What is Grid Trading?
Grid trading is a simple type of quantitative trading strategy. This kind of mechanical trading profits from automatically placing buy and sell orders at set intervals around a set price.
Grid Trading function of CITEX exchange is a quantitative trading product. It only takes one click to activate. Since the product has in-built parameters, users do not need to fill in any more parameters. With only one click, users can start automated trading, placing buy or sell orders at preset prices or triggering stop-loss or take-profit orders. The whole process will be automatically carried out by a cloud server. All investors have to do is to check the trading profits regularly.
Advantages of Grid Trading at CITEX Exchange
1) Consistent Profits
When the prices of digital currencies fluctuate, no matter investors maintain “long” position or “short” position, profits are hard to be obtained. However, by using the Grid Trading function of CITEX exchange, investors are able to buy at low prices and sell at high prices in batches. This automatic system will help investors profit from the volatility of the market.
2) Mechanical Trading Overcomes Human Weakness
Grid Trading is a user-friendly function of CITEX exchange. With just one click, built-in parameters will be automatically generated by the system. The mechanical trading system will execute trade orders automatically, minimizing emotional trading or human errors throughout the process and maximizing the profits for investors.
3) Professional Development and Maintenance Team
CITEX is the world’s leading PoW coin exchange. CITEX Grid Trading function is developed by professional quantitative team. By adopting cloud-based custody solutions, the whole trading process is both secure and reliable.
Grid Trading Mechanism and Parameters
The logic for grid trading is “buy low and sell high”, without predicting the directions of the market. The automated trading requires investors to predefine several parameters as follows:
Base price: The price from which the grid trading strategy will be executed.
Cryptocurrency Invested: The amount of cryptocurrency invested, such as the number of BTCs.
Capital Invested: The amount of capital invested, such as the number of USDTs.
High Price: The upper limit for implementing the strategy.
Low Price: The lower limit for implementing the strategy.
Grids Number: The number of grids between the highest price and the lowest price.
Trading Number: The number of coins bought or sold every time a trade is triggered
What is grid trading mechanism?
Grid trading will allow the purchase of an asset when its price falls down by a certain amount (or percentage) from a base price, and the sale of the asset when its price goes up by a certain amount (or percentage) from the base price.
As grid trading is a strategy for spot market, only investors with positions are able to sell. Moreover, investors also need to have enough capital to place buy orders, otherwise, the system is impossible to perform the orders. Therefore, it should be noted that coins or capital in the account should be enough before the start of grid trading strategy, so that the trading will be completed smoothly.
Examples of Grid Trading
Step1: Making Grid Trading Plan: Let’s assume that an investor has 200,000 dollars for trade, and each level of the grid is allocated 10,000 dollars; therefore, he is able to set up a grid system with 10 levels above the set price and 10 levels below the set price; for example, if he takes a position when the price of EOS is at 10 dollars, with a 1-dollar price range for each grid level, his grid system will cover a price range from 20 dollars to 1 dollar.
Step2: Purchase of Cryptocurrencies: Following the work method of grid trading, every time the price goes down 1 level below the base price, related capital will be invested in. For example, if the price falls from 10 dollars to 9 dollars, 10,000 dollars will be invested. If the price falls down from 9 dollars to 8 dollars, another 10,000 dollars will be invested.
Step3: Sale of Cryptocurrencies: When the price goes up to 1 dollar higher than the purchase price, the related position will be sold. For example, the position of 10,000 dollars bought at the price of 8 dollars will be sold when the price goes back to 9 dollars. The position of 10,000 dollars bought at the price of 9 dollars will be sold when the price goes back to 10 dollars, so on and so forth.
The above-mentioned method is the Grid Trading mechanism. When the base price, grid density, and capital invested per grid level are defined, the system will be ready to execute the trading.
- How does grid trading work? Should I keep the APP open the entire time?
There is no need to keep the APP open all day. A grid trading server will operate for users 7/24 hours. All users need to do is to create grid trading orders at the APP of CITEX. After the parameters are set, the server will operate according to users’ requirements for 7/24 hours until it automatically stops, or a stop-loss price is reached.
- Is the profitof grid trading equal to “revenue minus transaction fees”?
Currently the grid trading revenue include transaction fees. (It is because different users may have different forms of transaction fees, such as commission rebate, deduction, and discount.)
- What does users earn from grid trading, token or USDT?
Users will earn USDT from grid trading. (For example, when a user trade the BTC/USDT pair, he will earn USDT.)
- How is the profit conversion of grid trading calculated?
Grid trading order profit conversion refers to the sum of the difference made after each grid buy and sale.
- How is the estimated annualized rate of grid transactions calculated?
Estimated annualized rate of grid trading = profit conversion/initial investment asset USDT conversion/operating hours *24*365*100%
- In what scenarios will grid trading has a better chance to profit?
When the market price fluctuates at horizontal movement or upward movement, users will make profit though constantly “buying low and selling high”.
- Is grid trading maker or taker?
- Do I have to pay for the CITEX grid trading function?
At present CITEX gird trading is at the stage of being promoted. For this stage, it is free of charge. At later stages, we may charge based on the trading volume, or adopt other operation strategies, such as monthly payment.