Buy Crypto
Markets
Trade
Futures
Earn
Square
More
FAQ
Home
Support Center
FAQ
Trading Bots
Spot Grid Bot
What Is Spot Grid Trading and How Does It Work

What Is Spot Grid Trading and How Does It Work

2022-01-06 07:57
Tutorial
Frequently Asked Questions
Tutorial
Tutorial Video
Grid trading is a type of strategic tool utilizing advanced orders to automate trading. This trading bot automates buying and selling on spot trading. 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.
Binance Spot Grid Trading leverages volatile markets when prices fluctuate within a specific range. Grid Trading attempts to make profits on small price changes. Through quantitative trading, it can help you maximize trading opportunities.
Risk Warning: Grid trading is a trading tool that should not be regarded as financial or investment advice from Binance. Undisciplined setting, unilateral quotation, market prices out of the grid range, all of the above scenarios will result in losses. Grid trading is used at your discretion and at your own risk. Binance will not be liable 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 rational trading within their financial ability.

How to access Spot Grid Trading on Binance?

Log in to your Binance account on the Binance website, and click [Trade] - [Strategy Trading].
If you are using the Binance App, tap [Trade] - [Spot]. Tap [N.] and choose [The parameter mode].
Note: Spot grid trading will be migrated to Trading Bots Account. You will need to use a trading bot account to create new grid trading strategies. For more details, please see Trading Bots Account: Migration Rules and Frequently Asked Questions.

How to set up a Spot grid trading strategy?

You can create a grid trading strategy by setting up your own parameters, or select one of the preset parameters from [Strategy Pool] to start.

Using the preset parameters

*Please note that the strategy pool function is only available on the website.
1. Go to [Strategy Pool] to view all the available preset parameters. You can filter them by ROI, PNL, or popularity.
2. You will see the estimated ROI and PNL, the time the strategy has been running, and its popularity. Select the strategy you want to use and click [Use Parameter].
Please note that due to differences in market conditions, these preset parameters do not guarantee to deliver the same results.
3. Select either the [Arithmetic] or [Geometric] mode. The grid parameters are already filled and you only need to enter the investment amount. You may also set up a trigger price, a stop-loss price, and a take-profit price (optional). Click [Create] to confirm.
Please make sure that you have a sufficient balance in your Spot Wallet.

Set up your own parameters

1. Go to [Create Strategy]. Click [Create] under [Spot Grid].
2. You will be redirected to the Spot Grid Trading interface. Select a trading pair from the left column. For example, BTC/BUSD.
3. Go to the parameter box on the right. You can use the recommended parameters under [Auto] or set up your own from [Manual].
3.1 If you’re using [Auto], simply select the time period for the grid strategy and enter the investment amount. Click [Create] to set up.
3.2 If you choose [Manual], select either the [Arithmetic] or [Geometric] mode. Then, set the grid parameters, including the upper and lower price, grid number, and the coin to invest. You may also set up a trigger price, a stop-loss price, and a take-profit price under [Advanced (Optional)].
The system will calculate the minimum investment amount required based on the grid number and coin you selected. Enter the amount to invest and click [Create] to place your order.
Please make sure that you have a sufficient balance in your Spot Wallet.
Please ensure you fully understand each of the parameters before creating a strategy.
3.3 For more details on each advanced setting, please see the following section.

How to set up the Spot Grid Trading parameters?

1. Arithmetic & Geometric mode

  • In arithmetic mode, each grid has an equal price difference.
  • In geometric mode, each grid has an equal price difference ratio.
  • The more grids you include, the more funds you need to invest.
Arithmetic: Each grid has an equal price difference (e.g. 1, 2, 3, 4...).
The arithmetic grid divides the price range from Lower Price to Upper Price into the number of grids by equal price difference.
The price difference of each grid is:
Spread = (Upper Price - Lower Price) / Number of grids
The price distribution will be as follows:
Price_1 = Lower Price
Price_2 = Lower Price + Spread
Price_3 = Lower Price + Spread * 2
…
Price_n = Lower Price + Spread * (n-1)
The highest price is the Upper Price, where n = the number of grids.
Example: Arithmetic Grid = 100: 1000, 1100, 1200, 1300, 1400,... (the next price is 100 higher than the previous one).
Geometric: Each grid has an equal price difference ratio. The price range of each cell of the geometric grid is proportional (e.g., 1, 2, 4, 8...). The profits are fixed between each grid.
The geometric grid divides the price range from the Lower Price to the Upper Price into the number of grids by equal price ratio.
The price ratio of each grid is:
Ratio = (Upper Price / Lower Price) ^ (1/n) * 100%
n = the number of grids
The price distribution will be as follows:
Price_1 = Lower Price
Price_2 = Lower Price * Ratio
Price_3 = Lower Price * Ratio ^ 2
…
Price_n = Lower Price* Ratio ^ (n-1)
The highest price is the Upper Price, where n = the number of grids.

2. Lower Price and Upper Price

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.

3. Grids

Divide the interval upper limit price and interval lower limit price into corresponding shares.

4. Invested Coin

You can choose to invest in single or dual crypto.
For example, if you chose to invest by BTC, the strategy will only use BTC from your Spot Wallet. If you choose to invest by BTC+BNB, the strategy will use both BTC and BNB from your Spot Wallet.
Please note that the actual investment amount required for the Grid Trading strategy depends on the market and may not equal the amount you entered.

5. Available amount

The available assets in your Spot Wallet.
Your grid creation might fail if there is insufficient balance in your Spot Wallet. Please note that the frozen assets from other open orders cannot be used to place new orders. You can cancel your open orders to utilize your available assets, or adjust the number of grids to reduce the investment amount required to open orders.

6. Trigger Price (Optional)

The grid orders will be triggered when the Last Price rises above or falls below the trigger price you entered.

7. Stop Trigger (Optional)

You can use Stop Trigger to stop trading when the market price triggers the set prices:
  • Stop Loss: should be less than the lower price, last price and trigger price; when the latest market price reaches the Stop Loss price, the grid will stop working.
  • Take Profit: should be higher than the upper price, last price and trigger price; when the latest market price reaches the Take Profit price, the grid will stop working.
For example, if you create a BTC grid order with no trigger price, a certain percentage of BNB will be immediately bought at the market price for opening the grid trading. If you set a trigger price, the system will wait for the market price to hit the trigger before buying BNB at the set price.
If you have both BTC and BNB in your Spot Wallet, you can also choose to invest in BTC+BNB to avoid the additional expense (e.g. transaction fees) incurred when buying BNB.

8. Sell All Base Coins on Stop

Once you enable the [Sell All Base Coins on Stop] function, the strategy will automatically sell all base coins at market price when the grid is stopped. When the function is disabled, all base coins will be kept in your Spot Wallet.
Note:
  • After terminating the grid strategy, the system will carefully evaluate the market liquidity and your base coin holdings. If the amount of base coin you hold is substantial or the market liquidity is poor, the system will protect your assets and may refrain from selling your base coin.
  • The [Sell All Base Coins on Stop] function is enabled by default when you open a new strategy. Please disable the [Sell All Base Coins on Stop] function if you wish to keep all base coins in your spot wallet after the strategy ends.

9. End

Click [End] to stop grid operation. Running orders will be canceled and all profits will be settled immediately at market price.
Spot Grid Trading follows the spot market trading rules. You need to abide by the rules when placing orders.

How to check my Spot Grid orders?

For running orders:

1. To check your order progress, go to the [Running] tab and click the order icon next to the order.
Alternatively, tap [Running] on the Binance App.
2. You will be redirected to the order details page.
You can check the order progress under each tab:
  • Working: Your ongoing Grid trading orders;
  • Completed: Orders already filled under this strategy;
  • Grid Details*: Details of your grid settings. You can still set or edit the Stop-Trigger price under Advanced Settings after the grid has been created.
*To understand more about the Grid Details parameters, please refer here.

For past orders:

1. Click on the [History] tab to check your grid trading history and view grid details of completed orders.

Grid trading strategy example

You can use Grid Trading strategy to buy low and sell high. Let’s use BTC/BUSD as an example. Suppose your strategy parameters are set as below:
  • Upper price: 60,000 BUSD
  • Lower price: 40,000 BUSD
  • Number of grids: 5
  • Mode: Arithmetic
  • Amount invested: 10,000 BUSD
  • Current price of BTC/BUSD: 50,000 BUSD

The price structure of this strategy will be placed at 60,000 BUSD, 56,000 BUSD, 52,000 BUSD, 48,000 BUSD, 44,000 BUSD, and 40,000 BUSD according to the parameters you set.
Binance Spot Grid Trading uses normal grids. Orders are placed from the top grid to the bottom grid. When a buy order is filled, a sell order will be placed on the grid above it. As the upper price is set at 60,000 BUSD, the grid strategy will begin by placing a buy order at 56,000 BUSD. This buy order price is higher than the current price (50,000 BUSD), so in theory it will be immediately filled. After the 56,000 order is filled, a new sell order will be placed at 60,000 BUSD. When the buy order at 52,000 BUSD is filled, a sell order of 56,000 BUSD will be placed accordingly and reaches the 48,000 BUSD grid. As the current price is 50,000 BUSD, the buy order at 48,000 cannot be filled, therefore no orders will be placed at 52,000 BUSD. Similarly, the buy orders at 44,000 and 40,000 BUSD 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:
Price (BUSD)Order Type
60,000Sell
56,000Sell
52,000No orders will be placed
48,000Buy
44,000Buy
40,000Buy
After implementing Grid Trading, when the current price drops to 48,000 BUSD, the buy order will be filled and a sell order will be placed at 52,000 BUSD. When the market price pulls back to 52,000 BUSD, the sell order will be filled and a buy order will be placed at 48,000 BUSD to buy low and sell high.
When the BTC price rises above 60,000 BUSD or falls below 40,000 BUSD, the strategy will be suspended. When the price returns to the price range you set, the strategy will resume.
*Risk Warning: The above parameter settings are for reference only. Crypto trading carries a substantial risk and the possibility of both significant profits and losses. The information here should not be regarded as financial or investment advice from Binance. All trading strategies are 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 Grid Trading. We strongly recommend you set stop-trigger orders in advance to prevent uncontrollable market movements from causing irreparable losses.

Glossary:

  • Lower Price: Bottom of the grid trading price range. The system will no longer execute orders after 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 after the market price is higher than the Upper Price.
  • Grids: Divide the interval upper limit price and interval lower limit price into corresponding shares.
  • Arithmetic/Geometric Mode:
    • The price difference of each grid of Arithmetic is: Spread = (Upper Price - Lower Price) / Number of grids
    • The price ratio of each grid of Geometric is: Ratio = (Upper Price / Lower Price) ^ (1/n)*100%; n= the number of grids
  • Total Profit: Grid Profit + Unrealized P&L
  • Grid Profit: The realized profit of filled grid orders that are matched by one buy-order and one sell-order. The trading fees incurred during the strategy are already deducted in the Grid Profit.
  • Float Profit: The latest price of the base currency in the current trading pair is the base currency's average buy price. This is the floating profit/loss of the grid trade caused by the rise or fall in the market price of the base currency.
1. Why is my Grid Trading strategy terminated/canceled?
  • Currently, you can only create 1 grid trading strategy for each trading pair. Each strategy can have a maximum of 170 grids, and create up to 20 strategies in total.
  • The market price has hit the stop-trigger price you set.
  • The trading pair of your strategy is delisted or will be delisted soon.
  • The number of orders you have in the strategy has reached the maximum number you can place for that trading pair.
  • There is insufficient balance in your Spot Wallet and orders cannot be placed.
  • To protect your assets and avoid market fluctuations, the grid startup process will be halted if it requires buying an excessive number of base assets at market price. In such instances, the system will not create the grid.
2. Which wallet balance is utilized for Spot Grid Trading?
Currently, Spot Grid Trading utilizes assets in your Spot Wallet to make investments. You can check the PnL of your running orders from the Spot Wallet history.
After Binance migrates grid strategy to the Trading Bots Account, the system will automatically transfer the required funds from your Spot Wallet to the Trading Bots Account when you start a new strategy. Similarly, when you end a Spot Grid bot, the system will automatically transfer the funds back to your Spot Wallet.
3. How is profit calculated if I manually cancel or close the Grid Trading strategy?
All profits will be settled immediately at market price when you manually cancel or close the grid strategy.
4. How are the trading fees calculated?
Spot Grid Trading follows the spot market trading fee rates. Please check the Trading Fee page for more details.
5. Why do I need to deposit trading fees in advance?
When you launch a Spot Grid Trading strategy, you need to deposit a certain amount of the base currency as 'bid price'. It will be used as a reserve for deducting the Grid Trading fees. This amount is not deducted from your Spot Wallet immediately. The system will only deduct trading fees from your balance after the trade is executed. When the grid strategy stops, the remaining reserved fees will remain in your Spot Wallet. When the system detects that the reserve amount falls below half, it will automatically place buy orders for the base currency to refill the reserve. You can check the buy order details under the [Completed] tab on the Grid Trading order details page.
Important Notes:
  • The system will not freeze your assets when running the grid strategy. If you transfer the base and the quote currencies out of your Spot Wallet when the Grid Trading strategy is still running, there is a risk that the available balance will be insufficient for placing the next order and might cause the strategy to be terminated. Therefore, please check your order status before transferring assets out of your Spot Wallet.
  • If both the base and the quote currencies of your running grid strategy have enabled the automatic subscription function on Binance Savings, the transaction fees reserved will be automatically transferred to Flexible Savings, which might cause the grid strategy to be terminated due to insufficient balance. Therefore, please check whether you’ve enabled the automatic subscription function on Binance Savings for the base and the quote currencies before running the grid strategy.
6. What are base currency and quote currency?
Base currency and quote currency are the basic units of a trading pair. A quote currency is used to determine the value of the base currency.
For example, in the BNB/BTC trading pair, BNB is the base currency and BTC is the quote currency.
7. ​​What does the order state represent?
  • New: When the grid is created but not triggered.
  • Working: After the grid is triggered.
  • Expired: Grid trading strategy terminated.
  • Canceled: The user manually ended the grid strategy.
8. Why is my Gird Trading order terminated after I canceled all spot trading open orders?
All Grid Trading orders will be displayed under the [Open Order] tab on the Spot Trading interface. If you cancel an order that belongs to your Grid Trading strategy, the strategy will also be terminated.
If you switch to the trading pair that is currently running Grid Trading, you will see a notification on the right of the screen, please check carefully before you cancel open orders.
9. Why can’t I place a dual crypto grid strategy?
You may encounter an error message prompting you to invest in one crypto only.
This error occurs when the second-highest-priced grid is below the current market price of the trading pair. Please adjust the upper price further from the current market price in order to place a dual crypto spot grid strategy successfully.
Example:
BNBBUSD spot grid arithmetic strategy, upper limit: 600 BUSD, lower limit: 100 BUSD, grid quantity: 5.
The 5 grid price points would be 600, 500, 400, 300, 200, 100 BUSD.
Current market price: 520 BUSD
The second-highest grid price (500 BUSD) is below the current market price (520 BUSD). In this scenario you will not be able to place a dual crypto investment strategy.

However, if you increase your upper limit to 700 BUSD, this strategy’s grid price points would be 700, 580, 460, 340, 220, 100 BUSD. The second-highest grid price (580 BUSD) will now be higher than the current market price (520 BUSD), you will then be able to place a dual crypto investment strategy.
10. Why can’t I sell my base coin?
​​When terminating the grid, the system will assess both the market liquidity and the amount of base coin you hold. If you hold an excessively large amount of base coin or the market liquidity is poor, the system will protect your assets and may not sell your base coin.
If the amount of base coins intended for sale exceeds or equals to N times the maximum market order amount (where N is currently set to 0.9, subject to adjustments based on market liquidity), the system will refrain from selling your base coin at market price and your assets will be returned to your Spot Wallet.
For more details on the maximum market order amount, please refer to Trading Rules.

Glossary

Order

  • Lower Price: Bottom of the grid trading price range. The system will no longer execute orders after 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 after the market price is higher than the Upper Price.
  • Grids: Divide the interval upper limit price and interval lower limit price into corresponding shares.
  • Arithmetic/Geometric Mode:
    • The price difference of each grid of Arithmetic is: Spread = (Upper Price - Lower Price) / Number of grids
    • The price ratio of each grid of Geometric is: Ratio = (Upper Price / Lower Price) ^ (1/n)*100%; n= the number of grids

Profit

  • Total Profit: Grid Profit + Unrealized P&L
  • Grid Profit: The realized profit of filled grid orders that are matched by one buy-order and one sell-order. The trading fees incurred during the strategy are already deducted in the Grid Profit.
  • Float Profit: The latest price of the base currency in the current trading pair is the base currency's average buy price. This is the floating profit/loss of the grid trade caused by the rise or fall in the market price of the base currency.