Futures Grid Trading Tutorial
Dear Global Bitgetters,
What Is Futures Grid?
A grid is a type of futures grids. If it is predicted that there will be fluctuations in the market favorable for a long position, you can set a price range, buy an initial position, and place buy orders and close-long orders in the corresponding grid simultaneously. In this way, you can make a profit on market changes by continuously buying positions and closing long positions.
Risk Alert
Futures grid trading is a tool that should not be regarded as financial or investment advice. Grid trading profit is susceptible to one-sided bear market (normal grid) or misplaced price intervals.
While generating a huge profit, futures grid training might also bring a big loss to you. Volatile price changes might cause all your margins to be liquidated.
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.
How to Start Futures Grid Trading?
1. Access futures grid trading
Web: On Bitget website, click [Strategy Trading] - [Futures Strategy Trading] on the navigation bar to access the page of futures grid trading.
Mobile: Tap [Strategy] - [Futures Strategy Trading] to access the page of futures grid trading.
Mobile:
2. Select a trading pair
Select a trading pair on the trading page. Please note that only one strategy can be created for a trading pair. If there is already a strategy, you will not be able to create another one.
3. Create grid strategy
3.1 Create AI Strategy (An easy 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 profitable parameters. The Annual Percentage Yield (APY) is calculated by the AI strategy when the leverage is 1X. Your current leverage and position mode are displayed on the strategy interface. If you need to modify them, you can do that by clicking [Modify] and accessing the futures trading page. After that, you only need to select the initial margin and click [Create].
Whether to close the position at the termination of the strategy means you can choose at your own discretion. If you choose yes, the position that is generated based on the grid strategy will be closed at the termination of the strategy.
3.2 Manual creation
Basic settings
- Lower price: Bottom of the grid trading price range. The system will no longer execute orders when the market price is lower than the Lower Price.
- Upper price: Top of the 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.
- Available amount: The available balance in your futures account.
- Initial margin: The amount that users need to input to start grid trading.
- Leverage: You can modify the leverage on the futures trading page. Due to large fluctuations in coin prices, we advise against setting high leverage. If your current leverage is too high, we would recommend an appropriate one.
- Position mode: You can modify the position mode on the futures trading page. We support running the grid strategy with either isolated position mode or cross position mode.
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 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)
Check your Futures Grid orders
1. For running orders
After creating the grid, click the [Running] tab to check ongoing and pending grid orders. Users can click [Terminate] to terminate the ongoing orders. Or, click [Share] to share that strategy.
2. For past orders
Click the [History] tab to check your grid trading history.
Formulas
1. The minimum margin required to start grid trading
It is calculated based on the grid interval, the number of grids, and the minimum number of orders to be placed to ensure that the grid strategy can normally start and work. Specifically, the margin includes the following three parts:
- To ensure there are orders in a grid, there should be a margin for placing buy orders below the starting price and another margin for opening positions and placing sell orders (you need to open positions before placing sell orders) above the starting price.
- Due to huge fluctuations in digital assets, we need to multiply the margin for placing sell orders by a coefficient which is subject to the recent market situations.
- Transaction fees reserved. As no profit is generated in an early stage of grid trading, transaction fees should be reserved to ensure that positions can be opened smoothly.
2. Profit calculation
Initial margin
It refers to the margin that is invested when the user creates the grid strategy. It depends on the leverage during creation. The calculation of subsequent yields relies on the margin of corresponding leverage when a strategy is created.
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
Annual Percentage Yield (APY)
Annual Percentage Yield (APY) = total profit/initial margin/number of running days x 365
Example
Futures long grid
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 parameters, the price structure of this strategy will be placed at (USDT): 60,000, 56,000, 52,000, 48,000, 44,000, 40,000.
Long grid orders are placed from the top grid to the bottom grid. When a long grid 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 long-position order at 56,000 USDT. This long-position order price is higher than the current price (50,000 USDT), so in theory, it will be immediately filled. After the 56,000 USDT order is filled, a new sell order will be placed at 60,000 USDT. When the long-position 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 long-position order at 48,000 USDT cannot be filled, and therefore no sell orders will be placed at 52,000 USDT. Similarly, the long-position orders at 44,000 USDT and 40,000 USDT will not be filled.
This is how 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:
After the grids are activated, when the price drops to 48,000 USDT, the long-position order will be filled, and a close-long order will be placed at 52,000 USDT simultaneously.
If the price keeps going down and falls back to 52,000 USDT, the close-long order will be filled, and a long-position order will be placed at 48,000 USDT so as to achieve “Buy Low Sell High”.
If the BTC price exceeds 60,000 USDT or declines below 40,000 USDT, the strategy will be terminated.
When the BTC price returns to the price interval of the grid, trading will be resumed based on the strategy.
Bitget Team
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