Gate.io Copy Trading Special: Learn To Use The Contract Grid And Trade Without Fear Of Bulls & Bears

This article will focus on the concept of contract grid trading, comparing and analyzing the spot grid and contract, to help you better understand the product characteristics, advantages and disadvantages and best application scenarios of the contract grid. Also, it details how to set the parameters, and share a practical methodology "Trend Grid Trading". The whole article is not only suitable for a novice, but also provides some inspiration for senior traders, from which, I believe, you will gain something after reading it.
1. The concept and principle of Contract Grid
2. The comparative analysis of the Contract grid, the Spot Grid and the Contract
3. The parameter settings of the Contract Grid
4. The trading method of Trend Grid
First, the concept and principles of contract grid trading

1. What is the Contract Grid?

Contract Grid implies the action where one can apply the strategies of Grid Trading to Contract Trading. Choose a direction of short selling or long buying. If you go long, according to the price range set by the grid, the number of grids and other parameters, you can buy more when the price falls, and sell more when the price rises. Therefore you can obtain deterministic grid profits by a high throw bargain - hunting. In the same way, if you go short, you will also open the short at the high price and close the short at the low price.
The image above shows how the contract grid runs when it is long.

2. The comparative analysis of the Contract Grid, Spot Grid and the Contract

(1) Contract Grid VS Spot Grid

It can be seen that the Contract Grid overcomes the problem that the Spot Grid does not support. By short selling, it provides a low capital utilization. This way, the Contract Grid can shine in the bear market.

2) Contract Grid VS The Contract

3) What Contract Trading problems has Contract Grid managed to overcome?
First of all, we must recognize that there is no right or wrong in this tool. And we are unable to simply compare the tools. It all depends on whether the user's risk tolerance matches the risk attributes of the tool. In addition to high risks and high returns, the characteristics of the contract grid include:

(1) Passive position management

A. Initial position: The initial position may only be about 50%, overcoming the vice of going all in for a full position

B. Increase the position at a low price

C. Reduce the position at a high price and take profit in batches

(2) Become more rational and peaceful towards holding

A. Pullback and increase positions to help you lock in swing profits

B. When the trend continues, it just helps you bag trend profit, which enables you to own both swing profit and trend profit.

C. The Contract Grid has a higher fault tolerance rate than the Contract in the wrong direction. In one word, it is less likely to blow up under the same conditions

(3) Forced to remove leverage
The leverage multiple of Gate. io Contract Grid can be adjusted from 1 to 10 times, which can, under the condition of controllable risk, achieve considerable returns.

3. The parameter settings of the Contract Grid
1). Select the appropriate trading target
A. The top 10 trading targets of CMC market capitalization are preferred, and BTC, ETH, LTC, BCH and other large market capitalization currencies are preferred.

B. Choose the U standard or currency standard. It is recommended that the U standard is chosen in the bear market, and currency standard is chosen in the bull market.
2). Select the direction of opening a position
According to the comprehensive judgment of the market, choose to open a position in the direction of long or short. This step is very important, which determines whether the Contract Grid can earn or not. I will make a special introduction to my practical method - Trend Grid Trading later.

3. Set the price range

For information on how to set the price range, you can refer to the method of the previous article, click to read: Gate.io Copy Trading Special Column: Spot Grid with Annualized Returns of 1203%. Go pro!

A. Directly find the upper and lower intervals of the boll.
B. Draw the trend line
C. According to experience, on the basis of the current price, set a price of up and down 5000 USDT.

4. Distinguish between equal ratio and equal difference grids, and set the number of grids.

5. Select the “ invested funds”, “automatically calculate the leverage”, set the ‘trigger and stop loss”

A. Total investment amount: pull the slider and choose invested funds

B. Leverage multiple: the system automatically calculates the maximum leverage that can be used according to the minimum and maximum price entered

C. Strategy - trigger price: when the latest market price is less than or equal to the trigger price, the grid will start to run; the trigger price must be less than the latest price, and should be between the lowest price and the highest price in the grid range (buy long)

D. Automatic stop loss ratio: when the difference between the average price of the position and the marked price falls below the automatic stop loss ratio, the stop loss will be triggered, the market price closed, and the strategy terminated. Finally, choose to create your strategy!

6. Check the situation of strategy operation
A. Click "Running Strategy", find the opening trading pair, and check the situation of the strategy operation

B. Total return = signal income + floating profit and loss

C. Detailed data of the current position, parameter configuration and market situation can be seen

D. The strategy can be cloned and copied or terminated at any time

4.The trading method of Trend Grid

1) What is the starting point of the strategy?

(1) Grid trading will also lose money. What is the reason?

A. The Spot Grid takes over at a high level and there is a unilateral decline in the market.

B. The contract grid is not opened in the right direction. The floating loss happened.

C. In the oscillating market, the time of position holding is too short. Holders are not rational and stop the grid in advance before the profit position.

D. The grid parameters are set improperly, with the price spacing too small, the grid too dense, and the profit worn by the cost.

2. Is there any solution?
We know that the result of the transaction = F (winning rate, profit/loss ratio, number of positions opened). In short, trading results are influenced by winning ratio, profit/loss ratio and number of trades.

A. Improve the accuracy of direction selection and improve the winning rate

B. Position management: reasonable allocation of positions

C. Set the appropriate parameters: the parameter setting determines the speed at which the grid makes money

2) What is the logic of the strategy?

(1) What is the trading method of Trend Grid?

In Contract Grid trading, find direction in a larger period, use simple and reliable technical indicators to track the big trend, and gain big profits. At the same time, the characteristics of the Contract Grid are used to generate swing profits in the volatile market, offsetting the oscillating and wearing part in the trend following indicator. In brief, trade Contract Grid with the method of trend-tracking.
2) The strategic logic of the Trend Grid trading method

The combination of CTA strategy + contract grid, trend following direction, Contract Grid to resist oscillation and wear.

3. Application scenarios
BTC/USDT trading pairs, the entire trading environment, no need to subjectively judge oscillations and unilaterals.

3) How to operate?

1. Use the dual moving average strategy in CTA signal tracking to select the direction

Policy parameters:

Express (MA): 5

Slow Line (MA): 60

Period: 4hour

When the moving average breaks upwards above the golden cross, the strategy will go long. When it crosses downwards below the death cross, the strategy will go short.

According to the indicator’s signal points, timely opening and closing of positions without subjective judgment is the key to the effective operation of the strategy!

This is all for my sharing of Trend Grid trading, which is a high-level play method that uses a combination of strategies.

Finally, let's summarize: the Contract Grid overcomes many pain points in the Spot Grid and Contract, which can be said to be a real money-making tool that is not reticent of a bull and bear market.

Previous Good Article Recommendation: Why Should You Start Grid Trading Right Now?


However, there is no flawless strategy and trading method. The core of all trading is direction selection and position management. Grid Trading, on the other hand, is a very effective alternative to manual position management. When choosing a trading system, it is necessary to use and correct it for a long time, so that it can really adapt to its own rhythm, and finally achieve the goal of controllable risk and stable returns.

Gate.io Copy Trading Column - sharing useful and practical experiences
The views expressed in this article do not constitute investment advice.
If any omissions, your correction is appreciated.