how a grid works
A trader defines a price range and divides it into levels. Depending on the strategy rules, the system may place buy and sell orders as price moves between those levels. Exact implementation varies by platform and settings.
where it can struggle
01
strong trends
Price can move outside the chosen range and leave exposure that is difficult to unwind.
02
fees and slippage
Repeated orders create costs that can reduce or erase small gains.
03
capital commitment
Funds may remain tied up in open positions or orders for longer than expected.
04
poor parameters
A range or spacing that does not fit market conditions can produce unwanted exposure.
questions before activating
- What market condition is the strategy designed for?
- What happens if price breaks above or below the range?
- How much capital can become committed?
- Are fees, funding and slippage included in your assumptions?
- Can you pause the bot and manage open positions yourself?
avoid profit assumptions
A grid can generate frequent trades while still losing money overall. Review the full position and risk, not just the number of completed orders.