MEXC Spot Grid Trading Tutorial

What exactly is Spot Grid Trading?

Spot Grid Trading is a quantitative trading strategy and automated trade execution that allows users to profit from market volatility by automatically buying low and selling high within a given price range.

To execute the spot grid, the user only needs to specify the minimum and maximum price range, the number of grids, and the amount to be invested.

The execution of quantitative trading strategies in an automated form in cryptocurrencies is also known as trading bots or crypto bots, and the benefits are as follows:

-Reduces repetitive tasks

-Take advantage of trading opportunities

-Reduces your trading risk

How do I get started with spot grid trading?

1. Go to the official MEXC Global website and login, then click on [Trade] -> [Quantitative Trading].

2. On the [Quantitative Trading] page, select [Strategy Pool] -> [Create Grid].

3. Set the parameters and click [Create] to execute the spot grid.

Parameter settings description

• Trading pairs: Choose the cryptocurrency pair you want to trade, for example, BTC/USDT.
• Lower bound: The lowest price you will pay to buy in. If the market price drops below this price, the system will stop buying.
• Upper bound: The highest price you've set for selling out. The system will stop selling out if the market price rises above this level.
• Grid: The number of grids to be placed. 

*Note: The system is set to (number of grid -1), if your ideal number of grids is 5, please fill in 6

• Price Difference (automatic calculation): (Upper bound – Lower bound)/ (total number of Grid -1)
• Profit per Grid (automatic calculation): Profit percentage after matching buy and sell orders for each grid.
• Invest currency: Users can select the cryptocurrency in which they want to invest. For example, if your trading pair is BTC/USDT, you can invest in BTC, USDT, or BTC USDT.
• Invest amount: The amount you wish to invest (based on the assets available in your spot account), the investment amount must meet the minimum investment amount in order to execute the spot grid.
• Minimum investment amount (automatic calculation): The calculation is based on price difference and number of grids.

- The minimum investment goes up as the price difference goes up.

- The minimum investment goes up as the number of grids goes up.

• Advanced Settings (Optional)

-Trigger price: When the market price rises above or falls below the trigger price, the grid orders will be triggered.

-Stop-loss price: It denotes the lowest price at which the base currency can be sold. When the base currency's market price falls below the Stop-loss Price, the system will automatically sell the currency to stop losses.

-Take-profit price: When the market price reaches the set take-profit price, the system will automatically stop trading and settle for you to maintain your profit guarantee.

• Sell BTC upon termination (ticked): When you terminate a Spot Grid trade, the system will automatically settle the trade based on the currency you hold, such as Bitcoin. If this box is unchecked, you will continue to hold this currency after Spot Grid trading has ended.

Example

1. Using BTC/USDT as an example, set the parameters as follows:

• Lower bound: 20000 USDT
• Upper bound 40000 USDT
• Number of grids: 5
• Market price at the time of creating the spot grid: 30000 USDT
• Price difference.

(Upper bound – Lower bound) / Number of Grids

(40000 - 20000)/5 = 4000

• Based on the aforementioned parameters, the prices (USDT) for each grid are: $40000, $36000, $32000, $28000, $24000, and $20000 respectively. 

This means that prices are divided into five equal grids between $40000 and $20000, with the distance between each grid being the same. Each grid has a $4000 difference.

2. Principle:

• Orders will be placed from the top grid to the bottom grid in Spot Grid Trading. When a buy order is fulfilled, a sell order is placed above it in the grid.
• For example, set buy order at $20000 and sell order at $24000, and so on.

3. Actual situation:

In actuality, spot grid trading will be conducted based on market prices, with slightly different principles.

• The market price is $30000, with a lower bound of $20000 and an upper bound of $40000.

• To begin, because the spot grid will be filled with buy orders from the top down, the system will use a portion of your investment to execute buy order at $32000 and $36000 and then place sell order at $36000 and $40000. The remaining investment will be split between the buy orders for $28000, $24000, and $20000, respectively.
• Because $32000 and $36000 are greater than $30000, the buy orders will be filled immediately.
• If the price rises to $36,000 after a buy order of $32000 and $36,000 is filled, the sell order of $36,000 will be executed, and you will earn a price difference of $6000 ($36,000 - $30,000). If the price rises to $40,000, a sell order will be executed at 40,000, and you will earn a price difference of $10000 ($40,000 - $30,000).
• If the price does not rise but falls to $28,000 after filling buy orders of $32000 and $36,000, the buy order at $28000 will be filled, and the system will automatically place a sell order for you at $32000.
• If the price bounces back to $32000 after the buy order at $28000 is filled, a sell order at $32000 will be executed, and you will earn a price difference of $4000 ($32000 - $28000). When your sell order at $32000 is filled, the system will automatically place another buy order for you at $28000.
• If the price bounces back below $32000 and falls to $28000 after the buy order at $28000 is filled, the system will not place a buy order at 28000 because the sell order at $32000 has not yet been filled.
• If the price falls further to $24000, the buy order at $24000 will be filled, and a sell order at $28000 will be placed using the same operation to earn the difference if the price rises to $28000.
• The system does not execute any orders if the market price falls below $ 20000 (the lowest price in the range).
• As a result, The Spot Grid enables you to "buy low and sell high," arbitraging for you in the range you specify.

Trading fees

Trading fees are calculated using the MEXC spot trading rate illustration (https://www.mexc.com/fee). MEXC charges a 0.2% fixed transaction fee to both market makers and market takers. 

How do I verify the created spot grid?

1. Click on [My Strategies] -> [Info].
2. [Strategies in Use] explanation.

• Strategy Info: All information on the current strategy.
• Running: The situation of buy and sell orders that have been filled. 
• Completed: The buy and sell order that have been completed.
• Transfer History: The amount transferred from Spot your account to Spot Grid Trading account.

3. [Strategy in use] description in detail.

• Total Earnings: Grid Earnings Floating PnL
• Grid Earnings: The total profit generated by filled Buy and Sell Order pairs.
• Floating PnL: (Market price of the base currency - price of buying in) * Holding amount of the base currency. 
• Estimated Annual Percentage: (Total earnings/Total investment) / Days of operation * 365 days
• Number of Tradings: The total number of filled buy and sell orders.
• Number of Matches: represents the number of paired orders, which are filled as a pair with a lower priced buy and a higher priced sell order.

*For BTC/USDT, BTC is the base currency and USDT is the quote currency.

How do I determine my earnings?

1. Click on [My Earnings]

How do I terminate a running spot grid?

1. Click on [My Strategies] -> [the red button]

2. Click on [Confirm]

The following considerations are required for the spot grid.

1. The spot grid is trending and will have a market price to open positions at.
2. When the grid is terminated, orders will be placed at the market price. The grid's final return may vary depending on the market price, depth, and other factors.
3. The grid is also risky and is best suited for oscillating markets rather than one-sided markets. When a market is oscillating, spot grid trading will profit from market volatility by automatically buying low and selling high within a given price range.
4. The return may not be higher at the same time as the number of grids increases. A grid is only profitable if the market price stays within the price range you've set. Increasing the number of trades and the profitability of a single grid is the key to increasing returns. Too many grids reduce the spread and number of buys on a single grid, lowering the profitability of a single trade. As a result, a sufficient number of grids is required to maximise returns.
5. The return might not be higher if the range of prices is larger. A price range that is too large will reduce the number of trades, so you will need to experiment with the number of grids and price range settings.
6. You can create and run up to ten robots.
7. Users are not permitted to run bots via the API.
8. The trading bots cannot be created by the sub-account.
9. Currently, only stop-loss and take-profit settings are available for running robots; there is no support for changing parameters or adding additional investment amounts.