Introducing a dynamic grid strategy featuring adaptable trading targets and integrated trailing for both purchasing and selling.
Derived from spotgrid, this approach offers supplementary configuration options, trend identification, and 'continuous trading' capabilities.
Standard trading patterns
When implementing spotgrid on a trending pair, anticipate the following trading behavior:
Here's an in-depth explanation of the process:
- Upon strategy initiation with no balance to sell, a market buy order is instantly placed
- If the price declines and surpasses the spotgrid line on the chart, buy trailing is triggered. Following the completion of trailing, a buy order is executed, subsequently lowering the break-even price.
- When the price reaches the Sell target on the chart, sell trailing begins, and the entire position is sold at a profit upon trailing completion.
- After selling, buy trailing recommences. If the price increases, a new position will quickly open; if it decreases, a buy order will be placed beneath the previous selling rate.
Note that initial buy orders occur relatively swiftly when the price starts dropping. After several transactions, the gap between buy orders significantly widens. Targets are set automatically.
As the market declines, the strategy progressively amasses units at increasingly lower prices:
The bot persists in accumulating until either the maximum buy count is reached or funds are depleted. Each new buy order reduces the break-even price. Once the price hits the selling target and finishes trailing above break-even, a sell order is placed.
Effective balance management is crucial, so ensure you can accommodate the intended number of buy orders.
Continuous trading patterns
CT, or 'continuous trading,' enables profitable trading even when the present price falls substantially below the overall break-even price.
The concept is straightforward: if the price exceeds that of the last buy order, up to the number of units acquired in this transaction can be sold for marginal profit in base and quote. Retain the base gains and use the quote profits to lower the overall position's break-even.
In addition to minor earnings from these partial trades, this tactic allows your strategy to closely track market price fluctuations and occasionally incorporate more DCA trades within a single price range, as opposed to merely waiting for further price drops to DCA.
The chart above displays numerous CT transactions. Each sell order on this chart correlates only with the units obtained from the preceding buy order. The quantity of units to 'CT sell' can be adjusted using the continuous trading limit multiplier; setting this value to 1 would sell roughly the same number of units as last purchased, while 0.5 would sell approximately half of the last-bought units.
When do specific events occur?
Assuming your settings permit CT orders:
- When the price falls post-DCA order: another DCA order is placed upon hitting the grid DCA target.
- When the price rises post-DCA order: a CT sell target is established above the last buy rate, utilizing 'gain' or 'auto gain'. Upon reaching the target, a CT sell order is executed.
- When the price decreases after a CT sell order: if the grid DCA target is met, a 'CT buy' order is placed for roughly the same number of units as the CT sell order, maintaining a consistent position size before and after the CT sell order.
- When the price declines post-CT buy order: a standard DCA order is executed when the DCA target is reached.
- When the price increases post-CT sell order: if the price is beneath break-even and the gap between the last selling rate and current price exceeds that between initial support and resistance, a new CT buy order is placed.