Gate.io Copy Trading Special : Spot Grid with Annualized Returns of 1203%. Go pro!

Let's conduct a short survey to see what mistakes traders make during transactions:

1. Eagerness to chase the high during the lows, is a way to trap yourself.
2. Afraid to buy in when it goes down, missing the opportunity to get low-cost chips.
3. Unable to hold the rising coins, lack of imagination for long-term trends, missing the bigger picture and therefore missing big profits.
4. Using the same strategy and the same tools in a complex crypto market is another way to fail.
As an ordinary investor, in order to defeat the barbaric crypto market and obtain stable and rich investment returns in the long run, you need to master three core essentials:

1. Correct investment philosophy

2. Reasonable position configuration

3. Efficient investment tools

Let's focus on efficient investment tools such as Gate.io Copy Trading products - grid trading, CTA signal tracking strategies, etc to see if they can help you achieve long-term high returns.

Gate.io Smart Quantitative Trading was fully redesigned and upgraded to "Copy Trading" on July 7.


With Gate.io Copy Trading, users can choose to copy successful user strategies according to their own investment experience and ability. This way you can gain along with a pro investor.
You can also choose to "become a signaler" to use the grid, CTA and other tools to create strategies. While your strategy makes money,you can also get an additional 5% of the profits from the other users who will copy your strategies.

Lets analyze Spot Grid from the concept and principle, parameter setting, trading skills scenarios, pros and cons, to help you understand Spot Grid.

1. The concept and principle of spot grid

1). A brief de_script_ion of copy trading

Grid trading is only one of the most common strategies in copy trading. Copy trading refers to the use of advanced mathematical models to replace artificial subjective judgments, which use computer technology to select a variety of "high probability" events and develop strategies from the huge historical data. This greatly reduces the impact of investor’s sentiment fluctuations, to avoid making irrational investment decisions in the case of extreme market fanaticism or pessimism. Copy trading is characterized by discipline, systematic thinking , probability to win and arbitrage, etc.



2). The origin of grid trading

The idea of grid trading comes from the father of information theory, Shannon.

In 1940, Shannon demonstrated to investors on the blackboard: at any price, 50% of the purchased funds are used as the initial position. When the price rises by a certain amount, a part of the position is sold, and when the price drops by a certain amount, a part of the position is bought. In this way, then the ratio of position value to the remaining available funds always keeps 50% to 50%.

Long-term trading was profitable with this method to deal with random movements in stock prices. In more than a decade of trading, Shannon achieved a compound annual interest growth of 29%.

3). What is grid trading?

Within a certain price range, divide your money into N equal portions, buying one portion for each decline and selling one portion for each increase. Buy low, sell high, to make sure profit-making trades all the time.


The principle of grid strategy is "positioning strategy is more important than timing strategy". The basic operation method is to use a certain point as the base point, hang a certain number of short orders and long orders for every increase and decrease of a certain number of points, set a profit target, but do not set a stop loss, when the price progresses in the desired direction, take profit and close the position. Place the same buy order and sell order at the origin position. The transaction orders placed in this way form an array like a fishnet, which makes profits back and forth in the volatile market.


4). Characteristics of spot grid
Spot grid trading has the characteristics of increasing position in low price and decreasing in high price, which is naturally suitable for the choppy market. In fact, there is a short bull market and long bear market in the crypto market. Data shows that 70% of the crypto market is in the oscillation range, which provides a natural trading environment and soil for investors to grid trade.


2. Parameter settings Gate.io spot grid

1). Select the appropriate spot grid trading target

Mainstream coins with good consensus and high liquidity are preferred. You can refer to the trading of CMC's top 100 digital assets on Gate.io.

B. Auxiliary volatility indicators

Reference indicator: ATR(14) - represents the average true volatility of the last 14 periods, as shown in the chart below


For example, BTC/USDT: the current 1-hour ATR(14) is 330.29, the current BTC/USDT is 32844.68, the volatility is 330.29/32844.68 = 0.010047 (1.004%), and the transaction fee is 0.15% (holding GT to deduct fee). The completed arbitrage for one time is 0.5002%, and the target profit margin for the hourly grid is estimated for the transaction: 0.5002%-0.15%=0.35% after deducting the fee.
2). Reasonably set the price range

ABC has three different price ranges. Compared to A, B, C that have a part of the idle funds, the grid has a disadvantage that the utilization rate of funds is low, if the price range is set unreasonably, the larger range set, the lower the utilization rate of funds.

Here are two ways to find a price range:
A. Directly find the upper and lower intervals of the Bollinger Band (boll), as shown in the figure:
Look at the upper and lower interval in the Bollinger Band during the 4-hour period and set the price range as a reference.

B. Draw a trend line, as shown in the following figure:
The highs and higher highs are connected by a line, the lows and the lower lows are connected by a line as well. The blank space in the middle of each line segment is the price range we are looking for.

Of course, for investors with rich trading experience, they can directly give the range according to experience, such as the current BTC price is around 33000 USDT, which can float up and down 5000 US dollars, which is also feasible as a price range.

3). Distinguish between equal-difference and equa-ratio grids to determine the number of grids


Arithmetic grid (small range): the difference between buying stop and selling stop is equal, if the oscillation range of price is small, then the equal difference grid can get more grid profits, with the single grid floating in yield .

Geometric grid (large range): the ratio of the buying and selling is equal, if the price is a unilateral market that oscillates upwards, then the equal ratio grid can get more floating profit and loss, with the single grid fixed in yield.

Number of grids: the price range, equal difference/ratio, and the number of grids ultimately affect the single-grid yield. The number of grids can be adjusted according to the yield.

4). Make good use of conditional tools such as AI Recommendation, Trigger price of the strategy, Termination, HODL mode.
The parameter setting of the spot grid determines the speed of making money, and the use of these tools can multiply the income under the same conditions.
A. AI recommendation: it is the optimal parameter of the arithmetic grid given according to the income of the backtest in the past 7 days, which is more suitable for running short-term grids and suitable for grid novices.
B. Trigger price of the strategy: only when the latest market price is lower than or equal to the trigger price will the strategy be activated. When configuring the strategy, the set trigger price must be lower than the latest market price and fall in the price range of the grids.
C. Take profit, stop loss: the take-profit price is higher than the upper limit price. When the crypto price rises below the take-profit price, it will trigger the take-profit, and the grid order will automatically end; and vice versa.
D. HODL mode: When enabled, the strategy grid income will be converted into equivalent tokens in real time, which is very suitable for holding at the end of the bear market.
5). View the details of strategy operation
(1) Operation overview: total income = grid income + floating profit and loss
(2) Capital overview: you can view the investment funds of current grid trading pair
(3) Parameter configuration: all parameters of the trading pair, including the situation of the buy-stop and sell-stop, are clear at a glance.
3. Grid trading skills and best scenarios
1). In the fluctuating market of upward movement, make good use of the BTC and ETH trading markets.
In an unilateral upward market, grid trading can easily run out of the upper limit of the price range, resulting in token loss in advance and inability to maximize returns. However, it can be avoided if you choose the BTC and ETH trading markets, especially the ETH/BTC trading pair, which is known as "machine that enables you to earn in a breeze even in a bull market machine and machine that never stops arbitrage".
2). HODL model, the tool to make automatic investment plan during a bear market
There is a famous saying in the investment field that "if there is no layout in the bear market, the bull market has nothing to do with you", and the HODL coin model is very conducive to the collection of low-price chips in the bear market.
3). Advantages and disadvantages of spot grid
Advantages of Gate.io spot grid:
A. No need to keep an eye on the trading, since it is a 24-hour automatic arbitrage machine, naturally suitable for oscillating market
B. Friendly to novices. It’s so easy to learn. You can use an AI recommendation grid and copy from other signalers.
C. More than 1000 trading pairs are available to choose from, with so many opportunities.

D. Low fee. You can use Points or GT deduction, with the minimum fee as low as 0.06%.
However, the spot grid is not all-powerful. For example, you are likely to be trapped in the unilateral downward market and the utilization rate of funds is relatively low. Also, it is easy to run out of the range.
We say that there is no perfect tool, and every tool has its place of maximum value. Only by continuous learning, understanding of the tool itself, familiarity with the market, and understanding your own risk preferences, can we find the most suitable way to profit in the current market.
Gate.io Copy Trading Special Column - sharing of useful and practical experience.
Thank you all for reading this article!

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