As the name implies, grid trading is trading in a "net", and the core idea is to do mechanical high throwing and low sucking in the fluctuating market.
The advantage of grid trading is that you don't have to pay attention to the market often, and mechanized operation can avoid investors from being disturbed by emotions or other information.
Grid trading must first set a value center, and then set the same "stalls" above and below the center line, and use the gaps between these stalls to trade in different grades, and the trading points of each stall correspond to each other one by one.
Advantages of power grid transaction
There is no need to judge the timing and reduce the operating pressure. Timing is the difficulty of all technical analysis. In the long run, it is unlikely that anyone can beat the market by timing more than 2000 transactions.
Not afraid of market changes. Market participants and economic environment will change the market, thus making the existing trading system invalid.
Other analysis methods can be added to the grid. Any effective analysis method will increase the effect of grid, such as the judgment of support level and pressure level, and adding these analyses to grid transactions will get twice the result with half the effort.
Because these three advantages are absolutely firm, they attract many people. The real grid trading method is not a short-term trading system.
Disadvantages of power grid transaction
Unilateral market is not suitable for grid trading. When the market falls unilaterally, there is great financial pressure to cover the position. When the market rises unilaterally, it is easy to sell out the chips in your hand. According to statistics, the market trend is in a state of shock for most of the year, and the unilateral trend is only 20-30%.
The utilization rate of funds is not high. If the market trend does not enter the grid position you set, the capital utilization rate may be only 20-30% after one year. For this problem, we can use idle funds to buy current wealth management products and improve the rate of return on funds.