Quickly Understand Futures Grid Strategies

By using a futures grid strategy, users can continuously buy low and sell high or sell high and buy low with market fluctuations, earning profits from these fluctuations. This effectively helps users keep up with market fluctuations and profit from them.

What is a Futures Grid

A futures grid applies the grid trading strategy to contract trading. After choosing a long or short position: for example, long, based on the grid's set price range and number of grids, hold a long position, buy more when the price drops, and sell to close the position when the price rises, thus making a profit from low buying and high selling. Similarly, for a short position, open a short at a high level and close the short at a low level.

Scenarios Suitable for Futures Grids

The core of futures grids is "oscillation arbitrage," so it's suitable to use futures grids when expecting a longer period of oscillating market. Futures grids can also have a certain long or short bias. A long grid only opens and closes long positions, suitable for upward oscillating markets, and a short grid only opens and closes short positions, suitable for downward oscillating markets. A neutral grid opens shorts/closes shorts above and opens longs/closes longs below the market price at the time the strategy starts. Users can choose the appropriate grid type based on their market predictions.

• Futures Long Grid: Used when predicting an oscillating upward price trend. Enter with a long position, close long positions when prices are high, and continue opening long positions when they are low.
• Futures Short Grid: Used when predicting an oscillating downward price trend. Enter with a short position, close short positions when prices are low, and continue opening short positions when they are high.
• Futures Neutral Grid: Used when predicting a range-bound oscillating price. Do not establish a position initially.

Characteristics of Futures Grids

Futures Grids VS Spot VS Contracts

Futures Grids:

• Supported Opening Directions: Supports going long or short, suitable for both bear and bull markets.
• Suitable Market Conditions: Best for oscillating downward or upward markets.
• Risk Attribute: Lower risk than futures.
• Profit Attribute: Controllable risk, considerable returns.

Spot Trading:

• Supported Opening Directions: Only supports going long.
• Suitable Market Conditions: Oscillating upward.
• Risk Attribute: Low risk.
• Profit Attribute: Lower returns than futures grids.

Contracts:

• Supports going long or short.
• Single-direction markets.
• Risk Attribute: High risk.
• Profit Attribute: High risk, high returns.

Advantages of Futures Grids

• Lower risk coefficient than contract trading: futures grids' passive position management can control risks within a certain range. Initial positions might only be about 50%, avoiding the high risk of full-position trading in contracts; users can add positions when low and reduce when high, taking profits in batches. If there are losses, the losses of futures grids are much lower than contract trading.
• Futures grid trading is essentially automatic buying and selling of cryptocurrency derivative contracts in BYDFi contracts, allowing systematic trading without needing to predict market trends.
• Set up a futures grid trading strategy to do the heavy lifting for you. It saves time and effort without needing to constantly watch the market.
• Even in trending markets, prices tend to consolidate in the short term. You must carefully select market conditions suitable for your strategy, avoiding being on the wrong side in trending markets. Therefore, appropriate risk management measures must be adopted, understanding how much leverage to use, and setting conservative take-profit and stop-loss orders.

Potential Causes of Loss

• Incorrect opening direction in futures grids, resulting in floating losses.
• In oscillating markets, holding positions for too short a time, stopping grids before reaching profit positions.
• Improper grid parameter settings, too small price intervals, overly dense grids, profits eroded by fees.

Users Suitable for Futures Grid Trading

• Users who want to leverage returns on the basis of grid trading.
• Users who want to save time and effort, as futures grid trading automates traditional contract trading without needing to watch the market, with the system automatically trading and arbitraging for users based on set parameters, allowing for stable returns in oscillating markets.
• Users who are bearish and choose to go short, setting short positions to profit from quantitative trading

Disclaimer: Futures grid trading is a tool and not financial or investment advice from BYDFi. Profits can be affected by unilateral markets or improper price interval settings. Adjust strategies according to market conditions. Users accept all terms and risks when using this tool on BYDFi.com. Users should recognize the risks of cryptocurrency investment and operate cautiously. All investment actions on BYDFi.com represent the user's true investment intentions, and they accept the potential risks and rewards of their investment decisions.