Spot Grid Trading Tutorial
Dear Global Bitgetters,
What is Spot Grid Trading?
Spot Grid Trading is a type of quantitative trading strategy, where a trading bot automates buying and selling on spot trading for you. It is designed to place orders in the market at preset intervals within a configured price range.
In the volatile digital asset market, the Spot Grid Trading bots can help you avoid arbitrary trading decisions based on human impulsiveness or emotion. The Spot Grid Trading robots will implement your pre-set buy low and sell high trading strategy.
In practice, Spot Grid Trading robots will execute a series of buy/sell orders pre-set on a preset interval within an oscillating price range to buy low and sell high.
How to Start Spot Grid Trading
1. Click [Strategy Trading] - [Spot Grid] on the navigation bar and access the page below
2. Select your preferred trading pair.
3. Create grid strategy
3.1. Create AI Strategy (The easiest way to open an order)
Based on the backtest data of the trading pair for the past seven days, 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 in this Spot Grid Trading bot.
3.2 Manual creation
- Basic settings
- Lower price: Bottom of the Spot Grid Trading price range. The system will no longer execute orders when the marke t price is lower than the Lower Price.
- Upper price: Top of the Spot Grid Trading price range. The system will no longer execute orders when the market price is higher than the Upper Price.
- Number of grids: The price range is divided into corresponding shares.
- Coin to invest: You can choose to invest in single or dual crypto.
- Available amount: The available balance in your spot account.
- Advanced settings
- Trigger Price: The grid orders will be triggered when the Last Price reaches the trigger price you inserted.
- Take-profit price: When the latest market price reaches the Take Profit price, the grid will stop working.
- Stop-loss price: When the latest market price reaches the Stop Loss price, the grid will stop working.
- Opening price limit: The parameter is used to restrict the difference between the average trading price of the initial order and the order placement price within a certain range. (due to the volatility of the crypto market, the executed price may be different from your expected price when the order was placed. You are advised to control slippage by setting an opening price limit)
Assets used for Spot Grid Trading
Spot Grid Trading uses the assets in your Spot account. Purchased cryptos and placed orders via spot Spot Grid Trading will be shown in [Open Orders] and [Orders History] of spot trading. Please keep in mind that your initial capital allocated to the Spot Grid Trading strategy might not be enough due to market fluctuation.
How to check your Spot Grid orders?
1. For running orders:
After creating the grid, click the [Running] tab to check ongoing and pending grid orders.
Termination: By clicking [End], you can terminate grid operation. All profits will be settled immediately at market price.
2. For past orders:
Click the [History] tab to check your Spot Grid Trading history.
Example:
Let’s use the BTC/USDT pair as an example. Suppose your strategy parameters are set as below:
Upper price: 60,000 USDT
Lower price: 40,000 USDT
Number of grids: 5 (Arithmetic)
Invested amount: 10,000 USDT
Current price of BTC/USDT: 50,000 USDT
According to the above parameter, the price structure of this strategy will be placed at (USDT): 60000, 56000, 52000, 48000, 44000, 40000
Spot Grid Trading uses normal grids. Orders are placed from the top grid to the bottom grid. When a buy order is filled, a sell order will be placed on the grid above it.
As the upper price is set at 60,000 USDT, the grid strategy will begin by placing a buy order at 56,000 USDT. This buy order price is higher than the current price (50,000 USDT), so in theory, it will be immediately filled. After the 56,000 order is filled, a new sell order will be placed at 60,000 USDT.
When the buy order at 52,000 USDT is filled, a sell order of 56,000 USDT will be placed accordingly and reaches the 48,000 USDT grid. As the current price is 50,000 USDT, the buy order at 48,000 cannot be filled, therefore no orders will be placed at 52,000 USDT. Similarly, the buy orders at 44,000 and 40,000 USDT will not be filled.
This is how Spot Grid Trading calculates the actual amount of base currency needed for placing orders and paying transaction fees. It will then automatically place market orders to buy the base currency needed for the grid. When the grid strategy is successfully activated, the order placement will be as follows:
Risk Alert
Spot Grid Trading is a trading tool that should not be regarded as financial or investment advice from Bitget. The Spot Grid Trading profit is susceptible to a one-sided market and misplaced price intervals. You may adjust your Spot Grid Trading strategy based on market conditions.
Spot 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 Spot Grid Trading guideline.
FAQ:
1. What does the initial buying of normal grids include?
It mainly includes the amount of base currency needed for placing buy orders and trading fees reserved for running the strategy.
2. Why do I need to deposit trading fees in advance?
When prices go down while the strategy is running, the system will keep buying base currency as trading fees are reserved.
3. Why is my strategy terminated?
- Users can click [Terminate] to terminate the ongoing orders manually.
- You have manually canceled the grid trading orders on the spot trading page, causing the grid trading strategy to be terminated.
- The market price has hit the stop-trigger price you set.
- The trading pair of your strategy is delisted or will be delisted soon.
- The number of orders you have in the strategy has reached the maximum number you can place for that trading pair.
- There is insufficient balance in your Spot Wallet and orders cannot be placed.
4. What assets are available for spot grid trading?
The available assets in your Spot Wallet.
5. With what modes are orders placed for spot grid trading?
Orders are placed for spot grid trading with two modes:
- In arithmetic mode, each grid has an equal price difference;
- In geometric mode, each grid has an equal price difference ratio. That means the [ratio of the highest price to the lowest price (highest price/lowest price)] is always the same.
6. What is the current market price for investment?
Due to volatile changes in the crypto market, to avoid huge slippage during initial buying, a current market price can be set for investment so that the slippage during initial buying can be controlled within a certain range.
7. How is profit calculated?
Grid profit
Profit from a grid = price interval of the grid x min (Qty of buying in the grid, Qty of selling in the grid)
Total grid profit = sum of profit from all grids
Floating profit/loss
Floating profit/loss = (current price - average buying price) x current positions
Total profit
Total profit = grid profit + floating profit/loss
8. How to calculate the times of arbitrage?
For any grid, a time of arbitrage is the completion of purchasing currency at the lowest price and selling it at the highest price; for any normal grid, the times of arbitrage are the times of selling under the grid trading strategy, which can be checked in “History orders.”
9. What is trigger price?
The grid orders will be triggered when the last price rises above or falls below the trigger price you entered.
10. What is stop trigger?
Take Profit: should be higher than the highest price, last price and trigger price; when the latest market price reaches the take profit price, the grid will stop working.
Stop Loss: should be less than the lowest price, last price and trigger price; when the latest market price reaches the stop loss price, the grid will stop working.
Bitget Team
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