What Is a Range Strategy, and How Does It Work?
Traders use different strategies to achieve their goals depending on the amount of risk they are willing to take. But before applying a strategy to your trading, it’s crucial to understand how it works and the risks involved.
Range and trend strategies are some of the most common strategies that crypto investors use to earn within a short time, and you should research both to use when trading. In this article specifically, we delve into the ins and outs of range strategy in crypto, so let’s get started.
What Is Range Strategy?
Range strategy involves traders identifying a range within which they can quickly buy and sell for profit. For example, if a coin sells at $25 and you think it will rise to $30, you create a range to buy at the lowest price and sell at the highest.
You must repeat the process of creating a specific range until you’re sure the coin will not sell within this range again.
Simply put, a range-bound market has pre-set support and resistance levels. Due to market inefficiencies, prices will often bounce off these set prices, creating opportunities for traders to make a profit.
Is It Possible to Automate Range Strategies in Crypto?
Yes, it is possible to automate range strategies at the Crypto.com exchange. The platform allows grid trading, which is an automated and rule-based strategy. Grid trading allows investors to set multiple ranges at which to buy and sell. The bots will then execute the orders when set triggers happen.
Do Range Bots Work on Crypto?
Yes, range bots can work on crypto. However, not all bots work; some can even lead to losses. Many range bots will promise to give you high returns but will not perform as per expectations.
Before settling for a specific range bot, do your due diligence so that you don’t fall prey to scammy bots. One of the best bots that can help you apply range strategies is Bitsgap, which has been operating since 2018. The bot also offers users a free demo account and a free trial so that they get to test whether it meets their needs before committing.
Is Range Strategy Profitable on Crypto?
Range strategy can be profitable, but you need to know the correct market timing. Buying and selling at the right time make all the difference in profit making. Range traders should know the best resistance and support levels and for how long the price range will remain the same.
In essence, range strategies are the most straightforward and easy to make profits. This is because you only need to buy at support and sell at resistance levels. Besides, range markets are quite predictable and stable. Then, there are guidelines to help stop loss and take profits using the range strategy.
How Much Does a Range Bot Cost?
Since cryptocurrency prices can swing drastically from one direction to another, bots can make the work easier. Range bots don’t have a standard price – some are free, while others are sold.
Pionex is one example of a range bot that has gained popularity over the years. With the platform, users have free access to trade bots they can use to apply range techniques. However, if you want access to more bots, you can use the paid version of Pionex bots. Traders are only required to pay a 0.05% transaction cost if trades go through.
Binance trading bot is another option you can explore if you’re looking for a free range bot. The platform supports more than 600 cryptos, allowing you to diversify your portfolio. Being a free bot, you only need to verify your identity, add funds, and then you can start trading. As much as Binance is a free bot, it’s best used by experienced traders because it is riskier than other bots.
Bitsgap is another range bot that offers three paid plans. The basic one goes for $24, the advanced plan sells at $57, and the pro version is worth $123. The good thing with Bitsgap is that you have a free 7-day trial to test whether you want to proceed or not.
TradeSanta is another new entrant bot that has received praise for all the good reasons. The bot has three paid plans, each offering more options for traders to explore. The lowest plan sells at $15, the next at $27, and the highest at $35.
Range strategy is the most predictable way of trading in cryptocurrency because a range-bound market is quite stable. It is, therefore, easy to place buy and sell orders based on preset range strategies. Besides, it is possible to automate your range strategies using bots that will help monitor the market and execute the trade when favorable conditions are available.