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How to Earn a Stable Profit in Grid Trading

How to Earn a Stable Profit in Grid Trading

2023/09/14 17:58:30

1. What is Grid Trading?

Grid trading is a strategic method that allows users to make profits with price fluctuations, without timing the market or betting on ups and downs, to achieve "buy low and sell high" and obtain stable returns within a specific range. Traders can set up the price range to separate their fund into several parts and the transformation from a low buy order to a high sell order will be automatically executed.

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 fluctuates, with more frequent matches, the realized profit will increase. However, if the price does not fluctuate, the less realized profit can be caused by the less frequent match.

Besides, setting up a reasonable price range and grid numbers are the key elements to maximize profit. However, if it triggers the stop loss price, the revenue might be negative.

3. How to Earn a Stable Profit on Grid Trading? 

  1. (1) Secure sufficient funds: This means that you have enough funds to buy and sell during the times when the market price volatiles.
  2. (2) Choose a trading pair with a deep order book: Ensure your order will be filled each time.
  3. (3) Set up a reasonable price range and grids to match the upper and lower boundary with the volatile price range. An ideal grid number ranges from 2 to 99. The profit will not sufficiently cover the transaction fee if there are too many grids while the grid spread will be too wide and difficult to match if the number of grids is too few.

FameEX kindly reminds you that digital assets are new forms of investment and are influenced by the volatile price market. Please make your investments with caution. Users should self-assess any possible losses within an affordable range before making their investment decision.

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