Master new profit skills: sharing of grid trading methods

Trading strategies are crucial to the success of transactions. An effective strategy can help you easily make profits in the market, while an inappropriate strategy can lead to a lot of losses. Today, we will discuss grid trading method in the future, which is a trading strategy that is particularly suitable for volatile markets.

What is grid trading method?

Grid trading method is a trading strategy based on market fluctuations and uses preset buying and selling points to capture market fluctuations. It takes a certain point as the basis point, and every time it rises, it will place a certain number of short orders, and set profit targets, but no stop loss is set. When the price develops in the expected direction, the profit will automatically close the position and the same pay order is placed at the origin. The trading orders below are intertwined like fishnets, making profits back and forth in the volatile market.

How to operate the grid trading method?

Set the base point: Select a key price or a closing price of a certain day as the base point of the grid.

Prepaid order settings: Before the daily opening, set a certain proportion of sell orders upwards (such as 5%) according to the base point price, and set a same proportion of buy orders downwards (such as 5%).

Dynamic adjustment: Once there is a transaction, immediately use the new transaction price as the new basis point, and re-built new buy and sell orders in the corresponding proportions of the upper and lower levels to form a dynamic networkgrid system.

Key points of grid trading method

Selected target

Select trading targets with clear long-term upward trend and moderate volatility. Avoid choosing targets with unilateral downward trends, because in such a market, any long strategy will be difficult to make a profit.

Reasonable position building

Take advantage of the market bear market opportunities and establish a bottom position reasonably based on market valuation. The proportion of bottom positions can be determined based on market valuation and personal risk preferences. Generally speaking, bottom positions can increase moderately when the valuation is low.

Precise grid

Scientifically set grid spacing and trading volume per grid based on market volatility and personal funding status. Too dense grid spacing may lead to frequent transactions and increase handling fee expenditures; while too wide spacing may miss market volatility opportunities. The transaction volume per grid should also be reasonably allocated based on the scale of funds and risk tolerance.

Advantages of grid trading method

The reason why grid trading is favored by many traders is mainly because it has the following advantages:

• Strong market adaptability: It is especially suitable for oscillating markets and can make full use of market volatility and profitability.

• Risk controllable: control the risk within a certain range by preset buying and selling points and no stop loss.

• Simple operation: Once the grid is set up, there is no need to keep an eye on the disk at all times, saving time and energy.

• Continuous profit: In an oscillating market, grid trading method can continuously capture market volatility opportunities and achieve stable profits.

Grid trading method is to establish a practical trading system, use established strategies to implement established plans when consolidating the foreign exchange market. If the grid can be as accurate as possible when formulating the grid, it can ensure profits to the greatest extent during trading. The key to this foreign exchange trading method lies in perseverance.