Grid Trading

Grid trading is a trading strategy that involves placing a series of buy and sell orders at set intervals above and below a fixed price level. This forms a “grid” of orders. The idea is to profit from price fluctuations without needing to predict market direction. When the market moves, some of these orders are triggered. As the price continues to move, new orders are opened while others are closed for a profit.

Grid trading is commonly used in ranging markets, where prices move up and down within a certain range. However, some traders also adapt this strategy for trending markets by modifying the grid spacing or using it in combination with indicators. While grid trading can be profitable during sideways price action, it carries significant risk in strongly trending markets. This happens if trades stack up in one direction without enough movement to close them.

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