1. How does grid arbitrage work and what is the difference between it and contracts?
① The robot is a quantitative tool that makes friends with time. The longer it runs, the more profitable it is. When the price runs within the range we define, the robot automatically sells at the top of the small range and buys at the bottom of the range, completing the buying and selling operations again and again in the constant oscillation. Even if the price does not change, you can still get steady profits like an ATM.
② High-multiple contracts are not transactions but gambling. The essence is to guess the rise and fall, and the result is zero. When there is a spike or violent shock, the high-multiple contract is forced to close and the grid is crazy arbitrage. In essence, quantitative is cutting the leeks of the contract together with the exchange.
2.What kind of people are suitable for the grid?
It is more suitable for people who have more funds and pursue security. The more funds you have, the lower the leverage should be set. Put the safety of funds first, as long as the principal can be earned back sooner or later with compound interest.
3. What does the size of the grid’s rate of return depend on?
One is the matching profit, and the other is the stop-profit profit. Both depend on the following three factors:
①Cost of purchasing currency
② Currency volatility efficiency
③Trading volume of the entire market
4. What market conditions are suitable for Grid? Is there any risk of liquidation?
① Due to the characteristic of the grid that the more you lose, the more you lose, and the fact that there is no upper limit for short selling and a lower limit for long selling, the neutral grid has two directions of huge losses. In summary, the long grid is recommended.
② Suitable for volatile and unilateral rising markets, but not suitable for unilateral falling bear markets.
③ The more grid transactions are made, the safer it will be. Each arbitrage will be added to the margin. We do not rely on guessing the direction. If we guess the direction correctly, we will earn two profits, namely, take-profit and matching. If we guess the wrong direction, we can earn back the losses from the decline through matching.
④ If and only if a black swan event occurs within the first few days of the grid’s operation (the entire market falls by 50% or more), in other cases, even if there is a sharp drop, the pairing can turn losses into profits.
5.What are the advantages of grid over contract?
① Stable compound interest, 1.01 to the power of 365 is an annualized return of 3778%, and 1.02 to the power of 365 is 133740%. Only when the lower limit of the range is broken, it is necessary to adjust the position. Only in this case is it possible to lose money (the matching profit before falling to the lower limit of the range is not enough to turn the loss around). The probability of such a loss event is less than 5%, and stable compound interest can be achieved in other cases.
② The contract needs to be monitored, and the robot only needs to set the trigger, take profit, and stop loss to let it quietly act as an ATM and free up your life.
③The contract requires "people" to operate. As long as human factors are involved, it cannot be guaranteed to be rational and strictly executed at all times. Trading itself is an anti-human behavior. Profits and losses will make you excessive, and robots will absolutely strictly execute every operation.
6. What to do if you are afraid of black swans?
① Never fill up your warehouse
② Keep chips for a comeback: every time you make money, set aside 30% of the profit and transfer it to spot. You should not all in this money no matter what.
③Two truths: There are always better chips, and as long as the capital is there, there is a chance to turn things around.
④ I will never recommend you to go short, but I will occasionally introduce some good targets for risk lovers. When you go short, you must take my stop loss into account.
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