DOGEUSDT
Future grid settings
29$ to 821.11$ gaining in binance only 3days.
To assess whether this grid trading strategy is suitable and calculate its profitability, we need to break down the given parameters and analyze them step-by-step:
Given Data:
Pair: DOGE/USDT
Leverage: 10x
PNL (Profit and Loss): $821.11
ROI (Return on Investment): 19.12%
Run Time: 2 days 17 hours 6 minutes
Price Range: $0.374720 to $0.398270
Minimum Amount: $29
Number of Grids: 25
Grid Type: Geometric
Fee: 0.20%
Analysis:
1. Profitability (PNL & ROI Calculation):
Initial Investment (I): ROI is given as 19.96%. To find the initial investment
Leverage Effect: With 10x leverage, the actual amount you controlled in the market was approximately:
2. Grid Trading Analysis:
Price Range: $0.374720 to $0.398270 gives a total range of $0.02355.
Number of Grids: 25 grids mean each grid step (geometrically) covers a smaller portion of this range.
Geometric Distribution: This means that the space between each grid increases exponentially rather than linearly.
3. Suitability of Grid Setup:
Price Volatility: The chosen price range is quite narrow. For a 10x leverage, small price movements can lead to significant profits or losses.
Grid Spacing: With 25 grids in a narrow range, this setup works well if the price fluctuates frequently within this range. A geometric grid is more aggressive at capturing larger price movements and might miss small fluctuations.
Fee Impact: With a 0.20% fee per transaction, frequent trades could eat into the profits. The strategy's profitability heavily depends on the number of trades executed and the size of each trade.
4. Profitability Post-Run Time:
The realized PNL is $8321.11 The profit after deducting fees would be:
Average trade amount=0.374720+0.398270/2=0.386495
No. Of trade 25*2=50-2=48(buy and sell 2 trade ,one remove initial buy ,and one remove last sell)
{Total Fee} = {Number of Trades}multiply {Average Trade Amount} multiply{Fee Percentage}
Total fee=48*0.386495*0.20=3.71$
Gaining =821.11-3.71=817.40
Recommendation:
Suitability: The grid is suitable for capturing profits in a highly volatile market with the given leverage and price range. However, the narrow price range and geometric grid may miss small fluctuations.
Improvements:
Wider Price Range: Consider widening the range if you expect larger fluctuations.
Linear Grid: If you want to capture smaller, more frequent price movements, a linear grid might be more appropriate.
Fee Management: Be mindful of the number of trades and their sizes to ensure fees do not significantly reduce profitability.
To estimate future profitability:
Monitor market conditions for expected volatility.
Adjust the grid range and spacing based on past performance and future expectations.
Use stop-losses to manage risk, especially with high leverage.
