Ultimate Grid Trading Guide 2023

Ultimate Grid Trading Guide 2023

The grid strategy is one of the most popular and interesting in the world of crypto and forex trading. Simply because it abuses volatility, market fluctuations, and those markets are well known for it. In this guide, I will explain the strategy and showcase a powerful grid trading indicator that can help traders to better understand and implement this strategy.

The Key to the strategy

It involves placing buy and sell orders at predetermined intervals or levels, called "Grid Steps". If a step is crossed to the downside, the strategy will buy. If price crosses a step to the upside, the strategy will sell. The last step to be crossed becomes inactive.

When configuring the strategy, the process is pretty simple. The user can choose the number of steps with a higher and lower step price. With just these 3 settings, you can create a strategy.

Now, the challenge with grid trading, is to optimize these 3 settings.

Maximizing its effectiveness

The first thing you want to do before even going into the settings is to find a suitable market for it. You want these 3 requirements:

  • A ranging/going sideways market
  • High volatility
  • High liquidity

For example, ETH/BTC is one of the most traded pair in grid trading. It has good volume for the strategy, behaves in a range since late 2021, and has decent volatility daily.

Knowing the risks

Very often, the lowest step is used as a stoploss. As with every trading strategy, there are risks and it is important to understand it. With grid trading, we take a bet that price will fluctuate in a range, and abuse that assumption to profit from price action. If price decides to leave the range, there is one scenario that will put us at risk. In the scenario where price breaks to the top, we are fine, this is take profit. However, if price breaks through the bottom (lowest step), we will find ourselves with a lot of buy orders above current price. That means we have unrealised loss. Now two difficult two choices are in our hands: sell at a loss, expecting price to go lower, and stop the strategy to start a new one at lower prices. Or wait until price climbs back up.

In this example, we set a stop loss at 0.063 BTC below the lowest step, and price falls down to 0.048 BTC. If we decided to hold, the unrealised loss would grow bigger as price drops.

Calculating Grid Profit

We will have two types of profit when grid trading. One this called grid profit. Grid profit is generated every time a step is bought and sold at a higher price. The grid step "height" is the spacing between two steps, usually visualised in a % percentage of price. The sum of all the profits generated from the grid steps is the grid profit.

The second type of profit is the open profit. This one is really important and should not be forgotten when calculating your strategy PNL. To put it simply, it is the profit or loss that would be realised if you would close all the open orders at current price. The open profit can vary a lot and it is crucial to know its value when you are looking to take profit or stop the strategy.

In this example, I chose round numbers to make it easier. I used 2000 usd as initial capital for the strategy, which contains 20 steps. The strategy will therefore split this equally through the steps, so 100 usd per steps. I chose a grid step of 1.1% of price, which is makes around 1% after fees. It will consequently take 20 closed steps to generate 1% grid profit from the initial capital. After running the strategy for 74 days, we have 21 steps closed, which makes a tiny bit more than 1% grid profit in total. However, the open profit from the 12 orders still open is negative because price dropped. If we were to close all open orders and stop the strategy right now, the total profit would be 1.03 - 4.35 = -3.32 % We can see that it would not be a good time to stop the strategy, and shows that grid trading needs time to generate grid profit. That is why even though it is run on low timeframes, it remains a long term strategy.

Cyato Grid

Cyato Grid is a powerful indicator that can help to better understand and implement this strategy. I will now explain the key features and settings of the indicator, provide examples of how to use it in real-world trading scenarios, and offer tips and advice for maximizing its effectiveness.


As soon as you set the 3 settings - number of steps, lowest and highest price -, you will get results in the Strategy Tester and in the Backtest table in the top right of the chart. Those results will vary based on your strategy initial capital and order size. The order size being the amount to buy on each step, and is usually the same for each step. A good practice is to divide your inital capital by the number of steps to make sure you will never run out of funds to run the strategy.

Order Type

The strategy can be configured to use market or limit orders, as you prefer.

With market order type, the strategy will place market orders at the current price every time a step is crossed.This allows to ensure that every order is filled, however you are subject to buy and sell a bit higher or lower than the exact grid step prices, and you will pay taker fees.

With limit order type, the strategy will place limit orders.This allows to ensure that the strategy will buy and sell at the exact step prices and pay maker fees, which are usually less than taker fees.To make it work, the "Start Date" setting comes into place.

TradingView Screenshot

Key Features

  • Price percentage % step
    • Lets you set a price percentage between steps. The grid is then generated starting from lower or upper, configurable.
  • Trailing Up
    • Automatically creates new steps when price climbs out of range.
    TradingView Screenshot
  • Trailing Stop
    • When trailing up is activated, the stop loss will dynamically follow the lowest price.
    TradingView Screenshot
  • Take Profit
    • Secure profits by stopping the strategy once total volume (grid profit and open profit) reaches a configurable percentage %.
    TradingView Screenshot


You can fully automate the strategy through its alerts.Set the alert messages for buy, sell, take profit, stop losses directly in the indicator settings.Use the parameter "alert() function calls only" and you're good to go.It will use only 1 alert slot to run the whole strategy.

Since it is not possible to place orders directly in TradingView, you will need a bot-software to do it.You can use any bot that work with TradingView alerts.Now, I offer a bot system for Binance along with the indicator. More info here.

Sample Use casesCrypto







Tips and advice
 1 — Set up the grid properly: Make sure you have a clear understanding of the asset you're trading and the market conditions that are affecting it. Set your grid levels based on your analysis of the asset's price movements and volatility.
 2 — Adjust the grid as necessary: Keep an eye on market conditions and adjust your grid levels as needed. This will help you capture gains and limit losses as the market moves.
 3 — Use proper risk management: Make sure you have a clear understanding of your risk tolerance and use appropriate risk management techniques, such as setting stop-loss orders, to limit your potential losses.
 4 — Don't overtrade: Grid trading involves placing a large number of orders, so be mindful of transaction costs and don't overtrade. This will help you maximize your profits and reduce the potential for losses.
 5 — Consider using automated software: Grid trading can be automated using software, which can save time and reduce the potential for human error. Consider using a reputable software provider and test your strategy thoroughly before using it in live trading.
 6 — Keep a trading journal: Keeping a trading journal can help you evaluate your strategy and make improvements over time. Record your trades, including the grid levels and any adjustments you make, and evaluate your performance regularly.
 7 — Stay disciplined: Stick to your strategy and avoid making emotional decisions based on short-term market movements. Stay disciplined and focus on the long-term profitability of your grid trading strategy.

Written by Cyatophilum - -