What is a grid trading bot, and when does it lose money?
BotIndex editorial team · Editorial policy
A grid bot places buy orders below the current price and sell orders above it at fixed steps. It earns a small profit each time price moves one step up after a buy. It works while price moves sideways and loses value when price falls below the range.
How a grid works
You choose a lower price, an upper price and the number of grids. The bot divides the range into equal steps and keeps one order at each level. When a buy fills, it places a sell one step higher; when that sell fills, it places a new buy one step lower.
When a grid bot loses money
If price falls below the lower bound, every buy has filled and the bot holds coins bought higher: an unrealised loss that grid profits rarely cover. If price rises above the upper bound, the bot has sold everything and stops earning. Fees on every fill eat into small steps.
Try your own numbers in the grid profit calculator.
Grid vs DCA
| Aspect | Grid | DCA |
|---|---|---|
| Best market | Sideways, inside a range | Long-term, any direction |
| How it earns | Many small buy–sell cycles | Lower average entry price |
| Main risk | Price leaves the range | Long decline with no recovery |
| Fee sensitivity | High: trades often | Low: trades rarely |
Where to run a grid bot
These platforms offer grid bots.Full list and scores: best grid trading bots.