set a range you can use the Daily chart because the candle represents 1 day. If you use a smaller time frame your range would be very small.

EMA and SMA

EMAs and SMAs can be helpful to detect trends. Crossover points are critical reference levels for identifying buy or sell signals.

A bullish crossover is when:

• Shorter-length EMA (e.g., 9 EMA) crosses above a longer-length EMA (e.g., 20 EMA) and
• Price is above another long-term EMA (e.g., 50 EMA).

This indicates upward momentum and a potential buy opportunity.

(Bearish Crossover Chart)

A bearish crossover happens when:

• Shorter-length EMA (e.g., 9 EMA) crosses below a longer-length EMA (e.g., 20 EMA)
• Price is below another long-term EMA (e.g., 50 EMA).

This suggests downward momentum and a potential sell opportunity.

EMA length refers to the number of trading days, and you can change those numbers to suit your needs.

• Shorter EMAs (e.g., 9 EMA) give more weight to recent prices, providing quicker signals but more noise.
• Longer EMAs (e.g., 50 EMA) react slower, offering a clearer view of the trend.

EMAs use a weighted average that places more emphasis on the most recent price data. SMAs treat all price data equally.

It is also possible to use previous Bollinger bands levels as reference for planning future price ranges for your bots.

Fibonacci Retracements

Fibonacci retracement levels assume markets retrace a predictable part of a move. After the retracement, the market may continue in its original direction.

Traders can use the retracement levels to set buy and sell orders based on support and resistance levels.

You can also select a price range between these levels. If you want to make more trades choose a smaller range or bigger for fewer trades.

So you could trade between two of the lines or actually set your range to be from the lower line up to the higher one.

For an uptrend:

• Start from the lowest point (swing low)
• Draw the line-up to the highest point (swing high).

For a downtrend:

• Start from the the highest point (swing high)
• Draw the line down to the the lowest point (swing low).

Other Indicators

These are some indicators that might be useful for crypto grid trading bots. Now, setting prices ranges should be an easy task!

Some of these you can sue for swing trading, day trading and trend following. In fact, you can use many indicators to check market conditions and execute your trades.

Choosing the right trading pairs and pairing them with these indicators can increase your profits quite a bit!