After the outbreak of COVID-19, there has been a period of unilateral rise in the encrypted currency market dominated by bitcoins, but the current encrypted currency market seems to be starting to enter a consolidation period, especially in the recent month or more, there have been several shocks.Although Bitcoin has been on the rise for a long time, many people have noticed the recent sharp fluctuations in prices and price fluctuations.Bitcoin prices have experienced at least five large shocks in the first two months in just 40 days, almost every week, and even fewer small shocks.
Many investors feel at a loss in the current volatility of the encrypted currency market. Even though they understand the principle of "chasing up the rise and then cutting down", they often fail to do "chasing up and cutting down" in the actual investment transactions, resulting in fewer and fewer assets in their hands.In addition, when facing the continuous concussion, people's investment mindset is also different, some investors want to cut meat and leave the market, some want to copy the bottom and add warehouses, but due to the rapid changes in the market, it is almost difficult for investors to grasp the exact timing of entry and exit, the result often becomes "catch up early and late".Therefore, in the current market situation, encrypted investors should not blindly predict and drop orders, but should follow a scientific and rational "shocky market response".
In the traditional stock market trading, there is a "grid trading" mode to deal with the volatile market. This trading strategy divides the funds into several equal parts by setting price intervals, performs mechanical operation on the investment target, buys in stages when falling, sells in stages when rising, and effectively reduces the long-term investment costs, and accumulates profits in the volatile market environment.Today, some headline exchanges are also introducing grid Trading into encrypted currency markets to maximize investor returns by selling high and pulling low.
Grid Trading Enters Encrypted Money Market
Historically, about 70% of the time in the encrypted currency market has been volatile, making it difficult for traders to pinpoint the direction of the market. Only investors with an effective trading method can accumulate arbitrage funds in the encrypted currency field.
Currently, there are not many encrypted currency exchanges that support network transactions, but these exchanges provide users with a wide range of human-friendly features, simple grid strategies, and are more user-friendly.For example, you can customize order placing and AI smart recommendation order placing.
If users execute Custom Grid ordering on the platform, they can complete the setup simply by filling in parameters such as interval maximum price, interval minimum price, number of grids, input amount, etc. After clicking on the generation strategy, the system will place orders and transactions automatically.It would be easier for users to execute AI Intelligent Recommendation orders on the platform, because the platform would fill in the optimal policy parameters based on the historical test data, and users only need to set the amount of input.It is important to note that when placing an AI Intelligent Recommendation order, the number of grids created at different times may vary due to changes in historical data over time and AI analysis.
When the strategy is successfully generated, the system automatically transfers the user's input assets to the Quantitative Account. When the strategy stops, all the input assets and benefits of the user's current strategy are automatically transferred to the Currency Account. The system automatically buys a certain number of basic digital assets based on the parameters set by the user and in each grid cell.Hang the corresponding purchase or sales slip on the point.When the price fluctuates to the lattice point, the bill of lading is traded, and when the bill of lading is traded, the bill of lading is sold in the previous lattice; otherwise, when the bill of lading is traded, the bill of lading is placed in the next lattice.When the user stops the policy or the stop/stop trigger, the policy stops and all underlying digital assets are sold as valuated digital assets.
Therefore, users only need to configure their strategy in the initial stage when performing grid transactions, after which almost all activities can be handled automatically by the robot.This tool doesn't require a user's eye and can easily benefit without looking at the market.Given the recent turmoil in the encrypted currency market, it is timely to opt for online grid trading, and the small number of encrypted currency exchanges currently supporting online trading, this track offers huge opportunities and will attract the attention of many new and old investors.
Advantages and considerations of grid transactions
Currently, there are two main currency selection modes for grid transactions for investors: for novice users, you can choose mainstream currencies such as BTC/USDT or ETH/USDT, which are not easy to miss trading opportunities because of their large volume of transactions and good liquidity; for relatively experienced users, you can choose currencies with long-lasting recent fluctuations.
It is worth noting that although grid Trading guarantees grid profit, when there is a one-sided downward trend, it may still cause a loss when the holding cost is higher than the current price.In addition, grid trading is not currently used much in encrypted currency markets compared to more mature derivative trading such as futures, so investors need to be careful when choosing currencies.
Although increasing grid density has the opportunity to profit within more granular price ranges, this is not the case. With a fixed amount of capital, too many grids will reduce the price differentials between individual grids and the number of purchases of individual grids, reducing the return on a single transaction.That is, the higher the grid density, the lower the single-grid profit, the more frequent transactions, and the higher the handling cost. The lower the grid density, the higher the single-grid profit, the lower the transaction frequency and the lower the handling cost. Therefore, a reasonable grid density is also very important.Basically, the transaction costs are low or the grid setup gap cannot be too small to avoid too frequent transactions, since the handling fees are still there.
In order to assess reasonable grid density, some exchanges also provide users with a reference to the true mean fluctuation range (ATR), which can reflect the price fluctuations of digital assets.If the grid price difference is less than ATR, the grid strategy will have a higher transaction probability and a higher yield; otherwise, the grid strategy will have a lower transaction probability and a lower yield.
It is important to note that grid trading can take some time to see the advantages, but it will not give investors too much feedback in a short period of time.Better results should be seen over time, as well as continuously optimizing policy parameters.In addition, this reminds investors that if the currency encounters unpredictable situations such as outage and delisting during the operation of the grid strategy, the grid strategy will be automatically suspended, and investors need to be prepared for such risks.
In fact, the advantage of grid trading is that it is not controlled by artificial emotions, and once a strategy is set, it will be executed in full accordance with the pre-determined buying and selling points.Investors will not miss the opportunity because "high price is unwilling to throw away, low price is not afraid to sell".Grid trading is a good option if you don't want to focus all day on the ups and downs, gains and losses.More encrypted currency exchanges are expected to introduce grid Trading later, up and down in this area.
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