Custom metrics · Neutral grid strategy · Buy low, sell high 1、 Core Principles of Grid Strategy Grid strategy is a simple and effective quantitative trading strategy, with the core idea of taking advantage of market price fluctuations to repeatedly accumulate profits within a set range by buying low and selling high. ​​​​​​​ 1. Common example: Assuming we have a fruit market stall selling apples with prices fluctuating between $1 and $2 per day: If someone is willing to buy an apple for 1.5, we will sell it to them; If the price drops to 1.2, we will purchase at a low price; When the price rises to 1.7, sell again for profit. Even if the prices in the entire market are fluctuating rather than rising, we always earn the price difference through volatility, just like the operating principle of grid strategy in the digital currency market. 2. Core principle: Buy low and sell high, lock in the profit of each fluctuation Assuming that the price of BTC in the market often fluctuates within a certain range (such as between 110000 and 130000), but you cannot accurately determine whether it is going to break through the upward or downward trend. If you try to buy all at once and wait for the trend, you may take on significant risks. At this point, the unique advantages of grid strategy become apparent: Divide the price range (110000-130000) into several "small grids" (such as one grid for every $1000). Whenever the price drops and touches a certain grid, buy a certain quantity here. Whenever the price rises and touches a certain grid, sell a certain quantity here. Through this strategy, every time the price fluctuates between grids, you capture a small profit. Moreover, whether it is a sideways oscillation or a significant fluctuation in price, as long as the price changes within this range, you can continue to make profits. 3. Why is grid strategy effective? Essentially, many digital currency prices (such as Bitcoin and Ethereum) often exhibit strong volatility and uncertain direction. This kind of rising and falling market is very suitable for grid strategy, for the following reasons: (1) The price will not 'keep rising' or 'keep falling': Most of the time, market prices go through a cycle of rising, falling, and fluctuating. Even if prices show a long-term trend, they are usually accompanied by short-term corrections and rebounds. Grid strategy utilizes this price fluctuation to break down the overall trend into multiple small-scale trading opportunities. (2) Avoiding subjective judgments: Under traditional methods, investors always hope to buy at low points and sell at high points, but often miss opportunities due to misjudgment. The grid strategy is based on the principle of "mechanized buying and selling", which does not require determining the specific direction of the market. As long as the range and grid are set, it can be automatically operated to eliminate emotional interference. (3) Suitable for volatile markets, digesting fear and greed: In a volatile market, ordinary investors may be afraid of the price falling below support, hesitant to buy, or worried about missing out on returns and not knowing when to sell. The grid strategy happens to buy at low levels and sell at high levels during each market fluctuation, helping investors easily make profits. 4. The operational mechanism of grid strategy Assuming we operate an asset through a grid strategy, it can be divided into the following steps: 1) Set price range (high and low points): For example, it is expected that the price of ETH will fluctuate between $2000 and $3000. 2) Grid division: Divide the interval into several small segments (such as 5 grids, i.e. every $200 is a grid). 3) Set the funds for each transaction: Assuming that each grid purchases 0.05 ETH and the total funds are controlled within a reasonable range. 4) Grid trigger logic: When the price drops from $2200 or above to $2200, buy 0.05 ETH; Sell 0.05 ETH when the price rebounds from $2200 to $2400. Simply put, every time a buy or sell action is triggered, a 'buy low, sell high' is achieved. 5) Automated execution: With the help of exchange grid robots or quantitative tools, all operations will be automated.