Grid Trading
Grid Trading Strategy
Strategy placing staggered buy and sell orders across a range
Definition
Grid trading places staggered buy and sell orders across a chosen price range. Filled orders are typically replaced at an adjacent level to monetize back-and-forth moves; a persistent trend accumulates inventory or sells away upside instead of guaranteeing profit.
Example
Buy 0.1 ETH at $1,950 and sell it at the next grid level, $2,000: the completed cycle earns $5 gross. With hypothetical 0.1% fees on both legs, $0.395 is paid and $4.605 remains before gas.
How it works
The strategy divides a range into price levels and allocates cash and tokens to orders. A fill usually triggers an opposite order one step away; profit on completed cycles must be measured alongside unsold inventory losses.
Risks to Consider
- A downtrend accumulates a falling asset
- A breakout can leave the grid out of inventory or fully exposed
- Fees and gas can exceed small grid spreads
Common Questions
Is grid trading the same as DCA?
No. DCA buys a fixed amount on a schedule. A grid responds to price levels and uses both buys and sells; it depends on the market revisiting those levels.