Definition

Grid Trading is a strategy that places buy and sell orders at predefined price intervals within a set range. The goal is to capture gains from normal market fluctuations when prices move up and down within a sideways or ranging market.

The strategy does not attempt to predict long-term direction but instead seeks to capitalize on repeated price oscillations.

Example in Context

A trader sets a grid between $30,000 and $35,000 for Bitcoin, placing buy orders every $500 below market price and sell orders every $500 above. As price moves within the range, trades are executed automatically at those intervals.

FAQs

Is grid trading suitable for trending markets?

Grid strategies are generally designed for ranging markets and may perform differently during strong directional trends.

Does grid trading eliminate risk?

No. Market breakouts beyond the grid range may result in losses.

Can grid trading be automated?

Yes. Many platforms allow grid parameters to be configured and executed automatically.

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