What Is Spot Grid Trading and How Does It Work? | Binance Spot Grid Trading,What is Grid Trading,Binance Trading Bot,Crypto grid trading

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Grid trading is a type of strategic tool utilizing advanced orders to automate trading. This trading bot automates the buying and selling on spot trading. It is designed to place orders in the market at preset intervals within a configured price range.

In grid trading, 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 from small price changes. Through quantitative trading, it can help you maximize trading opportunities.

Disclaimer: Digital asset prices are subject to high market risk and price volatility. The value of your investment may go down or up, and you may not get back the amount invested. Trading Bots will consistently execute all orders as soon as the specified intervals are reached. Execution may even apply in situations of a rapid collapse or strong rise of a digital asset. Past performance is not a reliable indicator of future performance. You are solely responsible for your investment decisions and Binance is not liable for any losses you may incur. You should only invest in products you are familiar with and where you understand the risks. You should carefully consider your investment experience, financial situation, investment objectives and risk tolerance and consult an independent financial adviser prior to making any investment. This material should not be construed as financial advice. For more information, see our Terms of Use and Risk Warning.

1. How to access Spot grid trading on Binance?

If you are using the Binance app, tap [Trade] and select [Bots] - [Spot Grid].

Note: Spot grid trading uses a Trading Bots Account that is separate from your Spot Account. Therefore, you will need to use a Trading Bots Account to create new grid trading strategies. For more details, please refer to Trading Bots Account: Migration Rules and Frequently Asked Questions.

2. How to set up a Spot grid trading strategy?

You can create your own grid trading strategy by clicking [Spot Grid], or copy an existing grid strategy’s parameters from [Bot Marketplace].

For more details, please refer to How to Create a Spot Grid Trading Strategy on Binance?

If you’re creating your own grid trading strategy, you’ll be redirected to the Spot grid trading interface. Here, you can choose the [AI], [Popular], or [Manual] mode to start.

Using AI parameters

1. Click on the [AI] tab, and our system will automatically generate parameters based on the technical analysis of the symbol's price and the selected time period. You can also click [Copy Parameters to Manual Settings] if you would like to adjust the parameters.

Using Popular parameters

1. Click on the [Popular] tab and you’ll see the recommended parameters generated based on the criteria you’ve selected. You can also click [Copy] to create your own strategy.

Enter the investment amount under [Investment] and click [Create].

2. Check the order details and click [Confirm]. The system will automatically place buy or sell orders at preset prices.

Please note that the recommended parameters are set in Arithmetic mode by default, and the [Sell All Base Coins on Stop] is enabled by default.

Setting Manual parameters

1. There are three ways of setting Manual parameters: You can copy the parameters from the [AI] or [Popular] tabs and modify them for your own grid strategy, or you can enter your preferred parameters manually using the [Manual] tab.

2. Alternatively, click the [Manual] tab. Select either the [Arithmetic] or [Geometric] mode, and enter the parameters for your grid strategy. Then click [Create].

3. Check the grid order details, then click [Confirm].

4. You can view your active grid strategies under [Running] on the trading page.

If you’re using the Binance app, tap [Wallets] - [Trading Bots] - [Running Bots] to view the active strategies.

Please ensure you fully understand each of the parameters before creating a strategy.

For more details on each advanced setting, please see the following section.

3. 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

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

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: This is the bottom of the grid trading price range. The system will no longer execute orders when the market price falls below the Lower Price.

Upper Price: This is the top of the grid trading price range. The system will no longer execute orders when the market price exceeds the Upper Price.

3. Number of grids

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

4. Investment

You can choose to invest in single or dual cryptocurrencies.

For example, if you choose to invest in 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 conditions and may not equal the amount you initially entered.

5. Available amount

This refers to the available assets in your Spot Wallet.

Your grid creation might fail if there is insufficient balance in your Spot Wallet. Please note that 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.

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.

7. Stop Trigger (Optional)

You can use Stop Trigger to stop trading when the market price triggers the set prices:

Stop Loss: This 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: This 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.

8. Sell All Base Coins on Stop

When 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. If 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. If you wish to keep all base coins in your Spot Wallet after the strategy ends, please disable the [Sell All Base Coins on Stop] function.

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 these rules when placing orders. For more details, please refer to Trading Rules.

4. 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.

Alternatively, tap [All Orders] - [Running] on the Binance app.

2. You will be redirected to the order details page.

You can check the order details by selecting [Working]:

PnL: Details of your grid profit or loss
Open Orders: Grid pending orders
History: Grid trade details
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.

For more details about Grid Details parameters, please refer to Binance Spot Grid Trading Parameters.

5. Grid trading strategy example

You can use Grid trading strategy to buy low and sell high. Let’s use BTC/USDC as an example. Suppose your strategy parameters are set as below:

Upper price: 60,000 USDC
Lower price: 40,000 USDC
Number of grids: 5
Mode: Arithmetic
Amount invested: 10,000 USDC
Current price of BTC/USDC: 50,000 USDC

The price levels of this strategy are set at 60,000 USDC, 56,000 USDC, 52,000 USDC, 48,000 USDC, 44,000 USDC, and 40,000 USDC.

Binance Spot grid trading places orders from the top grid to the bottom. When a buy order is filled, a sell order is placed at the next grid level above. Here’s how it works:

1. Start: The upper price is set at 60,000 USDC, so the grid strategy begins by placing a buy order at 56,000 USDC.

2. Execution: Since the current price is 50,000 USDC, the 56,000 USDC buy order is likely filled immediately.

3. Next Order: Once the 56,000 USDC buy order is filled, a new sell order will be placed at 60,000 USDC. If the buy order is then placed at 52,000 USDC and gets filled, a sell order at 56,000 USDC will be placed accordingly.

4. Unfilled Orders: If the price is above 48,000 USDC, the buy orders at 48,000 USDCD, 44,000 USDC, and 40,000 USDC will not be filled.

Grid trading calculates the amount of base currency needed for placing orders and paying transaction fees. It will then automatically place market orders to buy the required base currency. When the grid strategy is successfully activated, the order placement will be as follows:

Price (USDC)	Order Type
60,000	Sell
56,000	Sell
52,000	No orders will be placed
48,000	Buy
44,000	Buy
40,000	Buy

After implementing Grid trading, when the current price drops to 48,000 USDC, the buy order will be filled, and a sell order will be placed at 52,000 USDC. When the market price rises to 52,000 USDC, the sell order will be filled, and a buy order will be placed again at 48,000 USDC to buy low and sell high.

If the BTC price rises above 60,000 USDC or falls below 40,000 USDC, the strategy will be suspended. When the price returns to the set price range, 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.

1. How many Spot grid strategies can I run at the same time?
Currently, you can create up to 20 running Spot grid bots, with each Spot grid bot supporting up to 170 individual grids. Additionally, you can simultaneously run up to 5 bots on the same pair.

2. Why is my Grid trading strategy terminated/canceled?

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.

3. Which wallet balance is utilized for Spot grid trading?

Currently, Spot grid trading utilizes assets in your Trading Bots Account to make investments, 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.

4. 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.

5. How are the trading fees calculated?

Spot Grid Trading follows the spot market trading fee rates. Please check the Spot Trading Fee Rate page for more details.

6. 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 will be moved to the Trading Bots Account. 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 return to 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 Reserved Fee Order details under the [History] tab on the Grid Trading order details page.

7. 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.

8. 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.

9. Why is my grid trading order terminated after I canceled all Spot trading open orders?

All grid trading orders will be displayed under the [Open Orders] 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.

10. Why can’t I place a dual crypto grid strategy?

You may encounter an error message prompting you to invest in one crypto only.

Error Message: “The parameters entered cannot use BTC. Investments must be USDC only. Adjust to USDC.”
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.

Example:
USDC Spot grid arithmetic strategy;

Upper limit: 600 USDC;

Lower limit: 100 USDC;

Grid quantity: 5
The 5 grid price points would be 600, 500, 400, 300, 200, and 100 USDC.
Current market price: 520 USDC
The second-highest grid price (500 USDC) is below the current market price (520 USDC). In this scenario you will not be able to place a dual crypto investment strategy.

However, if you increase your upper limit to 700 USDC, this strategy’s grid price points would be 700, 580, 460, 340, 220, 100 USDC. The second-highest grid price (580 USDC) will now be higher than the current market price (520 USDC), you will then be able to place a dual crypto investment strategy.

11. Why can’t I sell my base coins?

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.