Understanding Grid Trading with Fokawa

Grid Trading Overview

Grid trading is a quantitative trading strategy automated for spot and leveraged token (ETF) markets. It involves placing buy and sell orders at predefined intervals within a set price range, creating a grid of orders above and below a chosen price point.

This strategy is particularly effective in volatile markets where prices fluctuate within a specific range. By capitalizing on small price changes, grid trading helps you trade systematically and minimize emotional decision-making.

Risk Warning

Grid trading is designed for volatile markets, but it carries certain risks:

• Uptrend Risks: In a strong uptrend, the strategy may execute sell orders, leading to potential losses if the price continues to rise beyond the set range.
• Downtrend Risks: In a sharp downtrend, the strategy may place buy orders, resulting in losses if the price falls below the set range.

Important Reminders

• Starting Grid with USDT: The system will use 50% of your USDT investment to purchase BTC at market price before activating the grid strategy.
• Stop Loss (SL): When the market price hits the Stop Loss price, the grid will cease operation, cancel all orders, and sell any remaining BTC at market price.
• Manual Closure: To manually close the grid trading, all orders will be canceled, and remaining BTC positions will not be sold.

Getting Started with Grid Trading

1. Select Spot Trading: Choose BTC/USDT and click on Grid to begin.

AI Policy

• AI Recommendations: The system will suggest optimal grid bot parameters based on the past seven days of market data.
• First-Time Users: For beginners, using the AI strategy is recommended. Simply decide your investment amount to set up the grid trading bot.

Custom Policy

• Parameter Settings:
• Lower Price: Minimum price for grid trading. No orders will be placed if the market price falls below this level.
• Upper Price: Maximum price for grid trading. No orders will be placed if the market price exceeds this level.
• Number of Grids: Determines the number of price intervals. More grids result in smaller profits per grid.

• Arithmetic & Geometric Modes:
• Arithmetic Mode: Equal price difference between grids (e.g., 1, 2, 3, 4…).
• Geometric Mode: Equal price ratio between grids (e.g., 1, 2, 4, 8…). Profits are proportional between each grid.

Advanced Settings

• Take Profit and Stop Loss (TP and SL):
• Stop Loss (SL): Grid trading will stop and liquidate positions at market price when the SL price is reached. SL should be lower than the set range.
• Take Profit (TP): Grid trading will stop when the TP price is reached, and positions will be liquidated. TP should be higher than the set range.

• Invested Coin:
• BTC Only: Uses BTC from your Spot Wallet.
• BTC + USDT: Uses both BTC and USDT from your Spot Wallet.

Viewing Grid Transactions

• Select Grid Status: Choose either Processing or Completed.
• Click Details: View overall grid status, pending orders, and completed transactions.

Understanding Grid Profit

• Grid Profit: Profit from completed grid orders, with trading fees already deducted.
• Annualized Yield: Calculated as [(grid profit/investment) / (Lasting time/365)] * 100%.
• Position Gain and Loss (USDT): Difference between the latest price and the opening price, reflecting floating profit/loss.

Start Your Grid Trading with Fokawa Today!

Updated on: 23/07/2024