Grid trading is an automated trading strategy used for futures contracts. Its goal is to place orders at set intervals within a specific price range. During trading, orders are placed both above and below the current market price, thereby creating a trading grid. This allows the trader to benefit even from small price fluctuations.

For example, a trader can set buy orders for BTC every 1,000 USDT below the market price and sell orders every 1,000 USDT above the current price. This approach helps to earn under different market conditions, especially when the market demonstrates volatility or is in a sideways trend.

Grid trading is ideal for trading in unstable or sideways markets where prices regularly fluctuate within a set range. The more orders in the grid, the more frequent the trades, but the profit from each trade decreases. Therefore, it is important to find a balance between the number of orders and the profitability per trade.

How does grid trading work on Binance?

Futures trading using grid trading for USDⓈ-M and COIN-M contracts is now available on the Binance platform. Users can set grid parameters by defining the upper and lower limits of the range, as well as the frequency of placing orders. Once the grid is set up, the system automatically places buy or sell orders at pre-defined prices.

For example, if you expect the price of Bitcoin to fluctuate between $50,000 and $60,000 in the next 24 hours, you can set up a trading grid within these limits. The bot will automatically accumulate positions when the price drops to the lower limit (e.g., to $55,000) and then sell when prices recover to the upper limit (e.g., to $60,000). This allows you to profit from price fluctuations.

Grid settings options on Binance:

  • Upper and lower limits of the price range.

  • The number of orders that will be placed within this range.

  • The width of the step between each limit order to buy and sell.

With this strategy, traders can try to profit from small price changes, making it particularly useful in volatile market conditions.

Risks and warnings

It is important to remember that grid trading on Binance is not financial or investment advice. You use this tool at your own risk. We recommend thoroughly reviewing the grid trading instructions to fully understand the mechanisms of the strategy, as well as carefully monitoring risks and considering your financial capabilities.

Learn more in the article Grid Trading in Long/Short Mode.