Grid Trading
Strategy based on preset grid orders to profit from sideways market movements.
Beginner-friendly explanation
Grid trading is a strategy where you place multiple buy and sell orders at regular price intervals. It creates a sort of grid: every time the market moves, an order may trigger. It works best when prices go up and down within a range, without a clear trend.
Example: You set buy orders every $100 below Ethereum’s current price, and sell orders every $100 above. As the price moves, you gradually make small profits.
Intermediate-level insight
Grid trading exploits price swings in a ranging market by setting orders at fixed intervals. Each buy in the lower zone aims to be sold in the upper zone. This strategy can be manual or automated via a bot. It requires careful capital management to avoid losses if the market breaks out of the range.
Example: A trader configures a BTC grid bot between $25,000 and $30,000. If the price drops to $24,000, all buy orders are triggered without chance to sell: risk increases.
Advanced perspective
Grid trading builds a matrix of orders (horizontal or mixed) to capture volatility. Its efficiency depends on: grid width (distance between orders), position sizing, presence or absence of SL, exit strategy (partial TP, trailing grid, adaptive range). Some grids are dynamic (recalculated based on volatility, ATR, or market structure). Widely used in market-making, it demands strong resilience to sharp moves and strict money management.
Example: An adaptive grid strategy adjusts buy/sell levels based on volatility measured by ATR. This helps maintain balanced exposure without overexposing capital.
Trading Strategies
grid trading, range strategy, bot, price grid, volatility, automated positioning, capital management, TP, SL, DCA, market-making