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Overview
Grid trading is an automated strategy that places a series of buy and sell orders at preset price intervals above and below a central price level, forming a grid. As price oscillates up and down within the grid, the bot continuously buys at lower levels and sells at higher ones, accumulating profits from each completed buy-sell cycle.
The strategy requires no directional prediction: it is purely mechanical and profits from volatility. A symmetric grid places equal-spaced orders both above and below the current price. An asymmetric grid can be biased toward one direction if the trader has a directional view.
Key parameters are the grid spacing (how far apart each level is), the number of grid levels, and the total capital allocated. Grid spacing should ideally match the average daily range of the instrument, ensuring the grid captures the natural oscillations without requiring extreme moves to complete cycles.
The main risk is a sustained directional trend: if price moves far in one direction and never returns, the grid accumulates a large one-sided position that may move into significant unrealised loss. Grid traders typically set a maximum position size limit and a stop-loss for the overall grid to protect against trend risk.
Strategy Code
This is a TradingView Pine Script strategy example for this page concept. Paste it into the TradingView Pine Editor, add it to your chart, and run it in the Strategy Tester.
//@version=6
strategy("Grid Trading Strategy", overlay=true)
fastLen = input.int(20, "Fast Length")
slowLen = input.int(50, "Slow Length")
fast = ta.ema(close, fastLen)This is a thinkorswim ThinkScript strategy example for this page concept. Open thinkorswim, create a custom strategy, paste the script, and apply it to your chart.
def fast = ExpAverage(close, 13);
def slow = ExpAverage(close, 34);
def rsi = RSI(length = 14);
def buySignal = fast > slow and rsi < 65;
def sellSignal = fast < slow or rsi > 75;Join thousands of traders who use auto-Trading to execute this strategy automatically, 24/7.
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