Gate.io Short Grid

1. The Trading principles of shorting grids
Grid trading takes the strategy of "buying low and selling high", and shorting grid is the opposite, which takes the strategy of "selling high and buying low". Although the principles are the same, the two are very different.

From the perspective of purpose, the main purpose of grid trading is "arbitrage", which is suitable for use when the market is volatile or rising; while the main purpose of shorting the grid is to "hold coins", which is suitable for use when the price falls.

From the perspective of charge units, grid trading uses USDT as a charge unit, which will, for example, buy BTC with part of USDT when opening an order in case the price rises. And the remaining USDT will buy more BTC when the price falls. Therefore, the order of grid trading is to buy BTC at a low price and sell it when it rises to a high price.

Shorting grid uses BTC as a charge unit. When creating an order, it will use part of the BTC to buy USDT, and buy more BTC when the price falls; while the reserved BTC will mainly stay to sell when the price rises. So the order of shorting the grid is to first sell BTC at a high price and buy when the price falls.

1. Where shorting grid applies
<1> when you predict that the market will fall in the future, and you feel that the price will rise after this period of low tide passes.
When the price falls, the short grid will help you buy the corresponding currency, so that the more the price falls, the more coins you hold.
However, it should be noted that if the judgment is wrong and the price of the coin continues to fall without rebounding, you will gain less profit (because it sells part of the holdings). Therefore, it is necessary to carefully analyze before opening a position, or regularly check whether you should make adjustments.


< 2> Bought at a high point and wanted to start at a low price
Due to the ups and downs of cryptocurrencies, it is difficult to judge when to buy. So investors sometimes accidentally buy at a high point, which is actually very suitable for using the short grid to help clear the currency in hand, and then buy at a gain when the price falls. Because a short grid will help you clear out some of the currency in hand and help you buy when the price falls, you can achieve the purpose of buying at a low price. Besides, you retain part of the original currency, so even if the price rises after selling, you can still enjoy part of the benefits brought by the rising price.
Examples of shorting the grid
Suppose you hold 1000 BTCS and the price range is set at 5000-10000 with a grid of 1000. Let's say that the price rises for every 1 range, 100 coins are sold; the price falls for every 1 range, 100 coins are bought.
Therefore, when the price rises to 9000, 100 coins are sold, with 900 coins remaining. When the price continues to rise to 10000, another 100 coins are sold continually, with 800 coins left.
When the price falls, it will buy the coin. When the price falls to 9000, it will buy 100 coins, with 900 coins held. When the price further falls to 8000, it will continue to buy, with 1000 coins held.
Assuming the trade is terminated at this moment, the gain on holdings is 6.7%, and the gain on short grid trading is 12%.




Guidance Of How to open a position on Gate.io Contract Grid Trading
Before starting contract grid trading, please open the contract account first, please refer to the opening process： How to open a position
Process of creating a contract grid: navigation bar - click "Copy Trading" - select "Strategies Templates" - "Contract Grid" - click "Create Strategy" - select "Trade Pairs" - "Configure Parameters" - Click "Create", as shown in the following figure:


De_script_ion of the parameter settings:

Choice of going long or short: you can choose according to your subjective prediction of the market. Choose to go long if you predict the price will rise, and choose to go short and vice versa.
Price range: the lowest price is the lowest buying price for executing a grid transaction, and, it will not continue to buy if it is lower than this price; while the highest price is the highest selling price for executing a grid transaction, it will not continue to sell if it is higher than this price.

Leverage: select a leverage multiple. Increasing the leverage multiple can reduce the minimum investment amount, with the risk and return coexisting.
Number of grids: the number of grids is the number of hanging orders. The larger the number of hanging orders, the denser the grid, with more times of high sellings and low buying (varying from 2 to 50).
Equal difference grid: each grid price is the same in spacing, which is calculated as (upper limit price – lower limit price) / (number of grids – 1)


Equal ratio grid：the price spacing of each grid is equally proportional and is calculated as follows


Base currency buy/sell qty per grid: in the contract grid, The amount of the base currency in each grid = 1.
Quantity Increment: "Quantity Increment" is disabled by default. After enabling it, you can choose to increase the buying/selling amount of each grid "Per Quantity" or "Pro Rata".
Example: the basic size of a grid is 1 and the set quantity increment is 2. Then the first grid can buy/sell 1BTC, the second grid can buy/sell 1+2=3BTC, the third grid can buy/sell 1+2+2=5BTC...
Trigger price of the strategy: only when the latest market price is lower than or equal to the trigger price will the strategy be activated. When configuring the strategy, the set trigger price must be lower than the latest market price and fall in the price range of the grids.
Stop-loss price: when the difference between the average price of the position and the marked price falls below the automatic stop loss ratio, the stop loss is triggered, the market price is closed, and the strategy is terminated.