1. Neutral Grid
Take the BTCUSDT perpetual futures contract as an example. Set the parameters as follows:
Higher price: 60,000 USDT
Lower price: 40,000 USDT
Grid count: 5/Arithmetic
Amount per order: 0.001 BTC
Futures contract price when the strategy is set up: 50,000 USDT
1.1 Set up a grid trading strategy
The grid trade defined by the parameters above consists of orders at the following prices (USDT): 60,000, 56,000, 52,000, 48,000, 44,000, and 40,000. Inside a neutral grid, sell orders will be placed at prices higher than the latest market price, while for prices lower than the market price, buy orders will be created, as shown below:
|
Price |
Direction |
|
60,000 |
Sell |
|
56,000 |
Sell |
|
52,000 |
Sell |
|
48,000 |
Buy |
|
44,000 |
Buy |
|
40,000 |
Buy |
1.2 Price drops to 49,000
When the price of the futures contract drops to 49,000 USDT, no order will be executed, and the orders in the grid will remain unchanged.
|
Price |
Direction |
|
60,000 |
Sell |
|
56,000 |
Sell |
|
52,000 |
Sell |
|
48,000 |
Buy |
|
44,000 |
Buy |
|
40,000 |
Buy |
1.3 Price drops to 48,000
When the price drops to 48,000 USDT, the buy order at 48,000 USDT will be fully executed. No new order needs to be placed, as this is the first filled order in this grid trade. Now the user holds a long position of 0.001 BTC, and the open orders are as follows:
|
Price |
Direction |
|
60,000 |
Sell |
|
56,000 |
Sell |
|
52,000 |
Sell |
|
48,000 |
NA |
|
44,000 |
Buy |
|
40,000 |
Buy |
1.4 Price drops to 44,000
When the price drops to 44,000 USDT, the buy order at 44,000 USDT will be fully executed. A new order needs to be placed at 48,000 USDT to make up for the previously executed order, and it needs to be a sell order as the market price is now lower than 48,000 USDT.
Now the user holds a long position of 0.002 BTC, and the open orders are as follows:
|
Price |
Direction |
|
60,000 |
Sell |
|
56,000 |
Sell |
|
52,000 |
Sell |
|
48,000 |
Sell |
|
44,000 |
NA |
|
40,000 |
Buy |
1.5 Price rises to 49,000
When the price rises back to 49,000 USDT, the sell order at 48,000 USDT will be fully executed. A new order needs to be placed at 44,000 USDT to make up for the previously executed order, and it needs to be a buy order as the market price is now higher than 44,000 USDT.
Now the user holds a long position of 0.001 BTC, and the open orders are as follows:
|
Price |
Direction |
|
60,000 |
Sell |
|
56,000 |
Sell |
|
52,000 |
Sell |
|
48,000 |
NA |
|
44,000 |
Buy |
|
40,000 |
Buy |
The same applies to other price movements.
2. Long Grid
Take the BTCUSDT perpetual futures contract as an example. Set the parameters as follows:
Higher price: 60,000 USDT
Lower price: 40,000 USDT
Grid count: 5/Arithmetic
Amount per order: 0.001 BTC
Futures contract price when the strategy is set up: 50,000 USDT
2.1 Set up a grid trading strategy
The grid trade defined by the parameters above consists of orders at the following prices (USDT): 60,000, 56,000, 52,000, 48,000, 44,000, and 40,000. Inside a long grid, only buy orders will be placed at the beginning, as shown below:
|
Price |
Direction |
|
60,000 |
Buy |
|
56,000 |
Buy |
|
52,000 |
Buy |
|
48,000 |
Buy |
|
44,000 |
Buy |
|
40,000 |
Buy |
As the market price 50,000 USDT is in the middle of the grid, all open buy orders with prices above 50,000 USDT will be executed at the market price to open a position for the user; then, the executed orders except for the one at 52,000 USDT will be replaced by sell orders at the same prices.
Now the user holds a long position of 0.003 BTC, and the open orders are as follows:
|
Price |
Direction |
|
60,000 |
Sell |
|
56,000 |
Sell |
|
52,000 |
NA |
|
48,000 |
Buy |
|
44,000 |
Buy |
|
40,000 |
Buy |
2.2 Price drops to 47,000
When the price drops to 47,000 USDT, the buy order at 48,000 USDT will be executed. A new order needs to be placed at 52,000 USDT to make up for the previously executed order, and it needs to be a sell order as the market price is now lower than 52,000 USDT.
Now the user holds a long position of 0.004 BTC, and the open orders are as follows:
|
Price |
Direction |
|
60,000 |
Sell |
|
56,000 |
Sell |
|
52,000 |
Sell |
|
48,000 |
NA |
|
44,000 |
Buy |
|
40,000 |
Buy |
2.3 Price rises to 53,000
When the price rises back to 53,000 USDT, the sell order at 52,000 USDT will be executed. A new order needs to be placed at 48,000 USDT to make up for the previously executed order, and it needs to be a buy order as the market price is now higher than 48,000 USDT.
Now the user holds a long position of 0.003 BTC, and the open orders are as follows:
|
Price |
Direction |
|
60,000 |
Sell |
|
56,000 |
Sell |
|
52,000 |
NA |
|
48,000 |
Buy |
|
44,000 |
Buy |
|
40,000 |
Buy |
The same applies to other price movements.
3. Short Grid
Take the BTCUSDT perpetual futures contract as an example. Set the parameters as follows:
Higher price: 60,000 USDT
Lower price: 40,000 USDT
Grid count: 5/Arithmetic
Amount per order: 0.001 BTC
Futures contract price when the strategy is set up: 50,000 USDT
3.1 Set up a grid trading strategy
The grid trade defined by the parameters above consists of orders at the following prices (USDT): 60,000, 56,000, 52,000, 48,000, 44,000, and 40,000. Inside a short grid, only sell orders will be placed at the beginning, as shown below:
|
Price |
Direction |
|
60,000 |
Sell |
|
56,000 |
Sell |
|
52,000 |
Sell |
|
48,000 |
Sell |
|
44,000 |
Sell |
|
40,000 |
Sell |
As the market price 50,000 USDT is in the middle of the grid, all open sell orders with prices below 50,000 USDT will be executed at the market price to open a position for the user; then, the executed orders except for the one at 48,000 USDT will be replaced by buy orders at the same prices.
Now the user holds a short position of 0.003 BTC, and the open orders are as follows:
|
Price |
Direction |
|
60,000 |
Sell |
|
56,000 |
Sell |
|
52,000 |
Sell |
|
48,000 |
NA |
|
44,000 |
Buy |
|
40,000 |
Buy |
3.2 Price rises to 53,000
When the price rises to 53,000 USDT, the sell order at 52,000 USDT will be executed. A new order needs to be placed at 48,000 USDT to make up for the previously executed order, and it needs to be a buy order as the market price is now higher than 48,000 USDT.
Now the user holds a short position of 0.004 BTC, and the open orders are as follows:
|
Price |
Direction |
|
60,000 |
Sell |
|
56,000 |
Sell |
|
52,000 |
NA |
|
48,000 |
Buy |
|
44,000 |
Buy |
|
40,000 |
Buy |
3.3 Price drops to 47,000
When the price drops back to 47,000 USDT, the buy order at 48,000 USDT will be executed. A new order needs to be placed at 52,000 USDT to make up for the previously executed order, and it needs to be a sell order as the market price is now lower than 52,000 USDT.
Now the user holds a short position of 0.003 BTC, and the open orders are as follows:
|
Price |
Direction |
|
60,000 |
Sell |
|
56,000 |
Sell |
|
52,000 |
Sell |
|
48,000 |
NA |
|
44,000 |
Buy |
|
40,000 |
Buy |
The same applies to other price movements.