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1. What is Grid Trading?
Grid trading is a strategic method which allows users to make profits with price fluctuations, without timing the market and betting on ups and downs, to achieve "buy low and sell high", obtain stable returns within the specific range. Traders can set up the price range to separate your fund into several parts to automatically execute a low buy order corresponding to the high sell order.
2. The Profit of Grid Trading Based on Market Price.
It's an incorrect assumption of some traders to think that there is no risk in grid trading compared to U-Futures trading. The profit of grid trading is based on the market price. When the price is fluctuating, it’s matched more frequently and your realized profit will increase. However, if the price is not fluctuating, it’s matched less and your realized profit will be less.
Besides, setting up a reasonable price range and grid numbers are the key elements to maximize more profit. However, if it triggers the stop loss price, there might be negative revenue.
3. How to Earn a Stable Profit on Grid Trading?
(1) Sufficient Fund: This means that you have enough funds to buy and sell every time during the volatile market price.
(2) Choose a trading pair with a deep order book: ensure your order will be completely filled each time.
(3) Setup a reasonable price range and grids to match the upper and lower boundary with the volatile price range. Suggested that the ideal grid number is from 2 to 99. Too many grids will cause the profit to be insufficient to cover the transaction fee, and too few grids will cause the grid spread to be too wide and difficult to match.
FAMEEX kindly reminds you that digital assets are a new investment with a volatile price market. Please make your investments very cautiously for your digital assets. Users should self-assess any possible losses within an affordable range before your investment decision.