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>>>Start grid trading on BingX

 

1. What is grid trading

Grid trading is a type of quantitative trading strategy that automates buying and selling. It is designed to place orders in the market at preset intervals within a configured price range. To be more specific, grid trading is when orders are placed above and below a set price according to arithmetic or geometric mode, creating a grid of orders at incrementally increasing or decreasing prices. In this way, it constructs a trading grid that buys low and sells high to earn profits.

2. Types of grid trading

Spot Grid: Automatically buy low and sell high, seize every arbitrage window in a volatile market

Futures Grid: An advanced grid that allows users to tap leverage to amplify margins and profits

3. Get started with Spot Grid

Step 1: APP: Homepage->Grid Trading->Spot Grid; WEB: Homepage->Grid Trading->Spot Grid.

Step 2: Select "Spot Grid" and click "+Create".

Step 3: Select a desired trading pair, such as BTC/USDT.

Step 4: Set up grid parameters. You can choose "Auto" or "Manual" to create a grid.

  • Auto: The estimated best parameters that the system derives based on historical data and can be used directly.
  • Manual: Users need to determine the price range and grid number based on their own judgment of the market volatility.

Step 5: Set up the total investment

Step 6: Create a grid ✅

4. Get started with Futures Grid

Step 1: APP: Homepage->Grid Trading->Futures Grid; WEB: Homepage->Grid Trading->Futures Grid.

Step 2: Click "Futures Grid" and then "+Create".

Step 3: Select a desired trading pair, such as BTC/USDT. 

Step 4: Set up grid parameters. You can choose "Auto" or "Manual" to create a grid.

  • Auto: The estimated best parameters that the system derives based on historical data and can be used directly.
  • Manual: Users need to determine the price range and grid number based on their own judgment of the market volatility.

Step 5: Set up leverage and investment amount, and set the SL ratio according to your trading preference. Once the preset SL ratio is triggered, the grid strategy and positions will be closed automatically.

Step 6: Create a grid ✅

5. Terms

  • Backtested 7D Annual Yield: The auto-filled parameters are based on the 7-day backtest data of a certain trading pair and should not be regarded as a guarantee of future return.
  • Price H: The upper price limit of the grid. No orders will be placed if prices rise above the upper limit. (Price H should be higher than Price L).
  • Price L: The lower price limit of the grid. No orders will be placed if prices fall under the lower limit. (The Price L should be lower than Price H).
  • Grid Number: The number of price intervals that the price range is divided into.
  • Total Investment: The amount users invest in the grid strategy.
  • Profit per Grid (%): The profits (with trading fees deducted) made in each grid will be calculated on the basis of the parameters that users set.
  • Arbitrage Profit: The difference between one sell order and one buy order.
  • Unrealized PnL: The profit or loss generated in pending orders and open positions.

6. Advantages and risks of grid trading

6.1 Advantages

  • 24/7 automatically buys low and sells high, without the need to monitor the market
  • Uses trading bot that frees up your time while observing the trading discipline
  • Requires no quantitative trading experience, friendly to beginners
  • Enables position management and reduces market risks
Futures Grid has two more edges over the Spot Grid:
  • More flexible fund utilization
  • Higher leverage, amplified profits

6.2 Risks

  • If the price falls below the lower limit in the range, the system will not continue to place the order until the price returns above the lower limit in the range.
  • If the price exceeds the upper limit in the range, the system will not continue to place the order until the price returns below the upper limit in the range.
  • The fund utilization is not efficient. The grid strategy places an order based on the price range and grid number set by the user, if the preset grid number is extremely low and the price fluctuates between a price interval, the bot will not create any order.
  • Grid strategies will stop running automatically in case of delisting, trading suspension, and other incidents.

See also Beginner's Guide to Futures Grid

 

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