Grid trading
Grid trading places buys and sells at set levels across a price range to gain from swings inside it. Definition, example and where it goes wrong.
Definition
A strategy that buys at set price levels below the current price and sells at set levels above, aiming to gain from swings within a range.
A grid divides a price range into levels. The strategy buys as the price falls to each level below, and sells as it rises to each level above. In a market that swings back and forth inside the range, each round trip adds a small gain.
Example
BTC trades between $84,000 and $90,000. A simple grid buys at $85,000 and sells at $87,000, then buys again at $85,000 if the price returns. Each completed round trip adds about 2.4% on that slice, before fees.
Why it matters
Grids suit sideways markets and struggle in trends. If the price climbs out of the top of the range, the grid has sold everything and sits in cash. If it falls out of the bottom, the grid holds coins bought at every level on the way down, which is averaging down without a limit. Fees on many small round trips also add up quickly.
How TradeCorgi uses it
TradeCorgi runs a guarded grid: a range rule with at most 2 open entries, a stop-loss below the range and a daily loss limit, because agents never average down beyond 2 entries. Read the grid trading strategy for the full rules and a worked example.