Introduction to Futures Grid 2.0

1. What is Futures Grid?

Futures Grid is perfect for navigating volatile markets, helping you lock in profits from trends and price swings. The tool is suitable for short, medium, and long-term investment. Unlike spot grid trading, which can feel limited due to low capital efficiency and one-directional trading,

2. Strengths of Futures Grid

If the market is in a sideways trend, you can prioritize using a futures grid bot. Here are the advantages:

2.1 High Capital Efficiency: Leverage amplifies your trading power, allowing you to maximize the use of your funds effectively.

2.2 Versatile Market Compatibility: Long bots are best for upward-trending markets with fluctuations; short bots are suitable for downward-trending, oscillating markets; neutral bots are ideal for uncertain price movements in a defined range.

2.3 Reduced Risk: The bot's position management reduces operational risks. Initial positions can be as low as 50%, and you can strategically add or reduce positions to manage risk effectively. Using a futures grid bot helps minimize potential losses compared to the higher risks associated with futures trading.

2.4 Hands-Free Operation: You set the parameters, and the bot handles the execution.

  You save time while staying adaptable to market changes by applying appropriate stop-loss and take-profit measures.

3. Types of Futures Grid Bots

The core of a futures grid bot is to profit from "range-bound arbitrage," making it an ideal tool for markets expected to experience prolonged oscillations within a specific range. Skilled traders can leverage the bot with a directional strategy by predicting market trends. For instance, if the market is expected to rise, a long grid bot can be deployed; if the market is expected to fall, a short grid bot is more suitable. For traders who find market predictions challenging or lack extensive experience, a neutral grid bot is a safer choice. It allows for potential profits regardless of whether prices rise or fall, as long as the price remains within the defined range. See details below:

• Long Futures Grid Bots: For predicted price oscillations within an upward trend. The bots start with long positions, sell high, and rebuy low.
• Short Futures Grid Bots: For predicted price oscillations within a downward trend. The bots start with short positions, buy low, and resell high.
• Neutral Futures Grid Bots: For uncertain market directions. Profits are made from price movements within a pre-defined range. They may generate both long and short positions.

4. How to Create a Futures Grid Bot with Parameters Explained

4.1 How to create a futures grid bot

• Manual: Define the price range, grid intervals, leverage, and other parameters based on your analysis. Poloniex allows you to activate bots by setting a certain price as a trigger.
• AI Parameters: Use recommended parameters for futures grid trading. (These parameters are generated by calculating the most suitable parameters for the current market based on a smart algorithm combined with backtesting of the past 14-day market data.)

4.2 Parameters explained

• Price Range: Formed by the pre-determined highest and lowest price. The bot will buy low and sell high as the price fluctuates within the scope.
• Base Price: The lower limit of the price range for your futures grid bot. No orders will be placed when the last price or mark price is lower than the base price.
• Cap Price: The upper limit of the price range for your futures grid bot. No orders will be placed when the last price or mark price is higher than the cap price.
• Number of Grids: Also called "grid quantity," where the price range is equally divided into corresponding portions for the bot to place orders accordingly. For example, let's set a price range of 100-400 USDT using the arithmetic grid mode with 3 grid levels. The range would then be divided into three smaller intervals: 100-200 USDT, 200-300 USDT, and 300-400 USDT.
• Leverage: Leverage used in futures trading. The maximum leverage varies for different trading pairs.
• Investment (Margin): The amount of assets invested in Futures Grid. Investment (margin) = Initial margin Trading fees Reserved assets. To ensure your Bot operates smoothly, the system reserves a portion of your investment to cover funding rate changes.
• Arithmetic: Each grid has an equal price difference. (e.g. 1, 2, 3, and 4)
• Geometric: Each grid has an equal price difference ratio. (e.g. 1, 2, 4, and 8)
• Stop Top/Bottom Price: Your futures grid bot will be automatically terminated when the market price reaches the stop top/bottom price you set.
• Take Profit Price: The grid will start to close and the position will be closed at the market price, when the last price or mark price reaches your take profit price.
• Stop Loss Price: The grid will start to close and the position will be closed at the market price, when the last price or mark price reaches your stop loss price.
• Trigger Price: The bot will run once the last price or mark price reaches the trigger price you set. If no trigger price is set, the bot will default to running immediately after creation.
• Total Investment: The sum of your cumulative investments. Total investment = Investment (margin) Margin added - Margin removed
• Est. Liquidation Price (long): The estimated liquidation price when the number of buy orders reaches the limit in the one-sided market with an upward trend.
• Est. Liquidation Price (short): The estimated liquidation price when the number of sell orders reaches the limit in the one-sided market with a downward trend.
• Est. Liquidation Price: The estimated liquidation price of your current position in Futures Grid. Your position will be liquidated when the last price reaches the liquidation price.
• Total Matched Trades: Total fully filled orders that were matched since the Trading Bot run.
• 24h Matched Trades: Total fully filled orders that were matched in the last 24 hours.
• Enter Rankings: Once enabled, your Trading Bot will be ranked in the Recommended section. If it achieves a top PnL, your parameters will be available for other users to copy.
• PnL/Grid: The estimated PnL percentage per futures grid, with trading fees deducted.
• The total profit and loss since your bot ran, i.e. the sum of matched PnL, unmatched PnL, and total funding fees.
• Matched PnL: The realized profit of filled grid orders that are matched by one buy order and one sell order.
• Unmatched PnL: The unrealized profit and loss of filled grid orders that are not matched, calculated based on the difference between the last price and the average fill price of unmatched orders.
• Backtest PnL%: This reflects the previous backtest PnL percentage and does not guarantee future earnings.
• Available Balance: The amount of removable margin from your Cross USDT-M Futures account, excluding futures trial bonuses.
• Max margin removable = min(Account balance - Margin required by the bot, Account balance Unrealized PnL - Margin required by the bot)

5. How a Futures Grid Bot Works: Scenario

Let us choose a Long Futures Grid for BTCUSDT Perpetual as an example.

5.1 Set parameters

Grid Type: Long grid

Cap Price: 60,000 USDT

Base Price: 40,000 USDT

Number of Grids: 5 grids

Amount Per Order: 0.001 BTC

Current BTC Price: 51,000 USDT

Grid Mode: Arithmetic

Leverage: 2x

5.2 The bot in action

Phase 1: Initial orders

According to the parameters above, the grids for order placement are 40,000 USDT, 44,000 USDT, 48,000 USDT, 52,000 USDT, 56,000 USDT, and 60,000 USDT. Order placement is subject to the following rules: no orders will be placed at prices approaching the current market price; if the market has good depth, buy orders will be placed above the current market price to establish positions. Subsequently, sell orders will be placed at the next higher grid level to close these positions and lock in profits. Therefore, market orders at 56,000 USDT and 60,000 USDT will be placed and executed immediately, creating a position of 0.002 BTC. And a sell order will be placed immediately afterward.

Phase 2: Order execution and placing

Assume BTC falls to 48,000 USDT

The buy order at 48,000 USDT is executed, and then a sell order is placed at 52,000 USDT, as it is higher than the market price.

Your position increases to 0.003 BTC. See details below:

Phase 3: Order matching for profits

Assume BTC rises to 52,000 USDT

The buy order at 52,000 USDT is executed, which matches the sell order executed in Phase 2 for a profit. The profit obtained is calculated as follows: 52,000 * 0.001 - 48,000 * 0.001= 4 USDT (fees not deducted). A new buy order is then placed at 48,000 USDT.

Your position decreases to 0.002 BTC. See details below:

Special Scenario - Exceeding Price Range: If the market price moves outside your specified range, you can choose to either terminate your bot or wait for the price to return to your set range. If you choose to terminate, all open orders will be canceled, and your position will be closed at the current market price.

5.3 More scenarios

1) Long Futures Grid Scenario

2) Neutral Futures Grid Scenario

6. How to Set Up a Futures Grid Bot

How to Get Started with Futures Grid (Web)

How to Get Started with Futures Grid (App)

7. Types of Future Grid Bot Termination

7.1 Creation failure

Bot creation fails when there is a lack of market depth or insufficient margin.

7.2 Manual termination

You can manually click Terminate to end your bot and close your position at the market price. Slippage may occur in the market of low depth.

7.3 TP/SL termination

Your grids will start to close and your position will be closed at the market price, when the last price or mark price reaches either your take profit or stop loss price.

7.4 Stop top/bottom price termination

The grid bot will be terminated and the position will be closed at the market price, when the last price or the mark price reaches the stop top price or the stop bottom price.

7.5 Terminations due to risk management

Your bot could be terminated for the following reasons: Auto deleveraging, liquidation, removal of the trading pair, reaching the maximum position size limit, reaching the maximum grid quantity limit, order matching failure, and negative equity.

Note: When your Trading Bots account balance is negative, please contact customer service for assistance.

8. Notes

8.1 When creating a Futures Grid bot, you need to read and agree to the Futures Grid Risk Disclosure, the Poloniex Futures Trading Service Agreement, and all relevant agreements in relation to the use of the Platform.

8.2 If the current market price has already triggered stop conditions you set like TP/SL or stop top/bottom price, the bot creation will fail. You'll need to modify the parameters and attempt the creation again.

8.3 When market prices move beyond the price range you set, the bot will pause operations. If prices continue trending outside this range without returning, your open positions might face unrealized losses or even liquidation. To manage this, it’s advisable to set reasonable stop top/bottom prices to limit potential losses.

8.4 Assets from your USDT-M Futures account will be transferred to your Trading Bots account after creating a Futures Grid bot. The bots in your Trading Bots account are isolated, and positions do not affect each other. Upon bot termination, the assets will automatically return from the Trading Bot account to the USDT-M Futures account.

8.5 AI parameters are for reference only. They are based on historical data and do not guarantee future performance. Always be mindful of the risks involved.