What Is the AI Dual Grid Trading Strategy?
Last updated
Last updated
The AI Dual Grid Strategy is a Futures Grid Strategy that can holding long and short at the same time for oscillating market. It is an extension of the AI Grid of uTrading, and can be thought of as two independent AI Grid robots running at 5x leverage and in opposite directions.
When a long robot’s position of a grid reaches a take-profit ratio and is stopped out, the short robot will purchase a grid of short positions at the same price as the long robot’s take profit just now, so that whenever one grid generates a profit in the direction of the current trend, the other grid will lose money and vice versa. This is a AI Dual Grid operation feature.
In this case, each side of the grid should have its own take-profit and stop-loss, managing both grids independently to lock in profits in a volatile market.
This is the profit principle of AI Dual Grid. The AI Dual Grid strategy helps to reach the total profit target faster and minimizes retractions.
Figure 1: Double grid order entries. As shown in the chart below:
Figure 2: Chart showing dual grid buy/sell legs open and closes. As shown in the chart below:
The dual grid is one of the original strategies of the uTrading team. It perfectly solves the three major problems of the classic grid strategy.
1. No profit is generated beyond the grid interval. The dual grid runs the robot in both long and short at the same time, and profits will be generated regardless of whether the price rises or falls.
2. Low fund efficiency. The unilateral grid encounters a continuous reverse market, continues to invest funds to increase positions, and can only wait for the price to return to profit before it can generate profits. The dual grid runs the long and short robots of the same futures asset at the same time. If the price continues to fall, the long robot increases positions, the short robot will continue to close the position to take profit at this time. On the contrary, if the price continues to rise, the short robot increases the position, and the long robot will continue to close the positions to take profits at this time. At the same time, you only need to prepare one piece of funds to increase the position of the robot in one direction, and take one margin risk and get two profit returns. In addition, uTrading’s dual grid strategy will develop its own grid range according to the support resistance level and volatility of different targets, balancing the risk and return ratio.
3. After breaking the price range (the net), it cannot be automatically adjusted in time. uTrading’s dual grid has no upper and lower price, after breaking through the grid on one side, the AI system will recalculate the support and resistance level, invest the initial position again, and track the market profit one by one when the price continues to be unilateral.
1. There is no limit order, and the margin is shared to prevent liquidation.
2. The take profit of each grid is independently calculated and executed, and the profit is divided to improve the liquidity of funds.
3. Two independent long and short grids are considered two separate systems because both have clear profit and selling boundaries.
4. There is a difference in the PnL display in the trading records of uTrading and the exchange, because uTrading calculates the PnL of the grid according to the opening price and closing price of each grid, while the exchange calculates the PnL of each order based on the average price of the position.
5. As a result of running both a long grid strategy and a short grid strategy on an underlying, there is always a brief floating loss on one side, or even both, which is normal performance. The AI Dual Grid is a regression-based strategy and an investment-based strategy that holds risk in order to obtain corresponding profits.
Pros and Cons of AI Dual Grid
Pros:
1. No need to predict the trend of the market. 2. Works well in volatile and ranging markets. 3. Can be very effective – especially if the price moves rapidly within the grid range.
Cons:
1. The grid strategy requires independent settlement of PnL for each order asset, which is different from the way the exchange settles PnL at the average price, resulting in incomprehension and inconvenient reconciliation for traders. 2. Multiple grids mean more complex trading and money management are required. 3. When there is a strong directional trend when breaking the grid interval, there will be a relatively large unrealized loss.
