Hong Life CalculatorsUnderstanding the grid trading profit calculator — concept and principle
A grid trading bot splits a price range into levels, buys each time the price falls to a level and sells one level higher when it rises again. This calculator shows how much one completed buy-and-sell cycle earns after fees, how much capital sits in each grid, and how many cycles it takes to earn 10% on your investment. Use it to choose a sensible range and number of grids before starting a bot.
How it is calculated
- Geometric grid: each level is the previous one × r, with r = (upper ÷ lower)^(1 ÷ grids). Grid step = r − 1, the same percentage everywhere.
- Arithmetic grid: each level is (upper − lower) ÷ grids apart in price, so the percentage step is larger near the bottom and smaller near the top.
- Profit per grid = step − 2 × fee, because both the buy and the sell pay a fee.
- Capital per grid = investment ÷ grids. Profit per round trip ≈ capital per grid × profit per grid.
- Round trips for 10% = 0.10 × grids ÷ profit per grid, rounded up.
The principle
A grid harvests volatility rather than trend. Every time the price oscillates across one level, the bot buys low and sells one step higher, locking in the step. Geometric spacing keeps that percentage equal across the range, which suits assets that move in percentage terms. The more grids you use, the more often cycles complete, but each step gets thinner, and once the step falls below two fees every cycle loses money.
Worked example
- Inputs: range 50,000 to 70,000, 20 grids, investment 10,000, fee 0.1% per side, geometric.
- r = (70,000 ÷ 50,000)^(1/20) = 1.016966, so the grid step is 1.697%.
- Profit per grid = 1.697% − 2 × 0.1% = 1.497%.
- Capital per grid = 10,000 ÷ 20 = $500.00; profit per round trip ≈ 500 × 0.01497 = $7.48.
- Cycles for 10%: 0.10 × 20 ÷ 0.01497 = 133.6, rounded up to 134.
How to read the result
Aim for a profit per grid comfortably above zero, often several times the fee, so slippage does not wipe it out. The cycle count shows how much sideways movement you need: 134 completed cycles across the range is a lot unless the market is choppy. A wide range survives bigger moves but lowers how often each grid fills.
Common mistakes
- Using so many grids that the step is close to or below the round-trip fee.
- Ignoring what happens outside the range: below the bottom you hold coins that keep falling, above the top you hold only cash and miss the rally.
- Treating grid profit as total profit while the coins held have an unrealised loss.
Frequently asked questions
How many grids should I use?
Enough that the price crosses levels often, but few enough that each step stays well above twice the fee.
Geometric or arithmetic grid?
Geometric suits wide ranges and volatile assets because every step is the same percentage; arithmetic suits narrow ranges.
Is grid trading risk-free?
No. In a steady downtrend the bot keeps buying and ends up holding a falling asset.
Sources: Binance Support, What Is Spot Grid Trading and How Does It Work.