Topic: Secrets of traders, practical strategies for millions of profits!

Time: 19:00, July 30

Moderator: Bikan CMO Ruby

Guest Introduction: AlphaMind

On the evening of July 30, 2020, "Bikan Strategy Trading Academy Phase 2" invited professional quantitative team AlphaMind to talk to Bikan CMO Ruby, and exclusively reveal the secrets of grid trading!

AlphaMind is a professional quantitative team. The team members are from top financial institutions in China. They are good at trading strategy research and development. There are already mature trends, grids, reversals and other types and different band strategies in operation, and the actual income exceeds one million .

While Master Li compiled the transcripts of the whole live broadcast for everyone, he also learned the secrets of grid trading. Let’s review it together!

Question 1: What are the advantages of grid trading?

God A: To talk about the advantages of grid trading, let’s start with the introduction of grid. From the opening of BTC in early June to now, BTC has been oscillating and consolidating for nearly two months, and the volatility of the market has only begun to recover since last week. Many trend traders are vulnerable to opening orders in this volatile and grueling market. The profits made in the small band are taken away by multiple losses, and it is difficult to hold the profits in their hands. And this kind of market is the right time for the grid strategy to flex its muscles.

We roughly divide the market into bull market, bear market and shock market. Why is the grid strategy suitable for shock periods?

From the principle of the grid, grid trading can be simply understood as follows: put the price fluctuation range in a set grid, divide the funds into multiple shares, and buy one share every time the price falls. Sell ​​one for every mark up. One buy corresponds to one sell, and only one grid price difference is earned between buying and selling transactions.

Grid trading divides funds into multiple shares and buys in batches, which greatly reduces the requirements for buying points.

Within the set grid interval, the grid trading will fall further and further in, and rise further and further out. Keep buying at low levels, even if you are temporarily in a state of continuous losses, but the overall cost of holding positions is constantly decreasing. Once the market rebounds, the accumulated lower costs will easily generate considerable profits. Moreover, the shares of the transactions in the grid correspond to each other. As long as there is a rebound and the requirements of the grid are met, they will be sold immediately, and the profit of the price difference corresponding to the share can be captured. This is one of its advantages. If the price fluctuates within the range during the shock period, it is basically equivalent to sitting on a profit.

In addition, grid trading is also very friendly to office workers and friends with less time. Grid is a kind of quantization, and it also has the mission of freeing hands. As long as you spend a little time setting up the grid, then there will be a very comfortable trading process, waiting to buy, waiting to sell, it does not take a long time to spend a lot of energy to pay attention to the market trend, and to keep an eye on the market all the time.

Ruby: Yes, it's more of a transaction tool for the grid, and it has a lot of advantages when used well.

God A: This is grid trading. There is no need to predict the short-term trend during the turbulent period, and the trading discipline is simple and executable.

Question 2: What are the secrets of setting parameters for grid transactions in Bikan?

God A: This problem is also the core of operating the grid. Let me briefly talk about the application method of the grid.

The grid strategy generally has the following parameters to be set:

1. Trading range.According to experience, the trading intervals of different varieties are different. The trading range determines the density of the grid, and it is a good solution to divide the trading range reasonably based on historical data. Some formed grid products on the market will have recommended parameters. Novices can use intelligently recommended parameters, which may be more friendly than their own judgment. A commonly used interval setting method is to use the BOLL upper and lower rails of the daily K-line as the upper and lower boundaries of the interval.

2. Number of grids.The denser the grid, the better it can capture small price fluctuations. The more fluctuation grids are captured, the more profits will be made, but it also requires a large amount of funds. The number of grids is a matter of self-weight, mainly referring to the chips in hand.

3. The number of transactions per grid.The issue of the amount of funds is also mentioned above. According to the amount of funds, different grid strategies will have many variants, such as equal-proportion betting and equal-price betting.

Equal proportion betting can ensure that the profit rate of each fund is equal, but as the grid price rises, the profit stop conditions will become higher and higher.

There is no such problem in waiting for price betting, but as the grid price rises, the take-profit conditions will become looser, and the profit rate of each transaction will be lower than that of the low-price grid.

In short, the lower the price, the more you buy, or the higher the price, the more you buy. Typical position management methods include positive pyramid position management and reverse pyramid position management. Of course, if you have the technical ability or have a set of strategies that you insist on, you can refer to and adjust these grid parameters in time.

Question 3: What is the difference between interval grids and infinite grids, and how to use them?

God A: Generally speaking, the delineation of the upper and lower boundaries of the grid will directly affect the utilization rate of grid funds. for example:

In the case of the same principal, the size of the funds allocated to each grid in the three examples A, B, and C is different.

A will be the largest, while C will be the smallest. As a result, when the market fluctuates, A with a narrower range can receive higher grid profits between buying and selling (because the volume of single-cell trading is relatively large).

But the risk of A is that it is easy to run out of the grid range. Because of the large grid range of the two groups B and C, if the fluctuation is not enough, a part of idle funds will be retained, that is, funds that have not participated in the transaction at all.

So this is why the grid profit seen by the infinite grid in the short-term small fluctuations will feel lower than that of the normal grid. The infinite grid sacrifices the strong capital utilization rate of the narrow range, and achieves the characteristics that the price will not rise in the range (however, the principle of pending orders is different from that of the ordinary grid. Here is just an example to let everyone understand the difference between the infinite grid and the normal grid. Differences for normal grids).

To sum up, the interval grid has upper and lower bounds, and the capital utilization efficiency is high, but if you break out of the upper and lower bounds, you need to passively stop loss or take profit. The infinite grid does not need to set upper and lower bounds, but the funds will be spread out, and the utilization rate of funds is relatively low under the same volatility.

Question 4: In order to hedge risks, in the grid trading, can a trading pair open in both long and short directions at the same time?

God A: Hedging risks will also hedge profits. Adding the commission to the exchange is not worth it in the long run.

Question 5: What is the fatal point of the grid strategy and how to overcome it? How to deal with unilateral market?

God A: Grid belongs to the oscillating strategy, and I am more afraid of the emergence of large unilateral market. The emergence of a large unilateral will lead to the continuous increase of positions in the opposite direction and the forced stop loss, or the profit will exceed the range and be forced to stop the profit. This requires us to set the upper and lower boundaries of the grid, timely and strictly stop losses, and control the leverage of the total amount of orders, so as not to be crushed by a big market. Of course, it can also be combined with other trend strategies to do some fund allocation.

Question 6: Can the grid be opened at any time? Or is there a suggested entry and exit timing?

God A: The grid strategy seems to be a hands-off shopkeeper, but as I said just now, when there are fears, it is still necessary to conduct some market analysis, and open positions carefully when there is an obvious trend in the market. As long as you can be sure that you are still in a turbulent period, the timing of entering and exiting the market is not so important, so your timing of entering and exiting the market can be regarded as the overall trend of the entire market.

Ruby: In fact, the trend is very important. Is there any simple technique to help judge the market trend? How should a novice get started?

God A: I usually trade on the right side, and try not to predict the trend in advance.

Ruby: What does right-hand transaction mean?

God A: After the trend comes out, enter the market after a breakthrough.

Question 7: How does God A see the next market trend?

God A: Volatility has slowly recovered recently, and the trend of the market will be stronger in the future. This is what I hope to see.

If the volatility is large enough and the market is active enough, it means that there is gold to be found. As a quantitative team, we rarely predict a clear market trend artificially. We cannot predict the market, so the best way is not to predict the market, and insist on giving It is commendable to exclude subjective interference from the strategic plan that brings benefits by itself.

This is also something that the market and quantification have taught me, and it is also a trading method that I want to recommend to everyone.