What is a contract grid?
Contract Grid is an automated trading strategy based on quantitative rules, specifically designed for high-frequency and low-profit arbitrage operations in the Future Market. Its core principle is to automatically place buy and sell orders based on price fluctuations within a preset price range, buy low and sell high, and repeatedly profit.
The contract grid robot will automatically place buy and sell orders in the market within the price range you set, based on the number of grids and strategy type set. When the price reaches a certain order range, the robot will automatically execute the order.
The system will place orders at the positions where prices gradually increase and decrease according to the set grid rules, forming a hierarchical trading grid.
For example, users can set an interval every 1,000 USDT to place a BTC buy order at a price lower than the market price and a BTC sell order at a price higher than the market price.
The contract grid strategy performs best in volatile or sideways markets. When the market fluctuates within a set price range, the robot can frequently capture opportunities to buy low and sell high, profiting from each small fluctuation.
The more grids there are: the higher the transaction frequency, the smaller the profit per transaction.
The fewer the number of grids: the lower the transaction frequency, but the higher the profit per transaction.
The advantages of grid trading
Automated execution, avoiding emotional interference
By automatically executing the buying and selling process of contracts, traders can efficiently execute trading strategies and avoid irrational operations caused by mood swings.
Systematic position building and price grid construction
Within the set price range, the system will automatically place multiple limit orders to form an orderly price grid structure, making strategy execution more disciplined and controllable.
Capture arbitrage opportunities in small fluctuations
By placing orders at set intervals, robots can capture subtle price differences during market fluctuations, achieve high-frequency and low-profit trading, and accumulate small amounts.
How the grid works
Grid trading now supports U-based perpetual contracts.
Users can flexibly set grid parameters, including upper and lower limits of price ranges, number of grids, etc. After creating a strategy, the system will automatically execute limit buy and sell orders based on preset prices to achieve automated trading.
Let's learn about the operation principle of grid trading below.
Assuming you predict that BTC will fluctuate between 75,000 USDT and 85,000 USDT in the next 24 hours, you can set up a grid trading strategy based on this judgment, continuously buying low and selling high within the specified price range, and profit from the volatile market.
On the grid trading panel, you can set the following grid strategy parameters:
Price range upper and lower limits (lowest and highest prices) 75,000-85,000
Number of grids (i.e. how many pending orders are divided within this interval) 10
The spread of each limit order (i.e. grid spacing) is 1000.
After setting up, the robot will automatically run according to your configuration without manual intervention, helping you seize every opportunity of price fluctuations.
In this case, assuming the current price is 82888, when the BTC price drops close to 82,000 USDT, the grid trading robot will automatically place a buy order at a preset price lower than the current market price during the price decline, gradually accumulating positioning.
As the price rebounds upwards, the robot will automatically place sell orders at positions higher than the current market price and complete transactions one by one, achieving profit-taking at each level.
The core of this strategy is to capture the repeated fluctuations of prices, achieve buying low and selling high, and continuously earn price difference profits from the pullback.
How to create a grid
APP: Click on the homepage [More] - [Contract Grid] - [Create Now], or click on the contract trading page [Create Grid] to jump to the grid creation page
Web: Coin pairs that support grid trading will display grids, switch to grids to create
Select the currency pair to create the grid and set the grid parameters. Select the grid trading direction (long or short), price range, number of grids, and investment amount. Then, click "Create" to confirm.
Mesh creation parameter description
1. Price range
When creating a contract grid strategy, you need to set price upper and lower limits to limit the range of robot operation.
When the market price exceeds the range you set (above the upper limit or below the lower limit), the grid strategy will stop opening positions.
This mechanism helps to prevent robots from continuing to execute trades in unexpected market conditions, thereby controlling risks.
Assuming the current market price of the BTCUSDT perpetual contract is 48,000 USDT, and you expect the price to start falling after exceeding 49,000 USDT. At this point, you can set the price ceiling to 49,000 USDT. When the BTC price rises to this upper limit, the robot will stop opening positions, only execute orders within the range, and will not continue to buy, thus avoiding the risk of chasing orders at high levels.
After creating the contract grid, if you want to modify the price range, you can click [More] > [Modify Price Range].
2. Arithmetic/proportional mode
* After the contract grid is created, it cannot be modified again
Arithmetic grid: The price difference of each grid is equal.
Grid spacing = (highest price - lowest price)/number of grids
Example:
Maximum price = 30,000
Lowest price = 20,000
N (number of grids) = 5
Grid spacing = (30,000 - 20,000) ÷ 5 = 2,000
Grid price: 20,000 → 22,000 → 24,000 → 26,000 → 28,000 → 30,000
Ratio grid: The price ratio of each grid is equal.
Grid Ratio = (Highest Price ÷ Lowest Price) ^ (1 ÷ number of grids)
Example:
Maximum price = 30,000
Lowest price = 20,000
N (number of grids) = 5
Grid ratio = (30,000 ÷ 20,000) ^ (1/5) ≈ 1.08447 (≈ 8.45% per grid)
Grid price: 20,000 → 21,690 → 23,520 → 25,500 → 27,645 → 30,000
3. Number of grids
Lower limit: 2
Upper limit: 200
Note: The spread in grid trading must not be less than the minimum moving price (minimum quote unit), and this limit may vary in different trading pairs.
If you encounter an error message of "grid spread is too small", please try adjusting it in the following ways:
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Reduce the number of grids
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Expand the price range (upper or lower limit).
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Increase the investment amount per transaction
Calculation method:
Arithmetic Grid: Spread = (Upper Grid Limit - Lower Grid Limit)/Number of Grid (Less than Minimum Variable Price)
Ratio grid: Lowest price difference = Grid lower limit * Price ratio (less than the minimum price change).
Price Ratio = (Upper Grid/Lower Grid) ^ (1/Number of Grid)
4. Estimated arbitrage profit (net of fees)
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Arithmetic Grid:
[ (Grid upper limit * (1-maker rate) - (Grid upper limit -1 level) price]/Grid (upper limit -1 level) price - Maker commission rate~
[ (Grid (lower limit + 1 level) price * (1-maker rate) - Grid lower limit price) ]/Grid lower limit - Maker commission rate
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Scale grid:
[Grid cap * (1-maker rate) - (Grid cap -1 level) Price]/Grid (cap -1 level) Price - Maker fee rate
When the grid yield is ≤ 0, the grid creation fails. You can optimize the parameters by adjusting the price range or the number of grids.
5. Single grid buying and selling volume
(Initial margin * 0.8)/average cost price/(1/leverage + taker rate) = total coins, total coins/grid quantity = coins per grid
6. Actual investment amount after leverage
Actual investment amount after leverage = margin * leverage
7. Minimum investment margin
Minimum Margin Investment = [ (Minimum number of trades (1) * Contract face value * Average cost price * Number of grids * (1/leverage + taker fee rate * 2)) ]/0.8
8. Estimated strong parity
Estimated strong parity when all buy or sell orders on the grid are executed
9. Take Profit and Stop Loss
After setting, when the latest price reaches the trigger price, the grid strategy stops, the system positions at the market price and returns the remaining assets to the contract account.
10. Trigger Price
After setting, start grid trading when the latest price reaches the trigger price.
How to view grid orders
1. After the grid is created successfully, the basic information of the current grid will be displayed on the transaction page. Click the icon on the right to jump to the grid homepage, where you can view the current grid and historical grids. Click the grid card to view the grid details. You can view the total assets of all current grids on the contract grid page.
2. Grid details include: profit details, strategy information, grid positions, grid orders, grid pairing history, and fund flow
Grid operation
1. Adjust the margin: You can increase or decrease the margin for the grid (to withdraw profits), and the adjustment of the margin will only affect the risk of the grid position.
2. Manually terminate the grid: Users can click the Terminate button to manually terminate the grid. After termination, the grid will position squaring positioning and cancel the pending order. After termination, all the money in the grid will be transferred back to the contract account.
3. More operations:
Modify price range: The price range and number of grids can be modified. After modifying this parameter, the positioning position of the old parameter will be squared and the order will be cancelled. Orders will be placed according to the new parameter. If the current grid account assets are lower than the minimum investment amount of the new parameter, additional investment is required. Modification will fail when the balance is insufficient.
Take Profit and Stop Loss: You can set a trigger price for take profit and stop loss, and the grid will terminate when the latest price reaches the take profit and stop loss price.
One-click copy: Copy the grid parameter to facilitate recreating the grid.
