Grid Trading 101: A Step by Step Guide
Grid Trading is a strategic tool that automates the buying and selling of crypto at preset intervals around a prese t price range to construct trading grids. Grid trading tends to work best in volatile markets when price fluctuates at specific intervals. In this way, grid trading attempts to make profits on small price changes.
Grid trading can help trade rationally as in practice, grid trading bots will execute a series of buy/sell orders on a preset interval within an oscillating price range to buy low and sell high. As this happens automatically and based on preset parameters, it allows a trader to take out the emotional part of trading and therefore avoid unnecessary losses by decision-making attempts led by FOMO (Fear of Missing Out), FUD (Fear, Uncertainty, Doubt), Greed, and Hope.
How does Grid trading work?
Navigate over the Strategic Trading section and select what instrument you wish to set up your grid trading strategy. Then, select your preferred trading pair.
Create your grid trading strategy in the trading portal on the right.
Based on the backtest data of the trading pair, the AI strategy would recommend the most suitable parameters for the current market. By utilizing this strategy, your only concern would be the amount of capital you would like to deploy.
This setting allows you to have full control on the way you would like to set up your bot. This requires more knowledge about the market and a solid understanding of its parameters. In order to not get overwhelmed Bitget has subdivided the parameters in Basic settings and Advanced settings.
- Lowest Price: The lowest price on which the grid will execute orders. When the market price falls below, orders will no longer be executed and the strategy will be suspended until price returns back in the grid.
- Highest Price: The highest price on which the grid will execute orders. When the market price falls below, orders will no longer be executed and the strategy will be suspended until price returns back in the grid.
- Number of grids: The amount of levels on which price will execute orders
- Coins: You can choose which asset of your holding you want to use for the strategy
- Amount: The available balance in your account, and how balance you wish to use for the strategy.
Clicking on advanced settings, will expand the menu with a few additional options.
- Trigger price: The grid strategy including its orders will be triggered when the last traded price reaches the trigger price you inserted.
- Take profit price: When the last traded market price reaches the Take Profit price, the grid will stop working, and closes any remaining open positions.
- Stop loss price: When the last traded market price reaches the stop loss price, the grid will stop working, and closes any remaining open positions.
- Grid order mode: Arithmetic order mode creates grid orders based on price levels, meaning that each grid has an equal price difference, whereas geometric order mode is based on ratios calculated in percentages. Depending on the market conditions either one of these modes can give an extra edge.
- Initial price limit: This parameter is used to avoid major slippage when the market is trading in an illiquid region. Due to the volatility in the crypto market, the executed price may be different from your expected price when the order was placed.
Checking your Grid performance
After creating the grid, you can keep track of your strategy by looking at your Order information as well as have an insight in your previously executed grid strategies.
Note: Terminate, means to terminate the grid strategy, but not necessarily close your current open positions. In order to do this, make sure to select “the whether to sell on termination” box to do so. This is recommended, as otherwise, you must manually close your spot positions through the spot portal.
Simply create an account, and start exploring the incredible Bitget-Verse today!
Disclaimer: Grid Trading is a trading tool that should not be regarded as financial or investment advice from Bitget. The Grid Trading profit is susceptible to a one-sided market and misplaced price intervals. You may adjust your Grid Trading strategy based on market conditions.
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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