How To Profit With A Reverse Grid Trading Bot In A Bear Market

Taking the above example of a BTC/ USDT pair, BTC is the base currency while USDT is the quote currency. In forex, the base currency represents how much of the quote currency is needed for you to get one unit of the base currency.

In a conventional trading bot, profits are measured using the quote currency (USDT), focusing on whether the amount of USDT held increases. On the other hand, a reverse grid bot uses the base currency (BTC) to measure the bot’s revenue, and focuses on whether the number of BTC held increases (from the automated process of selling the coin, buying it back again at a cheaper price, and repeating the process). This is because the initial investment comes from the base currency (BTC) in a reverse grid trading bot, in contrast to the quote currency (USDT) in a conventional trading bot.

I invested in a reverse grid trading bot using 0.005 BTC a month ago, when BTC was at $22747, using customized settings as above. To date, it has yielded a grid profit of 0.000508 (10%) from the process of initially selling the coin, buying back later when it dips, and selling again when price rises in a predetermined price range set earlier. Combined with the unrealized profit of 0.0001708 BTC (3.41%) from the profitable sales, the bot has yielded a total annualized APY of 159% thus far.

Alternatively, access the trading bots in the Bot section under ‘Trade’ in the Pionex app as shown below.

Select ‘Create A Bot’ to choose from a wide variety of bots. In the case of a reverse grid trading bot, select ‘Reverse Grid’ and input your desired parameters.

Some Technicalities

The proportion of the coin that is sold by the trading bot on its initialization is decided by the lower and upper price set. The higher the current market price relative to the price range over which the bot operates, the more the coin is sold off into USDT; and conversely.

In a bearish market, set a lower limit for the lower and upper price range so that there is more room for the bot to arbitrage when the price dips.

If you want to catch subtle price fluctuations, be sure to maximize the number of grids. However, increasing the number of grids and expanding the operating price range of the bot necessitates a greater amount of investment. If the minimum investment becomes too high, consider reducing the number of grids and/ or the price range over which the bot operates.

As an example, I have set the lower price limit for my BTC/ USDT bot to $12000, with the higher price limit to $25000 (the market looked extremely bearish a month ago, hence I decided to sell most of my BTC by inputting lower values for my higher price limit). I availed 150 grids (the maximum number of grids available), which gave me a calculated profit of 0.49% per grid.

As always this is not financial advice! But simply investment platforms I have invested in and have found worthy of sharing with. Do your own research before investing and never deposit money you cannot afford to lose. Feel free to ask me any questions below.

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