Grid trading common sense (1)

1. How does grid arbitrage? What is the difference from contracts?

①The robot is a quantitative tool that is friends with time. The longer it runs, the more profitable it will be. When the price moves within the range we have defined, the robot automatically sells every time it reaches the top of the small range, and the robot automatically buys at the bottom of the range, completing buying and selling operations again and again in constant shocks. Even if the price remains unchanged, you can still make steady profits like a cash machine.

②High-density contracts are not trading but gambling. The essence is to guess the rise and fall, and returning to zero is the result. When pin insertion or violent shocks occur, high-density contracts are liquidated and the grid arbitrages wildly. In essence, quantification is cutting contracts with the exchange.

2. What kind of people is the grid suitable for?

It is more suitable for people who have more funds and pursue safety. The more funds you have, the lower the leverage should be. 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 yield depend on?

One is matching profit, and the other part is take-profit profit. Both depend on the following three factors:

①Purchase cost of currency

②The shock efficiency of currencies

③Trading volume of the entire market

4. What market situation is the grid suitable for? Is there any risk of liquidating the position to zero?

① Due to the characteristics of the loss direction of the grid, the greater the loss, coupled with the characteristics of no upper limit for shorting and a lower limit for long, the neutral grid has two directions of huge losses. In summary, it is mainly recommended to go to the long grid.

② Suitable for shocks and unilateral rising markets, but not suitable for unilateral falling bear markets.

③The higher the grid, the safer the transaction. Each arbitrage will be added to the margin. We do not rely on guessing the direction. If you guess the right direction, you will earn two profits: take profit and matching. If you guess the wrong direction, you can earn back the money lost through matching.

④If and only if a black swan event occurs (the whole market drops by 50% or more) just a few days after the grid starts running, in other cases, even if there is a big drop, losses can be turned into profits through pairing.

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