Smart Trader Tool: Bitget Futures Grid Trading
In addition to the Bitget Spot Grid Trading that was recently released last month, this June Bitget team has successfully developed another automated trading tool for our dear Futures and Margin Traders. We are proud to be one of very few crypto trading platforms to provide both Spot Grid Trading and Futures Grid Trading. Expect efficient, less stressful crypto trading with Bitget Futures Grid Trading!
In general, there are some basic elements that apply to both Futures and Spot Grid Trading. However, Futures Grid Trading requires a more competent risk management plan.
Futures Grid Trading Explained
Grid trading is a type of quantitative trading strategy designed to buy low and sell high in a range-bound market. Grid Trading traders profit from the ups and downs of the market. You set a Price Range for the bot, adjust how many grids you want and as long as the price stays within your set range, the bot will always sell/short a portion when the price goes a bit up and buy/long a portion when it goes a bit down based on your setup.
Grid Trading is basically a bot that helps traders place strategic orders and create a so-called “price grid”. A price grid must be defined by a set of parameters, including:
- The upper limit price: the highest price expected
- The lower limit price: the lowest price expected
- Number of grids: the maximum number of buy/sell orders assigned to the grid
- Grid spacing: the price difference (arithmetic mode) or the percentage difference (geometric mode) between orders,
- Initial margin: the minimum equity required to open any new position,
- Leverage: shows by how many times the initial capital can be multiplied,
- Margin mode: how margin is applied for this position, either in the Isolated Mode or in the Cross Mode, and
- Trigger/stop loss/take profit levels for the advanced settings.
This trading method has been well-established and well-tested in various markets, especially the foreign exchange markets (forex). Bitget Team has now integrated it into the platform so that our users can capitalise on the volatility of crypto assets as well. We are proud to be one of the only crypto trading platforms to provide both Spot Grid Trading and Futures Grid Trading.
How is Futures Grid Trading designed?
The original idea behind the Grid Trading Strategy is to buy low and sell high. Keep in mind that the strategy of Futures Grid Trading thrives typically when the asset is trading sideways - the bot will constantly pair buy orders and sell orders within a trader’s preferred price range.
Look at the price grid above. Suppose a trader sets a lowest price and a highest price based on his/her personal preferences. Starting at the current price level, the bot will open the first short position when the price passes the green line right above the purple line. Price continues to rise but is still lower than the set highest price; other short positions are opened consecutively afterwards. As we can see, now the price has almost reached the highest price - the bot no longer executes opening orders of short positions. When the price starts to drop, short positions are automatically closed based on the grid spacing, for example at a profit of one and a half grid length from the price of opening the particular short.
These constant buying and selling activities rely on the assumption that the asset is oscillating sideways. Otherwise the trader could end up accumulating losing positions and experience heavy losses. Beginners should stick with major trading pairs such as BTCUSDT or ETHUSDT until they are used to the space and want to adjust their risk appetite accordingly.
Who can make use of Futures Grid Trading?
Basically anyone can add this useful automated bot to their trading plan, especially with the simplified design of Bitget Futures Grid Trading.
Yet there are types of traders more suitable for this trading strategy, namely:
(a) Short sellers: While most futures traders tend to go long, short sellers expect a significant decline in asset prices. It is an extremely risky scheme, but with the help of Futures Grid Trading, the risks are strictly controlled. Going short is therefore more profitable, in particular when the market turns against long traders - short sellers can then accumulate fund fees from holders of long positions. Please remember that grid trading will perform best in sideways and volatile markets. We advise traders to adjust their strategy accordingly.
(b) Traders wanting to utilise Margin Trading and/or traders with low risk appetite: Margin trading allows for amplified results, but also comes with high risk possibilities. Futures Grid, with the adjustable upper and lower limits, can satisfy various risk appetite and considerably reduce the risk of losses, be it magnified or not.
(c) Traders who don’t want to stay in front of their monitor 24/7: “Automated” means somewhat of a liberation for many traders. The crypto market is highly volatile and never sleeps, but you don’t necessarily need to keep up with it all the time, now that Futures Grid Trading is available on Bitget.
(d) Beginners: Traders new to crypto are welcome to use Futures Grid Trading as a safer tool to get used to market movements. Bitget Futures Grid has an Automatic Mode that will set the basic parameters based on your trading history. We still recommend that beginners read our guide on futures trading to get a sense of what’s going on before placing any order:
Overall, Futures Grid Trading is profitable if markets are bumpy, meaning traders do not need to closely follow every price movement and predict the next trend. It substantially takes advantage of the market’s natural movements in quieter times.
Besides, consider the amount of work associated with this strategy. The bot will do its job automatically after receiving the input data; of course you are ALWAYS recommended to routinely monitor the results and pay attention to market news, but in general it is simply trading without pain. One thing to keep in mind is Grid Trading involves the execution of many orders, therefore traders should monitor and adjust the number of trades to manage their trading fees wisely.
Guide to Bitget Futures Grid Trading
Combined with our sophisticated crypto derivatives products, Bitget Futures Grid Trading can easily become your new favourite trading tool thanks to the convenience and efficacy it brings.
1. Start your crypto journey with Bitget
Bitget has advanced to the top 30 crypto exchanges globally within one year after launch and constantly maintained a monthly growth rate of 67%. Since January 2022, Bitget has claimed the 2nd place on the list of best exchanges globally by daily average futures trading volume. Bitget Coin-Ⓜ Futures has also reached an all-time high volume of $8.69 billion, representing a 300% growth from last year’s figure. The focus on improving customer experience helps Bitget build a huge customer base of more than 2 million users from 48 countries worldwide.
Bitget is extremely customer-oriented. All product designs are based on users’ needs, practicality and convenience. It is important for us to break down the entry barriers to crypto trading and to increase the crypto mass adoption rate.
2. How to use Bitget Futures Grid Trading
Basic vs. Advanced settings
Basic settings are required to create a grid trade. The parameters are:
- The price range: upper price and lower price
- The number of grids: the price range divided by the difference between orders
- The available amount: the current balance of your futures account
- Initial margin: the amount of equity used to start grid trading
- Leverage: traders should adjust their preferred level of leverage according to their personal risk tolerance, the initial margin and market situation. Due to cryptocurrencies’ high volatility, we recommend a reasonable leverage instead of maximum/near-maximum leverage. Also, users will see AI leverage recommendations by Bitget Futures Grid Trading if leverage is set at a too high level
- Margin mode: users can conveniently choose the Isolated Margin Mode or Cross Margin Mode to initiate the automated grid.
Advanced settings include setting the following price levels:
- Trigger price: the grid trade will be initiated when the last market price reaches the trigger price;
- Take profit: grid operation stops when the last market price reaches the take profit level;
- Stop loss: grid operation stops when the last market price reaches the stop loss level;
- Opening price limit: limiting the difference between the expected price and the actual price of an order, i.e. slippage limit
- Close all positions at grid termination: when chosen, this setting will lead to a closing of all positions associated with this strategy when grid operation is terminated.
Step 1: Choose Strategy Trading and click on Futures Grid to begin.
You can also visit the Futures Grid Trading Page directly to proceed.
Step 2: Select a trading pair and set the parameters.
Keep in mind that the bot cannot be initiated without you providing your personal trading preferences.
If you choose AI Strategy (Automatic Mode), Bitget will produce recommendations for the parameters using the analysis of your last 7-day trading data. You’re required to enter the investment amount allocated for this grid trade.
Manual creation (Manual Mode) is for more experienced traders. The basic settings are compulsory, but advanced settings are recommended for better risk management and improved grid performance.
Open Advanced settings to set your own advanced parameters.
If you want to close all grid-opened positions at the termination of the strategy, leave the box checked. Click Create. Your grid is created!
Step 3: Monitor your spot grid trades by:
- Clicking on Running to check the pending and ongoing grid trades. The Terminate button is used to closed all ongoing futures grid orders (profits/losses are realised at the current market price) and Share is for sharing your strategy;
- Clicking on History to check the previous grid trades;
- All users are advised to set a stop-loss price level to limit the potential risks;
- For essential grid formulas, please check out our Helpdesk Guide here.
Take the following parameters for the BTCUST pair:
- Upper price (in USDT): 60,000
- Lower price (in USDT): 40,000
- Number of grids: 5 (Arithmetic)
- Invested amount (in USDT): 10,000
- Current BTC price (in USDT): 50,000
The price range is 60,000 - 40,000 = 20,000. There are 5 orders (Arithmetic) in total, therefore the price difference between orders is equivalent to 20,000/5 = 4,000. The five price levels to be considered are 60,000 - 56,000 - 52,000 - 48,000 - 44,000 - 40,000 respectively.
Bitget Futures Grid Trading uses normal grids, i.e. orders are executed from the top to the bottom grids: The grid begins with a long position at 56,000 as the upper price is 60,000. Current market price is 50,000, hence this long order is filled and triggers a closing at 60,000. When price drops to 48,000, another long position will be opened with a corresponding closing order at 52,000. Similarly, an opening at 44,000 will result in a closing at 48,000 and the last long position, opened at 40,000, will be closed when price recovers to 44,000.
Users are advised to follow market trends and news to adjust the grids accordingly. Trading crypto assets entails high risks and requires a comprehensive approach to risk management.
Please note that Bitget Spot Grid Trading is by no means implying Bitget’s financial advice. Grid trading is used at your discretion and at your own risk. Bitget will not be liable for any loss that might arise from your use of this feature. Users are advised to make rational decisions by thoroughly assessing their own risk tolerance after reading through the grid trading guideline.
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