Tutorial
Add/Remove Margin of a Running Grid
Frequently Asked Questions
Tutorial
Grid trading is a trading bot that automates the buying and selling of Futures contracts. It is designed to place orders in the market at preset intervals within a configured price range.
Grid trading is when orders are placed above and below a set price, creating a grid of orders at incrementally increasing and decreasing prices. In this way, it constructs a trading grid. For example, a trader could place BTC buy orders at every 1,000 USDT below the market price and place sell orders at every 1,000 USDT above the market price to take advantage of ranging conditions.
Grid trading performs best in volatile and sideways markets when prices fluctuate in a given range. This technique attempts to make profits on small price changes. The more grids you include, the greater the frequency of trades will be. However, it comes with an expense as the profit you make from each order is lower.
Thus, it is a tradeoff between making small profits from many trades, versus a strategy with lower frequency but generates a bigger profit per order.
How does Binance Grid Trading work?
Binance Grid Trading now supports USDâ-M and COIN-M Futures. You can customize and set grid parameters to determine the grid's upper and lower limits and the number of grids. Once the grid is created, the system automatically buys or sells orders at preset prices.
Letâs understand how it works.
You expect Bitcoin to hover in a price range between 50,000 USDT and 60,000 USDT in the next 24 hours. In this case, you could set up a grid trading system to trade within this predicted range.
On the grid trading panel, you could set parameters of the bot, including:
- The upper and lower boundaries of the price range;
- The number of orders to be placed within the configured price range; and
- The width between each buy and sell limit order.
In this scenario, as the BTC price falls toward 55,000 USDT , the grid trading bot will accumulate buy positions on the way down at a lower-than-market price. As the price recovers, the bot will sell on the way up at a higher-than-market price. This strategy essentially attempts to profit from price reversions.
For more details, please read What Is Long/Short Grid Trading.
Risk Warning
Grid trading as a strategic trading tool should not be regarded as financial or investment advice from Binance. Grid trading is used at your discretion and at your own risk. Binance will not be liable to you for any loss that might arise from your use of the feature. It is recommended that users should read and fully understand the Grid Trading tutorial and make risk control and trade rationally within their financial ability.
How to set up a Grid Trading strategy?
1. Log in to your Binance account and go to [Derivatives] - [Binance Futures Overview]. Click [Trading Bots] - [Futures Grid].
You can also access the Futures Grid Trading interface by clicking [Trading Bots] - [Futures Grid].
If youâre using the Binance App, go to [Futures] - [USDâ-M Futures] or [COIN-M Futures]. Select a trading pair and tap [Grid] at the bottom left.
2. Select a symbol to execute the strategy and set the grid parameters. Select the grid direction (Long, Short, or Neutral), the range, the number of grids, and order size. Then click [Create] to confirm. For example, the screenshot below shows the steps for creating USDâ-M Futures Grids.
Please note that the following conditions might prevent the successful creation of a new grid:
- If there is an existing active grid trading bot for the chosen symbol.
- If there are open orders or open positions associated with the selected symbol.
- If the account is set to the Hedge Mode; it must be adjusted to the One-Way Mode.
- If the maximum limit for grid strategies has been reached:
- You can have up to 24 grid strategies for USDâ-M Futures: 20 on Cross Margin and 4 on Isolated Margin.
- This is separate from COIN-M Futures, which has a limit of 20 grid strategies using Cross Margin (as Isolated Margin is not available for COIN-M).
Grid Trading Mechanism
Letâs use the USDâ-M Futures BTCUSDT Perpetual contract as an example to understand the process for grid trading.
- Setting a Grid Trigger (optional)
- Defining the initial structure of your grid strategy
- Initial grid creation process
- Grid Update
- Setting a Stop Trigger (optional)
- Order Cancellation
Setting a Grid Trigger (optional)
For parameters #10 & #11:
You can place your grid limit orders immediately or trigger them when the market price reaches a certain value. The grid orders will be triggered when the market price (Last price or Mark price) rises above or falls below the trigger price you enter.
Defining the initial structure of grid strategy
For parameters #1, #2,# 3,# 4, and #6:
You can determine a series of price levels according to the latest market price (buy, sell, mid-price), and place sell limit orders at a price higher than the market price, and a buy limit order at a price lower than the market price. After that, you can wait for the limit orders to be triggered and executed.
Initial grid creation process
For neutral grids, the strategy does not involve an initial position. Instead, the initial position is established only when the market exceeds the closest price point after the initial setup.
Example:
Suppose you have set your strategy parameters as such:
- Contract: BTCUSDT Perpetual
- Lower price: 20,000 USDT
- Upper price: 45,000 USDT
- Number of grids: 5
- Mode: Arithmetic
The price distribution will be as follows: 20,000 USDT, 25,000 USDT, 30,000 USDT, 35,000 USDT, 40,000 USDT, 45,000 USDT
Initial sell orders for the neutral grid will be placed above the current market price. Meanwhile, the buy orders will be populated below the current market price. Note that the price nearest to the market price would be excluded. In this scenario, the initial grid limit orders will be populated as such:
| Direction | Price |
| Sell | 45,000 USDT |
| Sell | 40,000 USDT |
| Buy | 30,000 USDT |
| Buy | 25,000 USDT |
| Buy | 20,000 USDT |
Grid Update
Grid update means that every time a price point is touched, i.e., a limit order is filled, the grid limit order will update in time. The price of the most recently executed order will always be the one that is switched off, meaning it will not trigger any order. Buy or sell limit orders are then filled in again according to the set parameters to maintain the number of limit orders in the grid.
For example, the initial market price is 10,010 USDT , and the grid limit price at each unit is:
Price | Direction |
10,200 USDT | Sell |
10,100 USDT | Sell |
10,000 USDT | Buy |
9,900 USDT | Buy |
9,800 USDT | Buy |
Assuming that the price drops to 10,000 USDT and the buy order (the initial open position) is executed, the grid limit orders will become:
Price | Direction |
10,200 USDT | Sell |
10,100 USDT | Sell |
10,000 USDT | - |
9,900 USDT | Buy |
9,800 USDT | Buy |
Letâs assume the price then rises to 10,100 USDT, triggering the execution of the 10,100 USDT sell order. The grid limit orders will be updated as follows:
Price | Direction |
10,200 USDT | Sell |
10,100 USDT | - |
10,000 USDT | Buy |
9,900 USDT | Buy |
9,800 USDT | Buy |
If after that the price drops to 9,900 USDT, the two buy orders (10,000 USDT and 9,900 USDT) are then executed, and the grid limit orders will be subsequently updated as follows:
Price | Direction |
10,200 USDT | Sell |
10,100 USDT | Sell |
10,000 USDT | Sell |
9,900 USDT | - |
9,800 USDT | Buy |
And so on.
5. Setting a Stop Trigger (optional)
For parameter #12:
You can manually terminate grid operation or set Stop Trigger.
Stop Trigger: When the market price rises above Stop_upper_limit or falls below Stop_lower_limit, i.e., the market is no longer following a swinging trend, the grid will stop its operation.
6. Order Cancellation
For parameters #13 & #14:
You can choose to cancel all orders and close all positions manually or automatically after the grid has been stopped.
When the [Cancel all orders on stop] is enabled, the system will automatically cancel all the unfilled orders for the symbol when the grid is stopped. When the close all positions on stop is enabled, the system will automatically close all open positions at market price for the symbol when the grid is stopped.
Please note that during grid operation, the following scenarios will cause the grid to terminate:
- Manually terminate the grid;
- Insufficient margin causes some positions to be liquidated or fail to place orders;
- Manually cancel some or all grid limit orders;
- Manually close some or all grid positions;
- When the delivery contract is delivered, the product no longer exists and the grid strategy will be automatically stopped. During the delivery process, the system will automatically remove your limit orders and settle open positions.
The system will notify you if a grid is currently in operation. For example, the recommended grid trading leverage is below 20x. If the leverage continues to be higher than 20x, you will see a second reminder to lower the leverage.
How to set up the Grid Trading parameters?
Choose the contract on which the trading bot will be deployed.
1. Cross Margin Mode and Leverage for Grid Trading
All grids, whether in USDâ-Margined or Coin-Margined, operate in the Cross Margin mode by default. Currently, only the Cross Margin mode is supported for grid trading.
In the Cross Margin mode, the margin is pooled together and shared among all trading pairs within the userâs Futures account.
Start by adjusting the leverage. Leverage magnifies both gains and losses. With leverage, you can magnify relatively small price movements to potentially create profits. However, leverage is a double-edged sword, please use it prudently.
2. Lower/Upper Price
*Cannot be modified after placing the grid order
Set the lower price and the upper price of the grid. If the highest or the lowest grid is exceeded, no more positions will be opened. For example, if the current BTCUSDT perpetual Futures price is 48,000 USDT and you expect the price will fall when it goes above 49,000 USDT. In this case, you can set the upper price to 49,000 USDT. After the price reaches 49,000 USDT, the grid will no longer open positions.
3. Arithmetic/Geometric Mode
*Cannot be modified after placing the grid order
Arithmetic: Each grid has an equal price difference.
The arithmetic grid divides the price range from grid_lower_limit to grid_upper_limit into grid_count by an equal price difference.
The price difference of each grid is:
price_diff = (grid_upper_limit - grid_lower_limit) / grid_count
Then it constructed a series of price intervals:
price_1 = grid_lower_limit
price_2 = grid_lower_limit + price_diff
price_3 = grid_lower_limit + price_diff * 2
...
price_n = grid_lower_limit + price_diff * (n-1)
At grid_upper_limit, n = grid_count
Example: Arithmetic price_diff = 100: 1,000, 1,100, 1,200, 1,300, 1,400,... (the next price is 100 higher than the previous one)
Geometric: Each grid has an equal price difference ratio.
The geometric grid divides the price range from grid_lower_limit to grid_upper_limit into grid_count by an equal price ratio.
The price ratio of each grid is:
price_ratio = (grid_upper_limit / grid_lower_limit) ^ (1/grid_count)
The price difference of each grid is:
price_diff_percentage = ( (grid_upper_limit / grid_lower_limit) ^ (1/grid_count) - 1) * 100%
Then it constructed a series of price intervals:
price_1 = grid_lower_limit
price_2 = grid_lower_limit * price_ratio
price_3 = grid_lower_limit * price_ratio ^ 2
...
price_n = grid_lower_limit * price_ratio ^ (n-1)
At grid_upper_limit, n = grid_count
Example: Geometric grid price_diff_percentage = 10%: 1,000, 1,100, 1,210, 1,331, 1,464.1,... (the next price is 10% higher than the previous one)
4. Grids (i.e., number of limit orders)
*Cannot be modified after placing the grid order
- Minimum: 2
- Maximum: 169
Note: Price difference cannot be lower than the tick size, otherwise you need to adjust the Grid_count or Grid upper/lower limit.
How to calculate?
1). Arithmetic grid, price_diff = (grid_upper_limit - grid_lower_limit)/gridCount < tickSize
2). Geometric grid, min_price_diff = grid_lower_limit*price_ratio < tickSize , price_ratio = (grid_upper_limit / grid_lower_limit) ^ (1/grid_count)
5. Profit/Grid (After deducting the trading fees)
If the profit/grid is less than the maker commission, you will be notified that the total grid profit may not be able to cover trading fees.
How to calculate? (The profit/grid displayed is for reference only)
1). Arithmetic grid
d = (grid_upper_limit - grid_lower_limit) / grid_count
c = TradingFeeRate (your current maker fee rate)
profit_per_grid_lower = (grid_upper_limit * (1-c)) / (grid_upper_limit-d) - 1 - c
profit_per_grid_higher = (1-c) * d / grid_lower_limit-2c
Example: Price interval = 1,000 - 2,000, Grid_count = 10, Commission = 0.1%
Price difference of each grid is = (2000-1000) / 10 = 100
profit_per_grid_lower = (2000*(1-0.1%)) / (2000-100) - 1 - 0.1% = 5.05%
profit_per_grid_higher = (1-0.1%) * 100 / 1,000 - 2 * 0.1% = 9.79%
2). Geometric grid
r = (grid_upper_limit/grid_lower_limit) ^ (1/grid_countďź
c =TradingFeeRate (your current maker fee rate)
profit_per_grid_geo = (1-c) * r - 1 - c
Example: Price interval = 1,000 - 2,000, Grid_count = 10, Commission = 0.1%
Price ratio of each grid is = (2,000 / 1,000) ^ (1/10) = 107.18%
Profit/grid = (1 - 0.1%) * 107.18% - 1 - 0.1% = 6.97%
6. Initial Margin
*Cannot be modified after placing the grid order
Initial margin = initial_value / leverage
You can adjust the percentage of the investable amount up to 100% (Initial margin = percentage * margin balance). Please note that it must be within the interval between the min_initial_margin and the margin balance.
For USDâ-M Futures Grid
Calculate the min grid qty:
min grid qty = max(minQty, minNotional/grid_lower_limit)
- Direction Neutral
min_initial_margin= min grid qty * sum (price)/ (leverage * adjust_coefďź
- Direction Long/Short Grid
âassuming priceâ is defined as per the following formulas:
assuming_price (BUY) = price*
assuming_price (SELL) = max (mark_price, price)
*âpriceâ is the price of every order in the grid trading strategy, automatically set by the grid parameters. This definition applies every time âpriceâ is quoted moving forward in the article.
min_initial_margin = sum (min grid qty * assuming price + leverage * min grid qty * abs {min [0, side * (mark price - price)]}) / (leverage * adjust_coef)
Note: If you have set a trigger price, the mark price should be replaced by the trigger price.
For COIN-M Futures Grid
- Direction Neutral
min_initial_margin = min grid qty * sum (contract_multiplier / price) / (leverage * adjust_coef)
- Direction Long/Short Grid
Define assuming price:
assuming_price (BUY) = price
assuming_price (SELL) = max (mark_price, price)
min_initial_margin = min grid qty * sum (contract_multiplier / (leverage * assuming price ) + contract_multiplier * abs {min [0, side * (1 / Order's Price - 1 / mark price)]}) / adjust_coef
*âmin grid qtyâ is the minimum trade amount of the symbol. You can find more details on the trading rules page.
*If you have set a trigger price, the mark price should be replaced by the trigger price.
*Currently, the adjust_coef has defaulted to 0.8. It will be adjusted according to market conditions.
7. Total Investment
*Cannot be modified after placing the grid order
Total investment = Initial margin * leverage
Total investment = Initial margin * leverage
8. Qty/Order
For USDâ-M Futures Grid
Direction Neutral:
grid_qty = adjust_coef * initial_margin * leverage / sum (price)
Direction Long/Short Grid:
âassuming priceâ is defined as per the following formula:
assuming_price (BUY) = price
assuming_price (SELL) = max (mark_price, price)
grid qty = adjust_coef * initial_margin * Leverage / sum (assuming_price + leverage * abs (min (0, side * (mark_price-price)) ) )
*If you have set a trigger price, the mark price should be replaced by the trigger price.
For COIN-M Futures Grid
Direction Neutral:
grid qty = adjust_coef * initial_margin * leverage / sum (1 / price)
Direction Long/Short Grid:
âAssuming priceâ is defined as per the following formula:
assuming_price (BUY) = min(mark price, price)
assuming_price (SELL) = price
grid qty = adjust_coef * initial_margin * Leverage / sum(contract_multiplier /assuming_price + leverage *contract_multiplier* abs(min(0, side*(1 / price - 1 / mark price)) ) )
*If you have set a trigger price, the mark price should be replaced by the trigger price.
9. Available Margin Balance
The margin balance of your USDâ-M or COIN-M Futures account.
10. Trigger_type: Last Price / Mark Price
*Optional, can be modified before the grid is triggered
1). Grid trigger type: When the last price or the market price you choose reaches the trigger price, the grid will start running.
2). Stop trigger type: When the last price or the market price reaches the top or bottom stop price, the grid will be stopped.
11. Trigger_price
*Optional, can be modified after placing the grid order
Your grid order will be triggered when the last price or the mark price rises above or falls below the trigger price you set.
12. Stop_upper_limit (Stop-loss top price) / Stop_lower_limit (Stop-loss bottom price)
*Optional, can be modified after placing the grid order
1. Stop_upper_limit price
- For Neutral grid, it is called Stop top price;
- For Long grid, it is called Take profit price;
- For Short grid, it is called Stop loss price.
The stop_upper_limit price should be higher than the upper price, the last price, and the trigger price. When the latest market price reaches the Stop_upper_limit, the grid will stop working.
2. Stop_lower_limit price
- For Neutral grid, it is called Stop bottom price;
- For Long grid, it is called Stop loss price;
- For Short grid, it is called Take profit price.
The stop_lower_limitprice should be lower than the lower price, the last price, and the trigger price. When the latest market price reaches the Stop_lower_limit, the grid will stop working.
13. Close All Positions on Stop
*Optional, can be modified after placing the grid order
You can enable this function to automatically close all open positions of the symbol at the market price when the grid stops.
*Please note that the above parameter setting suggestions are for reference only. Futures trading carries a substantial risk and the possibility of both significant profits and losses. Past gains are not indicative of future returns. All of your margin balance could be liquidated in the event of extreme price movement. Binance shall not be liable for any of your losses.
How to calculate the current margin?
position_notional = Latest_Mark_Price * size
position_notional_value = abs (position notional)
present notional = max (abs (position_notional + open order's bid_notional), abs (position_notional - open order's ask_notional))
*Abs: absolute value
open order's ask_notional = askNotional
open order's bid_notional = bidNotional
- Crossed margin:
Current margin = present notional / current leverage
Maintaining an optimal margin is vital for ensuring the smooth functioning of your trades using Futures Grid Trading.
The "Add/Remove Margin" feature on Binance Futures Grid provides you the flexibility to manage your margin for running trades. This can be particularly useful to avoid liquidations, especially in a volatile market.
Adding margin gives your trade more cushion, while removing margin retrieves excess funds from a position.
However, adjusting the margin doesn't affect the actual size of the position or the Return On Equity (ROE).
However, adjusting the margin doesn't affect the actual size of the position or the Return On Equity (ROE).
The maximum amount you can remove is determined by either the profit earned from the grid or any additional margin you've added after the grid's creation.
In other words, the upper limit for removal is the lesser of the two following values:
In other words, the upper limit for removal is the lesser of the two following values:
- Your current balance minus the initial margin, or
- The maximum withdrawal amount available in the trading bot's cross margin balance.
How to use the add/remove margin function to Running Grid?
If youâre using the Binance website:
1. Go to the trading interface and find your running orders.
2. Look for the position you want to adjust. Click the [+] button next to the initial margin.
3. A pop-up box will appear, you can choose to add margin or remove margin.
4. Specify the amount of margin you wish to add or remove from the selected grid.
Note: The interface will provide insights, such as the margin balance change and the margin ratio change, to give you a clear picture of the outcome from your input. Please note that adjusting your margin will not modify your position size or your ROE.
If youâre using the Binance app Pro version:
1. Go to [Trading Bots] - [Futures Grid].
2. Tap [All Orders].
3. Tap [Adjust Margin].
Alternatively, you can also go to the [Running Order Detail] page and tap the [+] button next to your margin balance.
4. Youâll see a pop-up window. Choose [Add Margin] or [Remove Margin]. Then, enter the margin amount you wish to add to or remove from the selected grid.
How to check my grid details?
Time | The time when the grid was created |
Symbol | Click on the leverage next to the symbol to adjust the grid leverage |
Initial Margin | Margin at the time of grid creation |
Total Profit | Total Profit = Realized Profit + Unrealized PnL + Funding Fee Notes: If the [Close all positions on stop] function is enabled with open positions under the grid, all positions will be closed at market price after the grid stops. The PnL of the closing positions are included in the grid profit. |
Total Profit (%) | ROI = Total Profit / initial_margin * 100% |
Matched profit | The total profit for each matched order. |
Unmatched PnL | Unmatched PnL = Total Profit - Matched Profit |
Realized profit | Realized profit and loss from grid trading is the cumulative realized profits of all completed orders, minus the trading fees. For arithmetic grid, Total Profit = Number of Completed Orders * Profit/Grid - Total Commission |
Unrealized PnL | Unrealized profit and loss on open positions calculated based on Last Price, and return on equity percentage |
Duration | The time the grid has been in operation since the grid is triggered |
Liq. Price | Please refer to the calculation of the liquidation price for USDâ-M Futures contracts and COIN-M Futures contracts. |
Grid Status |
|
- Grid Termination
You can click [End] under [Action] to stop the grid. You can also choose to cancel unfilled orders and close all positions manually or automatically after the grid is stopped.
When the [Cancel all orders on stop] function is enabled, the system will automatically cancel all unfilled orders of that symbol when the grid is stopped. When the [Close all positions on stop] function is enabled, the system will automatically close all open positions of the symbol at the market price when the grid is stopped.
- Running Grid Order
You can see all your open orders, including partially filled orders.
- Completed orders
You can see a summary of all completed orders. Each transaction consists of a pair of corresponding buy and sell orders. Profits are calculated based on each pair of matched buy and sell orders.
Please note that the BNB commission fee is converted into margin assets using the real-time exchange rate at the time of the transaction.
How to check my grid history?
Go to the [History] tab to check your grid order history and view grid details.
Grids Status
Canceled: You manually terminated the grid
Expired: The grid was terminated due to the reasons below:
- The order failed to place;
- You manually placed or canceled an order, which caused the grid to stop;
- The market price has reached the stop-loss price of the grid strategy;
- The position has been liquidated;
- The maximum number of open orders has been reached;
- Insufficient margin account balance;
- The order price is above the limit price;
- The market is closed or paused;
- A position failed to close or was unable to fill;
- The maximum allowable notional value at the current leverage level has been exceeded.
What could lead to the automatic cancellation of my Futures Grid on Binance?
Symbol max leverage adjustment
1. What happens when Binance adjusts a symbol's max leverage?
If Binance adjusts the leverage bracket for a particular symbol, active grid orders using leverage above this new limit will expire whenever a new order is placed.
If Binance adjusts the leverage bracket for a particular symbol, active grid orders using leverage above this new limit will expire whenever a new order is placed.
For example, if ADAUSDT initially had a maximum allowable leverage of 75x and is subsequently deleverage to 70x, all running grids with leverage settings between 71x and 75x will be terminated as soon as new orders are placed.
2. How to prevent my grid from expiring due to leverage changes?
- Keep an eye on the leverage settings in the Binance Futures trading interface to ensure you're within the acceptable range for your trading pairs.
- Use a leverage level well within the current max leverage bracket can offer some safety buffers.
- Always refer to the Trading Rules to monitor the max leverage per symbol on USDâ-M and COIN-M Futures markets.
Symbol delisting
In rare cases, a trading pair may be delisted. This will cause all corresponding grid orders to expire. Always keep an eye on Binanceâs announcements for such occurrences.
Insufficient margin
Grids may also expire if there isn't sufficient margin to support them. Make sure to monitor your account balance and top-up your margin as needed.
Liquidation
If the market moves against your position substantially, the risk of liquidation increases. Using lower leverage or adding more margin can help mitigate this risk.
Understanding the Close All Positions on Stop feature
The Close All Positions on Stop (CPS) feature allows traders to halt their trading strategy and manage their open positions more effectively. Itâs designed to give traders more control over their open positions when they decide to terminate or stop their grid trading strategy.
When terminating your grid strategy, you can decide whether to keep the position open or close via market orders.
For example, if you want to stop your BTCUSDT perpetual grid (or any other trading pair grid), youâll be prompted to select whether the system should close all open positions.
- Choosing"Yes, please help me close all positions" means that all current positions will be closed at the prevailing market price once the grid is ended.
- Choosing "No, Iâll handle it myself" requires you to manually close all positions after terminating the grid.
Pre-setting the CPS
When setting up the grid order, you have the option to pre-set whether you want to activate the CPS feature. This means you can decide in advance if your positions should automatically close at market price once the grid stops, offering more automation and peace of mind.
Notes
Regardless of whether you choose to enable or disable the CPS feature, the system will cancel the grid's open orders upon the termination of the grid.
If the CPS feature is activated, all positions associated with that grid will be closed at the current market price. If disabled, the positions will remain open, but you must manage them manually after the grid's termination.
In essence, the Close Position on Stop feature provides you with an added layer of strategy management.
When you end the grid but choose to keep your positions, you can check them under the [Running] tab and use market or limit orders to close any position.
If you use a limit order to close a position, you can check the open orders under the [Running] tab and cancel any order you see fit.
To view executed orders, go to the [Trading Bots Order] page.
