What Is a Contract Grid Strategy?
A contract grid strategy is an automated trading approach designed to buy low and sell high within predefined price ranges for perpetual contracts. Users simply set:
- Upper price limit (ceiling)
- Lower price limit (floor)
- Number of grid divisions
The system then calculates optimal entry/exit points for each sub-grid, automatically placing orders to capitalize on market volatility. Currently supports all USDT-margined crypto contracts (with coin-margined contracts coming soon).
👉 Discover advanced grid trading tools on OKX
When to Use Contract Grid Trading
This strategy excels in sideways markets with prolonged price oscillations. Three grid variants accommodate different market conditions:
- Bull Grid - Only opens/closes long positions (ideal for upward-trending ranges)
- Bear Grid - Only opens/closes short positions (optimal for downward trends)
- Neutral Grid - Places short orders above current price and long orders below (best for non-directional volatility)
Step-by-Step Guide to Creating a Grid Strategy
3.1 Setup Process
- Access OKX’s web or mobile platform → Select "Strategy Trading" → Choose "Contract Grid"
- Input parameters manually or use smart recommendations → Allocate funds
- Monitor active strategies under the "Strategies" tab
- Withdraw profits or stop the grid anytime
3.2 Key Parameters Explained
Creation Modes:
- Manual: Customize based on market analysis
- Smart: AI-optimized parameters using 7-day backtesting
Core Settings:
- Price Range: Strategy pauses outside min/max thresholds
- Grid Count: Determines order density (e.g., 50 grids between $50K-$100K)
- Leverage: Up to 5x (higher risk = greater potential returns)
- Initial Capital: Isolated from main trading account
Order Types:
- Arithmetic Grid: Fixed price intervals (e.g., $1, $2, $3)
- Geometric Grid: Percentage-based intervals (e.g., 1%, 2%, 4%)
Risk Management:
- Stop-loss/take-profit triggers
- Estimated liquidation prices for long/short positions
- Real-time leverage monitoring
3.3 Practical Example (BTC/USDT)
Configuration:
- Grid Type: Bull
- Range: $50,000 - $100,000
- Grids: 50 (arithmetic)
- Leverage: 2x
- Capital: $5,000
- Initial Position: Enabled
Execution Flow:
- System places limit buy orders at $50K-$60K and sell orders at $62K-$100K
- As price drops below $60K, buys trigger → auto-places sell orders $1K above entry
- Rising prices execute sells → rebuys at lower thresholds
- Cycle continues to harvest volatility profits
Critical Considerations
- Price Breaches: Strategy halts if market exits your range - unmanaged positions may face liquidation
- Capital Allocation: Grid funds are locked separately - monitor overall account exposure
- Market Halts: Automatic termination during delistings or exchange outages
FAQ Section
Q: How does grid trading differ from spot trading?
A: Grids automate recurring transactions within set parameters, while spot trading requires manual execution per trade.
Q: What’s the optimal grid count for volatile assets?
A: 20-50 grids typically balance frequency and profit per transaction. Test different counts via paper trading.
Q: Can I modify an active grid strategy?
A: Only stop-loss/take-profit levels can be adjusted post-launch. Other changes require restarting.
👉 Start grid trading with OKX’s low-fee structure
Q: How are fees calculated in grid trading?
A: Each completed buy-sell cycle incurs standard taker/maker fees based on your VIP level.
Q: What happens during extreme volatility?
A: Gaps between orders may cause missed opportunities or increased slippage during flash crashes/pumps.