[Classic Grid] The currency price fell and then corrected, why is my return negative?

Q: When I edited the price range after the price drop, why do I still bear losses when the price climbs back?  

A: When the price fluctuates and goes out of the price range, it is very common for users to adjust the range to make the bot arbitrage again. 

However, in this case, it also means the possibility of losses. This is because when the price range is edited to a lower level, the trigger price is also lowered, which means that your coin will be sold at a lower price.

Take KCS/USDT as an example.

Suppose your order details are as follows: Investment: 100 USDT,the entry price of KCS/USDT: 10 USDT, price range: 9-11 USDT, No. of orders: 2. When the grid bot is created, the holding is 5 KCS + 50 USDT, and the total investment is 100 USDT. Imagine then that the price of KCS/USDT drops from 10 USDT to 9 USDT, and the bot buys in. However, the KCS price continues to decrease from 9 USDT to 8 USDT and goes out of the range. To make the bot arbitrage again, the user edits the range to 7-9 USDT, meaning the bot will then buy low and sell high in the new range. After that, the price of KCS rebounds from 8 USDT to 10 USDT, and so the bot stops buying out and sells all KCS at the price of 9 USDT, which is also the upper limit of the new range. At this time, the holding price becomes lower than the entry one, which will result in losses. 

 

*The above example has excluded the condition of trading fee depreciation. 

Was this article helpful?
1 out of 1 found this helpful

Comments

0 comments

Article is closed for comments.