What is Bybit Trading Bot?
Cryptocurrency trading bots are these automated computer programs where, through them, users can be aided whenever they plan on buying low and selling high, i.e., they help them effectively place at predetermined intervals these sell and buy orders in a pre-established price range automatically so that any advantage from price fluctuations can be capitalized on, which is especially worthwhile considering the sheer volatility of the cryptocurrency market, where prices can change significantly within a span of just 24 hours.
What is Bybit?
In case you are a newcomer and were wondering what Bybit exactly is, it is an exchange that was established in early 2018.
Its primary goal is to provide a professional platform for cryptocurrency traders where they can benefit from a swift matching engine, good customer support, and extensive multilingual community support, among other things. To that end, the firm offers derivatives and spot trading services, products for staking and mining, and API support as well, to institutional and retail customers throughout the globe.
The Need for Trading Bots
The need for trading bots within the cryptocurrency landscape is also representative of the need for automation. Every trader out there will not always have the time to manually conduct their trades online, and trading bots can be a good opportunity to automate one’s trading experience should there ever be a need for it.
So, while the bots carry out your trading for you based on the parameters that you have set, you can focus on other tasks that are more important to you and not worry about missing out on any good opportunities from price fluctuations.
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How does Bybit Trading Bot work?
With Bybit’s grid bots, users can set various Sell and Buy orders within a range of prices, generating an entire trading grid filled with orders that are just waiting to trigger. Once the price reaches the target you have preset, buy orders will be carried out, and then sell orders will be placed on the following grid (or price) above.
So, should the price increase again towards that following grid, sell orders will then be carried out, enabling one to gain some profits due to the price differences.
Key Features of Bybit Trading Bot
To expand more on what we highlighted earlier, we will be mentioning each of the parameters that you will have to set and what they mean. So, these would include the spot pair, market price, upper price, lower price, number of grids, intervals, and total investment.
The spot pair and market price should be pretty self-explanatory; you can choose the trading pair that has the token you want to buy or sell, after which the market price of that token will be displayed.
The upper and lower prices represent the price range in which your orders will be executed. So, the upper price is the highest price within that range or simply the highest price for a sell order to be executed. The lower price would be the exact opposite and represent that price range’s lowest price or the lowest price at which a buy order can be placed. So, any prices that go outside of this range will result in no orders being placed.
As for grid levels, this is essentially where the grid aspect comes in. Because of the multiple prices at which orders can be executed here, which is practically what grid trading is all about, they essentially create these grids of prices. So, the more grid levels you set, the more prices at which your orders can be executed will be produced.
This then brings in intervals, which indicate the difference between each of those prices. It is calculated by dividing the difference between the upper and lower prices by the number of grid levels you have set. So, an order cannot be set at a price that falls within that interval, creating, as the name implies, these momentary breaks between orders.
And finally, as the name implies, the total investment parameter would be the total amount you plan on investing with this particular grid bot, i.e., the bot will not invest an amount that goes beyond what you have set.
Advantages of Using Bybit Trading Bot
Besides automation, which we discussed earlier, there is also the fact that Bybit’s trading bots, or any other exchange’s trading bots, for that matter, can remove a lot of the stress that comes from trading, stress that could more often lead to some rather impulsive trading decisions.
So, with human emotion out of the equation, there is an increased likelihood of more profitable returns due to the lack of impulsivity. Other than this, there is the fact that trades can be carried out instantly once the criteria have been met. This speed can mean everything in markets as volatile or fast-paced as cryptocurrency’s, where prices may alter within seconds.
Let’s learn through step-by-step guides about various trading bots on Bybit’s YouTube Channel.
DCA Bot, Spot Grid Bot, and Futures Grid Bot
Getting Started with Bybit Trading Bot
Here, we will be looking at how you can set up your own trading bot on this exchange and a few of the trading strategies that you may implement.
Setting Up Bybit Trading Bot
So, start by logging into your Bybit account. On the homepage, hover your cursor over Trade, and from the drop-down menu, select the Trading Bot option. On the Bybit Grid Bots page, you will be presented with three options. These will include the Spot Grid Bot, DCA Bot, and Futures Grid Bot. Here, however, we will be using the spot grid bot as an example, so click on Create Now.
On the Create My Bot page, you will have to enter the parameters that we discussed earlier, or if you want, you can auto-fill to add intelligent AI suggestions that will take some historical data into account. Click on Create after you have double-checked everything, and that’s it. You have now created a spot grid trading bot at Bybit. Also, this bot will keep placing buy and sell orders based on the amount you want to invest, so you can disable it if you want on the My Grid Bots page.
Strategies for Using Bybit Trading Bot
With the Bybit spot grid bot, whatever strategy you employ, you should take note of the fact that the greater the grid number, the smaller your price intervals will be. This may imply that orders will fill more often in periods of extreme volatility, which would result in lower profits because of the several trading fees that will be involved. So, you might want to lower the grid levels here if you feel like making more profit.
However, with its futures grid bot, it has three strategies or modes already ingrained into it that you can use, which are Neutral, Long, and Short.
Risks and Limitations of Trading Bots
There can be a few limitations with trading bots that you need to watch out for. For one, they might need monitoring from time to time to ensure that they are properly functioning, as connectivity issues, software bugs, and misconfigured settings can negatively affect their functionality.
Also, profits are not guaranteed, as these bots can only be as effective as the strategy they are following, which may not be ideal in certain market conditions. And finally, there may be issues pertaining to their legality in certain jurisdictions, so be on the lookout for that.
Conclusion
Trading bots can be an effective means to automate the trading process, and the bots at Bybit are no different, albeit with a few limitations or risks to take note of. So, if you are finding it hard to devote more of your time to trading, you can use Bybit’s grid bots to help with that.
If you wish to learn more about Bybit, refer to the following link!
How to deposit, how to use, Bybit fees, and Bybit copy trading
FAQs
What is a Bybit Trading Bot?
A Bybit trading bot automates the grid trading process by automatically placing orders within the price range you have set, along with some other parameters which we covered earlier.
Who can use the Bybit Trading Bot?
These bots aren’t exactly beginner-friendly and take time and some technical know-how of the cryptocurrency market to be used effectively. So, they tend to be more for professionals and a few casuals.
What are the benefits of using Bybit Trading Bot?
The benefits of using one can range anywhere from more time saved due to automation and the potential for higher returns to instantaneous executions and not having to deal with some of the stress or anxiety that can come with trading.
How to set up a Bybit Trading Bot?
On the homepage, from the Trade menu, click on Trading Bot, which will direct you to the Bybit Grid Bots page. Over there, you can choose either the Spot Grid and DCA Bots or the Futures Grid Bot. After selecting what you want, simply enter or adjust the relevant parameters and click on Create to generate your Bybit Grid trading bot.
Is using a trading bot safe?
They may require monitoring from time to time, but other than that, they are only as safe as the strategy or parameters you choose. If you don’t select appropriately according to market conditions, you may incur a few losses.
