How To Set Price Ranges For Crypto Grid Bots

Price Ranges Matter

Choosing the right price range for your cryptocurrency grid bot can be a constant struggle!

When done right it reduces risks and improves returns! It ensures your bot adapts to changing market conditions.

In this article, you’ll learn three strategies for setting price ranges:

• Price action levels
• Indicator-based
• Fixed price ranges

Plus, I’ll show you when to use each strategy depending on the coin and market trend.

What Are Crypto Grid Bots?

Grid bots auto buy low and sell high within a set price range.

They place a series of orders (called grids) in that range and aim to profit from small price movements. Kind of like scalping, but more hands-off.

As the price goes up and down within this range, the bot buys and sells at each grid to profit from market volatility.

They’re great for sideways markets. Even in bull or bear trends, you’ll often spot ranges that are perfect for grid trading.

Price Action Levels

Key Support and Resistance Levels

One of the most effective ways to set grid bot ranges is by identifying key support and resistance (S/R) zones on a chart.

This method relies on a Top-Down Analysis by finding S/R levels from bigger to smaller time frames. You can start with monthly, then weekly, and finally daily charts (M/W/D).

For example example use Monthly, Weekly and Daily and chart out 4-5 key levels.

Look for price levels where candles close or wicks near the same level. These are often reliable zones for finding the highest and lowest price for your range.

Order Blocks and Reversals

Beyond S/R levels, other price action concepts can help you find demand and support zones.

Study a bit of Technical analysis and you will find plenty!

Here are three that I use often:

• Order blocks
• Reversal patterns
• Psychological whole numbers

Best Use Case

This method is best suited for:

• Coins with long price history
• Markets where clear ranges are visible

Avoid this approach with new coins added to the exchange that don’t have a lot of historical data yet.

Indicator-Based Ranges

ATR (Average True Range)

Indicators like the ATR can help you calculate volatility-based grid ranges.

Here’s how:

1. Multiply the current ATR by 2 or 3
2. Add and subtract that value from the current price
3. Use the result to set your range

Here’s the formula for calculating the high and low price:

High Price = Price - (ATR x Multipler)
Low Price = Price + (ATR x Multiplier)

Best Use Case

Sometimes this can outperform fixed ranges during crashes and pumps. But the ATR changes all the time and what’s good right now might not be optimal tomorrow.

Unless you are tweaking your grids a lot or using a bot that auto adjust based on ATR value this won’t be ideal. It still gives you a ball park idea for price ranges.

You can use a simple Google Sheets setup to automate ATR-based calculations for your bots.

Fixed Percentage Ranges

Asymmetric vs Neutral Ranges

Fixed ranges are simple yet effective. You define the price ranges using fixed distances from the current price.

There are two type of ranges you can use:

• Asymmetric: Different distances for buy/sell zones (Eg. -30% and +20%)
• Neutral: Equal percentage up and down (Eg. ±20% from the current price)

For example with an asymmetric range, 30% down from current price would be your buy zone. 20% upwards from the price would be your sell zone.

With a neural range you use the same distance from the price for the buy and sell zone. An example would be 20% upwards and downwards from current price.

Historical Averages

Another option is to analyze price movements to find the typical swings. You can then use the average price increase and decrease of a coin as a range for your grid bots.

Best Use Case

Fixed ranges work well when:

• The asset is in a low-volatility or accumulation phase
• You plan to rotate bots frequently

Be cautious during trending phases where price may break beyond your set range.

Choosing the Right Strategy

You don’t need to lock into just one approach. Mixing and matching can offer better results depending on current market behavior.

Down below you can see a framework to use the different strategies mentioned on the post.

Grid Bot Optimization

After setting your price range, consider using a tool like WunderTrading. This tool allows you to find the best number of grids for specific price ranges and backtest it.

You can go further and test trading pairs to see which would have performed best recently.

Here’s how it works:

1. Select the grid bots
2. Choose your exchange
3. Trading pair
4. Click optimize

The best strategy will depend on the asset and the market environment.

Experiment, backtest, and adapt. The best grid bots are the ones that you can build a system around for different conditions.

Build yourself a framework, to be used over and over for consistent profits. That was my goal when creating the Grid Bot Template!