Grid trading is a strategy that works best in a ranging sideways market where there is no clear direction. Traders create a grid-like formation by setting up buy and sell orders within a predefined price range. The number of "grids" and the width of each grid determine the trade frequency and profit earned on each order, respectively. The grid bot places a new sell order whenever a buy order is triggered, and it also places extra orders to work as safety orders in case the market goes against the trader's expectations.
Dollar-cost averaging, on the other hand, is an investing strategy that allows investors to buy an asset in smaller amounts rather than buying all at once. The DCA bot places the first buy order and extra orders if the price goes in the opposite direction of the chosen strategy. It places only one take profit order for all the buy orders placed previously, and the price of taking profit is recalculated with every new buy order so that the profit for all the orders would equal the TP parameter set.
The main differences between the two trading bots are that the DCA bot places one take-profit for all orders, reduces the risk of purchasing high by investing at consistent intervals, and helps investors average token buying over a certain period.
In contrast, the grid trading bot places take-profits for every order separately, works best when a particular pair is in a range with no clear up or down trend in a longer period, and lets traders profit from market fluctuations without having to hold a lot of tokens.