In today’s rapidly evolving digital finance landscape, AI trading bots have become a hot topic. Many influencers claim that you can make anywhere from $100 to $1,000 a day using these automated tools. But how true are these claims? How easy is it to actually make money using these bots? In this blog post, we will test this theory using two crypto trading bots with an initial investment of $3,000. This experiment is the first episode of a new series where we test various crypto products using real money in real time.
Understanding Grid Bots
Before diving into the experiment, it’s crucial to understand what grid bots are and how they function. Futures grid trading is an automated strategy that trades futures contracts within preset intervals in a specific price range. This strategy continuously buys low and sells high for each predefined grid, profiting from market volatility. Essentially, as long as the market is volatile, there’s potential for profit. The essence of a futures grid is volatility arbitrage, making it ideal for sideways or volatile markets.
Types of Futures Grids
There are different types of futures grids: long futures grids (only long positions), short futures grids (only short positions), and neutral futures grids (both long and short positions). This experiment will focus on the OKX grid bot, and everything will be done on camera so you can see the entire process from start to finish.
Setting Up the Experiment
To begin, we will set up a Bitcoin grid bot and a Solana grid bot. The Bitcoin bot will use a futures grid strategy with manual settings. The price range will be set between $25,200 and $27,100, using 12 grids and 10x leverage. This setup aims to profit from Bitcoin’s sideways movement within this range.
The Solana bot will use an AI strategy, leveraging OKX’s backtested strategies. We will invest $1,000 with 7x leverage and monitor its performance over the next few days.
Day 1: Initial Setup and Observations
After setting up the bots, we will monitor their performance. The Bitcoin bot is designed to take advantage of sideways market movement, while the Solana bot uses AI strategies to optimize trades. On the first day, the Bitcoin bot is slightly up, while the Solana bot is down by 2% due to market fluctuations.
Day 2: Adjustments and Learnings
On the second day, we observe that the Bitcoin bot is slightly down due to market volatility, while the Solana bot has moved into positive territory. The key learning here is that grid bots perform best in sideways, volatile markets. When the market moves in a single direction rapidly, the bots may struggle to match buy and sell orders.
Day 3: Market Volatility and Performance
As market volatility increases, we see the Solana bot performing exceptionally well, moving into a $100 profit. The Bitcoin bot, however, remains slightly down, reinforcing the need for careful monitoring and adjustments based on market conditions.
Day 4: Final Results and Conclusions
After four days of active monitoring and adjustments, the experiment yields a total profit of $104, equating to $26 per day when including the bots set up prior to the experiment. Excluding those, the profit is $63, or $16 per day. This experiment highlights that while grid bots can be profitable, they require careful management and are most effective in specific market conditions.
Key Learnings
The primary takeaway is that grid bots are most effective in sideways, volatile markets. During these conditions, they can capitalize on market fluctuations to generate profit. However, in rapidly trending markets, adjustments and different strategies may be necessary.
Looking Forward
This experiment is just the beginning of a series exploring various crypto trading strategies. Future episodes will delve into short-term strategies and other automated trading tools. If you have suggestions for crypto products to try next, let us know in the comments below.
If you’re interested in trading on OKX, there’s a link in the description where you can access a mystery box valued at up to $10,000. Stay tuned for the next episode, and happy trading!
