[Spot Grid] What’s the Difference Between Arithmetic and Geometric Grid?

In Spot Grid, Arithmetic Grid and Geometric Grid are two core methods for setting grid spacing.
The fundamental difference lies in how price intervals between grids are calculated, which directly affects order distribution, trading frequency, profit per trade, and asset suitability.
Below is a detailed comparison covering key differences, examples, and usage scenarios.

1. Core Differences Between Arithmetic and Geometric Grids

(1) Different Price Gap Calculation Logic

This is the most essential distinction that leads to all other differences.

• Arithmetic Grid:
  Each grid level is separated by a fixed price amount, regardless of the token’s current price.
  Example: If the gap is set to 200 USDT, the distance between two adjacent grids is always 200 USDT — whether the price is 30,000 USDT or 28,000 USDT.
  Formula: Previous Grid Price ± Fixed Amount.
• Geometric Grid:
  Each grid level increases or decreases by a fixed percentage, calculated from the previous grid’s price.
  Example: With a 10% step ratio, if the previous price is 30,000 USDT, the next grid is 30,000 × (1 10%) = 33,000 USDT;
  if the previous price is 27,000 USDT, the next grid is 27,000 × (1 10%) = 29,700 USDT.
  The absolute gap widens as the price rises.

(2) Different Order Price Distribution

Due to the different calculation logic, the order distribution across the preset price range varies:

• Arithmetic Grid:
  Orders follow an arithmetic sequence, evenly spaced across the range.
  Example: For a range of 30,000–31,000 USDT with 5 grids (4 gaps) and a 250 USDT step, orders will be placed at:
  30,000 / 30,250 / 30,500 / 30,750 / 31,000 USDT.
• Geometric Grid:
  Orders follow a geometric sequence, with smaller gaps at lower prices and wider gaps at higher prices.
  Example: For a range of 27,000–35,937 USDT with 4 grids (3 gaps) and a 10% ratio:
  27,000 / 29,700 / 32,670 / 35,937 USDT.
  The gap increases from 2,700 USDT to 3,267 USDT as prices rise.

(3) Different Trading Frequency

Trade frequency depends on how often price movements trigger orders.

• Arithmetic Grid:
  Since the gap is a fixed amount, trading frequency remains consistent as long as price volatility stays within a similar range.
  Example: If a token fluctuates by 500 USDT and the grid gap is 250 USDT, each swing can trigger two trades — regardless of price level.
• Geometric Grid:
  In lower price zones, gaps are smaller, so trades trigger more frequently.
  In higher zones, wider gaps require larger price swings to trigger trades, resulting in fewer trades.

(4) Different Profit per Trade

Ignoring transaction fees, the profit per grid depends on the price gap amount.

• Arithmetic Grid:
  Profit per trade is fixed since the price gap is constant.
  Example: A 250 USDT gap yields 250 USDT profit each cycle, no matter the price level.
• Geometric Grid:
  Profit per trade increases as prices rise because high-price gaps are larger.
  Example:
  • 27,000–29,700 USDT → profit = 2,700 USDT
  • 32,670–35,937 USDT → profit = 3,267 USDT

(5) Different Asset Suitability

• Arithmetic Grid:
  Best for tokens with low volatility and lower unit prices (e.g., 100–200 USDT).
  A fixed price gap ensures consistent trading and avoids overtrading due to small fluctuations.
• Geometric Grid:
  Best for high-priced and high-volatility assets such as BTC or ETH.
  Wider spacing at higher prices allows the strategy to capture larger moves while avoiding excessive trades in strong trends.

2. How to Choose Based on Market Conditions

When selecting between Arithmetic and Geometric Grid, consider the token’s price characteristics, volatility, and your risk preference.

✅ Use Arithmetic Grid When:

• The token’s price fluctuates within a stable, narrow range (e.g., ±5–10 USDT).
• The token has a low price (1–100 USDT).
• You prefer steady, predictable returns and frequent trades.
  Example: Stablecoin pairs like USDC/USDT often move within 0.99–1.01 USDT — an arithmetic grid with a 0.005 USDT gap can repeatedly capture small spreads.

🚀 Use Geometric Grid When:

• The token shows strong volatility or large price swings (e.g., BTC moves 5,000 USDT per day).
• The token has a high price (e.g., BTC, ETH).
• You pursue higher single-trade profits and can accept lower trade frequency.
  Example: In an early bull run where BTC rises from 30,000 USDT to 40,000 USDT, a 10% geometric grid can capture significant gains at 33,000, 36,300, and 39,930 USDT levels.