Is grid trading with an annualized rate of return of 96% reliable?

Hello, here is the 8-minute blockchain. Today is Friday, February 5, 2021. Recently, Huobi launched a grid trading strategy. I promised you a grid trading course half a year ago, and I finally do it today. It came out, have you never done it before? It is because I don’t trust some small exchanges. Huobi has not opened grid trading, and the profit of grid trading is very considerable, and the new gravity is very strong. I am afraid that you will sneak to the small exchanges after I finish the program. , As a result, I just made money and prepared to withdraw cash, but the exchange ran away, and I was happy for nothing. I was kind, but turned into a bad person. Today, Huobi finally launched grid trading transactions, so we can learn from Huobi by the way Click on the grid transaction.

Let me show you a picture first. This picture is Huobi.com. The annualized expected return of grid trading in the last 7 days is as high as 96.62%, isn’t it very tempting?

However, Huobi also made a risk warning:

This rate of return is a suggested parameter for the operation of the strategy given by the system, and it is not a promise or guarantee of real returns. When it comes to guaranteed returns, this reminds me of a question from a classmate we interacted with this week;

One: May I ask the teacher that there is a robot quantification app authorized by the Huobi API, and the monthly profit is 30%. Is it credible? Also, if this app is evil, will there be any way to harvest the following investors?

Answer: If there is a 30% profit per month, Li Lin from Huobi will definitely participate in this project in person, use his own account, buy a robot on his own exchange, and first use 100 million assets to quantify. 1 month later it will become 130 million, 2 months later it will become 169 million, 1 year later it will become 2.3 billion, 2 years later it will become 54.2 billion, 3 years later it will become 1,264.6 billion, and 5 years later it will become 1,264.6 billion. Lin, calculate how much money Li Lin can make. All the money in the currency circle is not enough for him.

Obviously, it is impossible to make a 30% profit on a monthly basis. Your quantitative robot is likely to make a profit by selling software, and then you sell it to others for profit.

Selling this robot dog, the quantitative robot is also a sub-agent, which is quite expensive.

Two: So, is there any normal and formal quantitative trading strategy? The answer is yes, that is the topic we are going to talk about today: grid trading

1: First look at: What is a grid strategy?

The grid strategy is a trading strategy in which users can automatically buy low and sell high in a specific price range through a program. The grid trading robot will assist the user to strictly implement the trading strategy of buying low and selling high set by the user.

Grid trading is currently the most reliable quantitative trading in my opinion!

2: Then, grid trading will definitely make money? Can you guarantee 30% monthly conversion?

Obviously not, because he is reliable. Any reliable method of making money cannot guarantee that you will definitely make money. Any method that promises you will definitely make money must be unreliable? For example, when buying insurance and financial management, some people say that you will definitely make money. For example, when you buy financial products from a bank, some people tell you that you will definitely make money. In fact, you are always losing money, because the central bank prints 10% of money every year, and bank financial products rarely exceed the annualized rate. 10%.

3: What market is suitable for the grid strategy?

The core of the grid strategy is "sell high and buy low". According to past experience, the grid strategy is more suitable for volatile market, unilateral rise and unilateral fall will bring you corresponding losses or make a lot of less money.

Fortunately, the market is volatile more than 60% of the time, and grid trading is suitable for volatile markets.

4: What is the principle of grid trading? Under what circumstances will you lose money?

The essence of online trading is: high-frequency buying low and selling high. Within the price range you set, buy low and sell high, and lose money: if the currency price keeps falling, you will lose money, because he will only execute the buying action. If the lowest price you set is still falling, you will lose money. The situation of making less money is: the price of the currency keeps rising, and when it reaches the highest point you set, the currency is sold off. Make less money. What if you lose money and sell it? The price range is widened, for example, you set a price range of 3,000-100,000 US dollars. The price range of Ethereum, you set it between $100 and $10,000, but doing so will waste your capital utilization, which will lead to a decrease in your total rate of return.

Explanation of terms: Highest price in the range: the upper limit of the order price. When the price exceeds the highest price in the range, the system will no longer execute the order operation outside the grid range (the highest price in the range must be greater than the lowest price in the range);

The lowest price in the range: the lower limit of the order price. When the price is lower than the lowest price in the range, the system will no longer execute the order operation outside the grid range (the lowest price in the range should be less than the highest price in the range);

Grid quantity: Divide the interval between the highest price and the lowest price into corresponding equal parts, and place an order when the price reaches; input amount: the amount of digital assets that the user will invest in the grid strategy;

Take-profit price: When the price rises to a certain price, the strategy will be automatically stopped, and the system will sell the base currency bought through the strategy as the pricing currency and transfer it to the currency account. (The take profit price should be higher than the highest range);

Stop loss price: When the price drops to a certain price, the strategy will be automatically stopped, and the system will sell the base currency bought through the strategy as the pricing currency and transfer it to the currency account.

Today’s grid trading, let’s introduce it first. I just took 5,000 US dollars from Huobi today to make a grid trading strategy. One is the strategy automatically recommended by the Huobi system, and the other is the strategy I set up myself. , Tomorrow I will use a video to demonstrate to you the specific benefits of these two strategies.