Gate.io Blog, The latest official news
Author: Frank Yin, Experienced Trader of Gate.io
2. If you don’t dare to enter when heavy volume falls, then you will miss bargain price opportunities
3. If you are unable to hold the rising currency, you may have a lack of imagination for the long-term trend, and miss out on big profits
4. No single trading strategy or trading tools are enough to deal with all the complex currency market conditions
As an ordinary investor, if you want to overcome the volatile currency market and obtain long-term stable and generous investment income, you need to master three core essentials:
1. Correct investment philosophy
2. Reasonable position size
3. Efficient investment tools
I have covered the first two in one stroke. To put it briefly, almost all books on investment will mention it, nothing more than: "spare money investment, adherence to value investment and time management, fixed investment and step-by-step increase in positions" and so on. Now we will focus on high-efficiency investment tools, and see whether grid trading and CTA signal tracking strategies in Gate.io's quantitative copy products can help you obtain long-term high returns.
It just so happened that Gate.io smart quantization was fully upgraded to now include copy trading on July 7. Let's take a look at how this works:
In Gate.io quantitative copying, users can choose to copy other user strategies based on their investment experience and ability, so that the investment expert can help you to make money. Investors can also potentially choose to "become a signaler" using grid, CTA, and other tools to create a strategy, while making money for yourself. You can also get an additional 5% of the profits of other users who copy your signals.
Now let’s analyze the spot grid from concepts and principles, parameter settings, trading techniques, best use scenarios, advantages and disadvantages, to help you understand the spot grid trading more comprehensively, and truly understand yourself, the market, and the tools to achieve Long-term stable profitability.
The concept and principle of spot grid trading
1.A brief de_script_ion of quantitative trading
Grid trading is just one of the most common trading strategies among many quantitative trading strategies. Quantitative trading refers to the use of advanced mathematical models to replace human subjective judgments, and the use of computer technology to select a variety of "high probability" events that can bring excess returns from huge historical data to formulate strategies. It greatly reduces the impact of investor sentiment fluctuations, and avoids making irrational investment decisions when the market is extremely fanatical or pessimistic. Quantitative trading has the characteristics of discipline, system, probability of winning, and arbitrage.
2. The origin of grid trading
The idea of grid trading comes from Shannon, the father of information theory.
One day in the 1940S, Shannon demonstrated to investors on the blackboard that 50% of the funds were bought at any price, that is to say: Position value: remaining available funds = 50%: 50%. When the stock price rises to a certain extent, some stocks will be sold, and the current position value: remaining available funds = 50%: 50%. Conversely, if the stock price drops by a certain amount, the remaining funds will be used to buy part of the stock. The current position value: remaining available funds = 50%: 50% can always be maintained.
Using this method to deal with the random movement of stock prices, long-term trading is profitable. In his more than ten years of trading career, he has achieved 29% annual compound interest growth.
3. What is grid trading
Within a certain price range, divide the funds into N equal parts, buy one for every fall, and sell one for every rise. Deterministic profitable transactions of buying low and selling high are being carried out all the time.
4. Features of spot grid
Grid trading has the characteristics of increasing positions at low prices and lightening fast exits at high positions, which is naturally suitable for volatile markets. The currency market is a market with short bull runs and long bear slides. Data shows that 70% of the time the market is in a volatile period, which provides us with a natural trading environment for grid trading.
Gate.io spot grid parameter settings
ABC has three different price ranges. Compared with A, there are some idle funds in B and C. We know that the grid has a disadvantage that the utilization rate of funds is low. If the price range is set unreasonably, the range is too large. The utilization rate is even lower.
Here are two ways to find the price range:
A. Find the upper and lower intervals of the Bollinger Band (boll) directly, as shown in the figure:
4. Make good use of AI recommendations, triggers, terminations, and other conditional tools
The situation of pending orders are clear at a glance
1. Make good use of the BTC and ETH trading markets in the volatile upward market
3. The advantages and disadvantages of spot grids
Gate.io spot grid advantages:
A. No need to watch the market, 24-hour automatic arbitrage machine, naturally suitable for volatile market
B. It is friendly to novices, and the cost of learning is extremely low. AI recommendation grids can be used, and the strategies of other signalers can also be copied
C. There are more than 1,000 trading pairs to choose from, and there are many opportunities
D. The handling fee is low, which can be deducted by point card or GT, as low as 0.06%
However, the spot grid is not omnipotent. For example, the one directional downward market is easy to be caught on the wrong side adding to the position, and while the utilization rate of funds is relatively low, it is still easy for price to run out of the range against the investor.
As we said earlier, there is no perfect tool. Any tool has its value and weaknesses. Only by continuously learning, understanding the tool itself, familiarizing yourself with the market, and understanding one's own risk appetite, can an investor find the most suitable way to make money in whatever the current situation becomes.
Please use the Gate.io Quantitative Column-Sharing to share your “hardcore actual combat” experience. Thank you for your attention!