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Guide to Spot Grid Trading
Gate.io
Updated at:484 days 14 hours ago

1.What is spot grid trading?

Spot grid trading is a trading strategy of selling high and buying low and is suitable for volatile markets. By setting the price range, the number of grids, etc., funds are divided into multiple grids which will be used to buy in when the price of the base currency falls and to sell out when the price rises, grid by grid. The strategy profits from repeated selling hight and buying low.

2. In which market conditions are spot grid strategies fit?

Spot grid strategies are fit for volatile markets where they can repeatedly sell high and buy low to make profits from the grids.

3. Which trading pairs are spot grid strategies fit for?

If you are new to cryptocurrency trading, we recommend mainstream trading pairs with high liquidity such as BTC_USDT and ETH_USDT. If you already have a good understanding of spot grid trading, you can try trading pairs with large fluctuations to earn more profits.

4. Can I stop loss in spot grid trading?

Yes. Set the stop-loss price in the grid configurations to protect your assets. When the traded asset's price falls below the stop-loss price, the strategy will automatically sell the underlying asset for you.

5. Is it possible that the total handling fee exceeds the grid profit?

No. Spot grid strategies make sure that only when the grid profit is more than the handling fee will orders be placed. Therefore, the described situation will never occur.

6. "Smart Grid" or "Configure Grid Manually"?

If you are a newbie, it is recommended that you choose "Smart Grid". The AI Smart Grid is backtested based on the historical data of the past 7 days and works out the grid parameters with the highest yield: upper limit price, lower limit price, and the number of grids. Traders only need to decide the total investment. (The total investment must be greater than or equal to the minimum investment amount.)

If you are experienced in spot grid trading, you can choose "Configure Grid Manually" to configure the parameters according to your needs.

7. Where to start spot grid trading?

Click on "Copy Trading" on the navigation bar and go to "Create A New Strategy"-"Strategies Templates"-(Spot Grid Trading)"Create Strategy". Then choose the trading pair and select "Smart Grid" or "Configure Grid Manually"

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8. Parameters in grid configuration

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Fill AI Data: Automatically getting AI calculated parameters and filling in.

Lower limit price:

The lowest buying price, which if the latest market price is lower than, no purchase orders will be placed. The lower limit price can not be executed as the selling price in the strategy.

Upper limit price:

The highest selling price, which if the latest market price is higher than, no selling orders will be placed. The upper limit price cannot be executed as the purchase price in the strategy.

Number of grids: The number of executed grids, varying from 2 to 200.

Common difference :

Suppose the value of the common difference is q, the upper limit price is a1, the lower limit price is a2,and the number of grids is n.

Arithmetic:

img

Geometric:

img

(Note: When calculating the prices, the common difference is 1+q.)

Rate of return per grid :

Suppose the value of the common difference is q, the upper limit price is a1, the lower limit price is a2,and the number of grids is n.

Arithmetic:

img

Geometric:

img

Base currency buy/sell qty per grid: The amount of the base currency in each grid.

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".

img

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...

Stop-loss price:

When the market price is less than or equal to this price, stop-loss will be triggered. The stop-loss price must be lower than the lower limit price.

Take-profit price:

When the market price is greater than or equal to this price, take-profit will be triggered. The take-profit price must be higher than the upper limit price.

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.

Settlement options (optional)

Sell (base currency) when it terminates: When enabled, your holdings will be used to buy USDT at market price when the strategy terminates.

HODL mode: When enabled, your earnings will be exchanged for the base currency in real-time.

Note:"Sell (base currency) When It Terminates" and "HODL Mode" can be enabled at the same time.


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