Wide Price Range

In grid trading, the risk involves the potential decrease in the total value of the investment due to price drops in the purchased token, rather than direct loss of the principal.

With a wide fixed price range, using fewer grid lines can lead to higher returns if the market shows significant price fluctuations, as each grid handles a larger price change, increasing profit per transaction.

However, in markets with minor price fluctuations, having more grid lines could be beneficial by increasing transaction frequency and capitalizing on small price movements to accumulate profits.

Investors should adjust the number of grid lines based on expected market volatility to maximize returns and minimize risks.

The table below can help with understanding:

Wide Price Range

Capital Invested

Price Fluctuation Magnitude

Number of Grid Lines

Relative Return Level

Same

Same

Large

Few

High

Many

Low

Small

Many

High

Few

Low

Last updated