Grid Trading - Trading Glossary

Grid trading on AsterDEX automates your trading by placing multiple buy and sell orders at predetermined price levels, profiting from market volatility within a defined range.

How Grid Trading Works

Basic Grid Structure

• Upper bound: Highest price in your range
• Lower bound: Lowest price in your range
• Grid levels: Number of buy/sell orders between bounds
• Grid spacing: Price difference between each level

Example 5-level BTC Grid ($40,000 - $50,000):
Sell: $50,000 ← Upper bound
Sell: $47,500
Sell: $45,000 ← Current price  
Buy:  $42,500
Buy:  $40,000 ← Lower bound

AsterDEX Grid Trading Features

Auto Grid Strategy

• Set range: Choose upper and lower price bounds
• Configure levels: 5-200 grid levels supported
• Investment amount: Allocate capital to the grid
• Profit taking: Auto-compound or take profits

Manual Grid Setup

• Custom spacing: Uneven grid intervals
• Asymmetric grids: More buy or sell orders
• Advanced triggers: Time-based or indicator-based

Grid Trading Types

Arithmetic Grid

Equal dollar spacing between levels:

• Spacing: $100 between each level
• Best for: Lower volatility, stable ranges
• Example: $45,000, $45,100, $45,200, $45,300

Geometric Grid

Equal percentage spacing between levels:

• Spacing: 1% between each level
• Best for: Higher volatility, trending markets
• Example: $45,000, $45,450, $45,905, $46,364

Setting Up Effective Grids

Range Selection

Support and Resistance Analysis:

• Identify historical trading ranges
• Look for consolidation patterns
• Consider volatility expectations

Volatility-Based Ranges:

• Low volatility: 10-15% range
• Medium volatility: 15-25% range
• High volatility: 25-40% range

Grid Level Optimization

Grid Trading Profitability

Profit Sources

1. Spread capture: Buy low, sell high repeatedly
2. Volatility harvesting: More moves = more profits
3. Compound effect: Reinvesting grid profits

Profit Calculation

Grid Profit per Cycle = (Sell Price - Buy Price) × Quantity - Fees
Annual Return ≈ Grid Profit × Cycles per Year

Risk Management for Grid Trading

Position Sizing

• Conservative: 5-10% of portfolio per grid
• Moderate: 10-20% of portfolio per grid
• Aggressive: 20-30% of portfolio per grid

Stop Conditions

• Range breakdown: Price moves outside grid bounds
• Drawdown limits: Grid losses exceed predetermined threshold
• Time stops: Close grid after set duration regardless of performance

Advanced Grid Strategies

Multi-Timeframe Grids

• Short-term grid: 1-hour ranges for quick profits
• Medium-term grid: Daily ranges for trend capture
• Long-term grid: Weekly ranges for major moves

Asset Pair Grids

• Stable pairs: USDT/USDC for low-risk yield
• Major pairs: BTC/ETH for moderate volatility
• Alt pairs: High volatility for aggressive profits

Common Grid Trading Mistakes

1. Wrong market conditions: Using grids in strong trends
2. Inadequate range: Setting bounds too narrow
3. Overleveraging: Too much capital in single grid
4. Ignoring fees: Not accounting for transaction costs
5. No exit plan: Letting losing grids run indefinitely

Grid Trading on AsterDEX

Platform Features

• Real-time monitoring: Track grid performance
• Auto-rebalancing: Adjust to changing conditions
• Profit analytics: Detailed performance metrics
• Risk controls: Built-in position limits

Fee Considerations

• Maker fees: 0.02% for limit orders (grid orders)
• Minimum profit: Each grid cycle should exceed 0.04% to be profitable
• High-frequency impact: More levels = more fees

Grid Trading Checklist

Before starting a grid:

1. ✅ Analyze current market structure (ranging vs trending)
2. ✅ Identify clear support and resistance levels
3. ✅ Calculate expected volatility and optimal spacing
4. ✅ Set appropriate position size (max 20% of portfolio)
5. ✅ Define exit conditions (profit targets and stop losses)
6. ✅ Monitor performance and adjust as needed

Grid trading works best in ranging markets—avoid during strong directional moves.