Here I would like to introduce grid trading to you. Grid trading is suitable for counter-trend trading, volatile market, and violent fluctuation market.
For example, ARPA and LINA meet the two conditions of counter-trend and violent fluctuation.
But there is another premise, the fundamentals of these two coins, their fundamentals are not favorable, they are pure speculation,
So what are the benefits of grid trading?
On the one hand, it is similar to batch trading, and you won't "go all in" when you open a position. This is essentially a form of risk control.
On the other hand, it can automatically sell high and buy low to achieve arbitrage. The greater the volatility, the more profit the grid will make.
Finally, it can avoid human influence and emotion, and once the strategy is formulated, it can be strictly implemented.
Therefore, grid trading is a simple and effective method that is applicable to many scenarios.
Grid strategy selection
First, we need to judge the future trend of the target. For example, if the bitcoin price is halved next year, it will rise sharply. Then we can choose to go long on the grid.
The second is to select a range, such as 0-10
Then determine the volatility, you can choose the average amplitude of 15 minutes or 1 hour,
Assuming an average amplitude of 1%
Calculate the number of grids by range and volatility, the median of the interval = (10-0)/2 = 5, the range of a single grid = 5*1% = 0.05
Number of grids = interval/single grid range = 10/0.05 = 200
Other settings, set the manual position closing when the grid stops,
In extreme cases, the grid is broken and becomes naked short, which is equivalent to stopping the grid, but the corresponding positions are still there.
