Spot Grid Trading——The Best Trading Strategy for the Bear Market

Introduction to Spot Grid Trading

Grid trading is a trading strategy (quantitative trading strategy) that automatically executes "sell at high price, buy at low price". Currently, MEXC supports grid trading of cryptocurrency spots.

Arbitrageurs who use grid trading to automatically buy at low prices and sell at high prices to profit from market swings can select the lowest and maximum price, grid quantity, and investment amount within a predetermined base price.

The advantages of grid trading are:

1. It is an automatically-executed trading strategy. Users do not need to keep track of the orders and can avoid repeated works.
2. It helps reduce greed, fear, chance and other weaknesses in humanity and seizes the best opportunities for users to benefit.
3. In choppy markets, it works wonders. The market makes more money the more turbulent it is.

Grid trading is typically used by individual traders as well as specialized quantitative institutions that benefit from small price intervals. This is a very suitable trading strategy for the current bearish and volatile market.

A Guide to the Operation of Grid Trading

The main principles on how to select the benchmarked asset for grid trading:

• Select the digital currencies that the exchange supports: Different cryptocurrencies are supported by various exchanges. 60 cryptocurrencies, including BTC, ETH, XRP, DOT, and others, are presently supported by MEXC for grid trading.
• Grid trading is typically used by individual traders as well as specialized quantitative institutions that benefit from small price intervals. This is a very suitable trading strategy for the current bearish and volatile market.
• Select a currency with higher volatility: The grid trading's ROR is based on the asset's volatility. The probability of carrying out purchase and sell orders increases with volatility. The profit grows as you sell more. You can therefore select DOT, SOL, AVAX, MATIC, CRO, ATOM, DOGE, FIL and other cryptocurrencies with a low market capitalization in addition to BTC and ETH. More than 2,400 cryptocurrencies can already be traded on MEXC, and other coins will be added to the grid trading later.

Create your core holdings

You need to create your core holdings for grid trading. The size of your core holdings is determined by the project valuation. If the current valuation of the project is low, the core holdings can be slightly increased, and if the valuation is high, you can liquidate some of the core holdings.

Set the grid size

Take BTC Spot grid trading as an example. Assuming the current BTC price is 30,000 USDT, you can set the minimum price to 20,000 USDT, the maximum price to 40,000 USDT and the number of grids to 5.

Hence the price interval is (40000-20000)/5=4000. The orders that can be set according to the intervals are 40000, 36000, 32000, 28000, 24000, 20000. Here is how you can place the orders:

Place a buy order at 20000U, a sell order at 24000USDT, a buy order at 24000USDT, and a sell order at 28000USDT; and so on until a buy order at 36000USDT, and a sell order at 40000 USDT.