Last updated: 7 Oct 2024
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What is grid trading?
Grid trading is a strategic tool used to automate buy and sell orders at preset intervals and price ranges. This feature is designed to help traders take advantage of small price fluctuations, particularly in volatile and sideways markets. You can customize and set grid parameters to define a range to profit from price volatility.
To help you build your own grid trading strategy, we provide recommended parameters in this article. These include the lower price limit, upper price limit, and grid count. Additionally, the AI and Popular parameters function simplifies the process, enabling the creation of a grid trading strategy with just one click.
How to use spot grid trading parameters?
Please note that you can only create 5 grid strategies for each trading pair. For other limitations, refer to What Is Spot Grid Trading and How Does It Work.
1. Log in to your Binance account and click [Trade] - [Trading Bots].
If you’re using the Binance App, tap [Trade] and select [Bots] - [Spot Grid].
2. You can create your own grid trading strategy by clicking [Trade Now], 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.
3. 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 Coin at Stop is enabled by default.
Users should understand, acknowledge, and accept the risks associated. Click on the checkbox, and then click [Confirm] to place the Spot Grid Order.
Setting manual parameters
1. There are three ways to set manual parameters. You can copy the parameters from the [AI] or the [Popular] tab, and modify them for your own grid strategy.
2. Alternatively, click on 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 [Wallet], select [Trading Bots], and tap [Running Bots] to view the active strategies.
How are AI parameters calculated?
To calculate the AI parameters, use the following steps:
Step 1: Calculate Upper Band (UB) and Lower Band (LB).
Use 1D interval Kline data:
UB = Moving Average (MA) + Bollinger Bands (BBM) * Standard Deviation
LB = MA - BBM * Standard Deviation
Note:
- BBM is set to 3;
- MA and Standard Deviation periods selection are:
- For 7 days: Use 1 day candlesticks for the past 7 periods;
- For 30 days: Use 1 day candlesticks for the past 30 periods;
- For 180 days: Use 1 day candlesticks for the past 180 periods;
Step 2: According to whether UB, LB is in the reasonable range, calculate the final grid upper limit and grid lower limit.
If min_range < (UB / average price - 1) <= Max_range, grid_upper_limit = (1 + DR) * UB,
Else grid_upper_limit = average price * (1 + default range)
If min_range < (1 - LB / average price) <= Max_range, grid_lower_limit = (1 + DR) * LB,
Else grid_lower_limit = average price * (1 - default range)
Note:
- Min range = 1% * power(n, 1/3)
- For 7 days: Min range = 1% * power(7, 1/3)
- For 30 days: Min range = 1% * power(30, 1/3)
- For 180 days: Min range = 1% * power(180, 1/3)
- Max range = 15% * power(n, 1/3)
- For 7 days: Min range = 15% * power(7, 1/3)
- For 30 days: Min range = 15% * power(30, 1/3)
- For 180 days: Min range = 15% * power(180, 1/3)
- Default range = 5% * power(n, 1/3)
- For 7 days: Min range = 5% * power(7, 1/3)
- For 30 days: Min range = 5% * power(30, 1/3)
- For 180 days: Min range = 5% * power(180, 1/3)
- Average price = (Open + Close + High + Low)/4
- Using 1 hour interval Kline
- DR = (average price - MA) / MA
- MA is calculated in Step 1
Risk Warning: Grid trading as a strategic trading tool should not be regarded as financial or investment advice from Binance. Grid trading is 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 the feature. It is recommended that you should read and fully understand the Grid Trading Tutorial and make risk control and rational trading within your financial ability. For a complete strategy trading disclaimer, please refer to Binance Trading Bots Terms.