Complete Guide to Contract Grid Trading: From Basics to Advanced Applications

What exactly is Contract Grid?

Simply put, contract grid trading is an automated trading tool that allows you to systematically buy low and sell high (or vice versa) within a specific price range without constantly monitoring the market.

Unlike traditional spot grid trading, contract grid uses cryptocurrency perpetual contracts, which means you can utilize margin, leverage, and directional trading to significantly improve capital efficiency. The core logic is straightforward:

• Long Grid: Buy when the price falls, sell when it rises, profit from upward volatility
• Short Grid: Sell when the price is high, buy back when low, profit from downward volatility
• Neutral Grid: Deploy both long and short simultaneously to profit from two-way fluctuations

Each grid represents a trading opportunity, and the system automatically executes based on your pre-set logic, requiring no manual intervention.

Comparison of the Three Main Operation Modes of Contract Grid

Some exchanges support two completely different contract grid setups: AI Mode and Manual Mode. Choosing one directly affects your trading experience and control level.

AI Long Bot vs AI Short Bot

AI Long Bot is a native automated trading tool based on historical volatility models and risk stratification strategies, offering three preset levels:

You can view backtested 30-day APY, investment thresholds, and real-time stats before deployment, and adjust leverage (default 5x, up to 125x) and investment amount.

AI Short Bot is a predefined fixed strategy, unable to customize grid logic, range, or spacing. Its advantage is quick entry; the downside is limited flexibility. It displays 7-day return rates (actual profit/loss snapshot over the past week), but this is indicative, not predictive — not a guarantee of future performance.

Recommended Choices:

• Bullish outlook or learning? Use AI Long for guidance and flexibility
• Want shorting but don’t want to design yourself? Use AI Short, but accept preset logic

Manual Mode: Full control of your trading robot

Manual mode is the true customization paradise. You can tailor the grid structure based on market conditions, personal risk preferences, and technical skills. Supports three directions:

Long Setup: Suitable for bullish or expected rebound scenarios, profiting from upward movements

Short Setup: Suitable for bearish or correction phases, turning declines into structured re-entry opportunities

Neutral Setup: Bidirectional capital allocation, running both long and short grids simultaneously, ideal for highly uncertain or sideways markets

Core Configuration Parameters for Manual Contract Grid

To successfully deploy a manual grid, you need to understand these key parameters:

1. Price Range and Number of Grids

Define the upper and lower limits of the trading robot. This determines the volatility range it can capture.

Trade-offs:

• Narrow range = high trading frequency, but prone to failure if price breaks out
• Wide range = covers larger swings, requires more capital, and may reduce trade frequency

Grid count (between 2-500) determines the density of each interval. More grids = more frequent trades, but higher fee costs.

2. Grid Spacing Method

Arithmetic Spacing: Equal price difference between grids (e.g., every $100), suitable for high-priced or stable assets

Geometric Spacing: Grids spaced by a fixed percentage (e.g., 1% per grid), suitable for highly volatile or low-priced assets

3. Leverage Multiplier

Supports up to 125x leverage, but must choose based on price range, directional bias, and risk appetite. Higher leverage = higher potential returns but also higher risk, with closer liquidation distance.

Advanced Trading Controls: Embedding Risk Management into the Process

These features make your contract grid smarter and safer:

Activation and Stop Conditions

Immediate Trigger: Start executing as soon as the grid is established

Price Trigger: Wait for the market to reach a specific price before activating, suitable for strategic timing

RSI Trigger: Activate only when RSI reaches certain conditions (e.g., RSI<30 oversold or >70 overbought)

Bollinger Band Trigger: Activate based on volatility channel behavior, especially suitable for ranging markets

Similarly, you can set stop conditions — based on RSI exit, Bollinger Band exit, or manual stop.

Moving Grid

Dynamically adjusts the entire grid upward based on an uptrend, maintaining spacing while extending the robot’s lifespan. Especially suitable for trend continuation setups.

Take Profit / Stop Loss (TP/SL)

Set absolute exit boundaries (not percentages):

• Take Profit: Automatically stop after reaching a profit target, reinforcing profit discipline
• Stop Loss: Halt when losses exceed a threshold, crucial for risk control

Slippage Control

Define acceptable price deviation during execution:

• 1%: Strict control, suitable in high liquidity conditions
• 2%: Moderate flexibility, balancing execution and precision
• Unlimited: Use cautiously, especially in choppy markets

Unrealized Loss Buffer

Allocate part of the capital as a margin buffer, especially important for wide-range grids or high leverage. It won’t be actively used unless the price approaches boundaries.

Profit Auto Transfer

Automatically transfer realized profits to the main account immediately, ensuring profits are not reinvested into the next round. Strengthens capital discipline.

Auto Margin Top-up

Automatically replenish margin from spot account when margin ratio reaches a high-risk threshold, preventing early liquidation. But note, extreme volatility may surpass this safeguard.

Estimated Liquidation Price

The platform calculates an estimated liquidation price assuming all grid orders are filled. This is a key reference for understanding your risk exposure.

• Long Mode: Shows the lowest liquidation price after all long orders are filled
• Short Mode: Shows the highest liquidation price after all short orders are filled
• Neutral Mode: Provides two separate liquidation prices, allowing you to monitor long and short risks independently

When to Use Contract Grid? When to Avoid?

Best Timing for AI Grid

When market direction is clear, AI grid is ideal for quick automated deployment. Use long in a stable upward trend, short during short-term dips.

Must Monitor:

• Leverage and APY/returns
• Estimated liquidation price
• Whether market still fits the trading robot’s assumptions

Best Scenarios for Manual Grid

✅ Moderate to high volatility sideways oscillation → Use neutral mode, trade both sides

✅ Clear upward/downward trend → Deploy long or short along the trend

✅ Markets with predictable technical levels → Combine Bollinger Bands, RSI, price thresholds

Situations to Avoid

❌ Low liquidity trading pairs → Large slippage, difficult to execute full grid orders

❌ Sudden macro crashes or rebounds → Robot response may lag, risk of forced liquidation spikes

❌ Stable, low-volatility, non-directional markets → Few grid orders executed, costs accumulate without profit

Risk Management Checklist

Before deploying any contract grid, ask yourself:

Does leverage match market volatility? In volatile markets, high leverage drastically shortens the distance to liquidation. Only proceed if you’re prepared for the risk; otherwise, stay conservative.

Are grid spacing and price range reasonable? Ensure arithmetic/geometric spacing aligns with asset behavior, and the range covers potential swings without over-investing capital.

Is the margin buffer sufficient? Use reserved funds and auto top-up to extend robot lifespan, but extreme volatility can still bypass safeguards.

How will profits be handled? Choose to HODL (reinvest profits) or auto-transfer (protect capital). One accumulates risk, the other is conservative.

Are estimated liquidation prices within safe bounds? Especially in neutral mode, monitor both prices; intervene if either approaches critical levels.

Quick FAQs

Can contract grid be profitable? Yes, especially in volatile or ranging markets. Automated buy low, sell high can generate steady returns. Profitability depends on configuration, leverage, risk management, and market conditions. Trends or high volatility can increase loss risk.

Core difference between contract grid and spot grid? Contract grid uses perpetual contracts with margin, leverage, and directional trading to amplify capital efficiency. Spot grid only uses actual assets, with lower risk but limited returns.

How to minimize liquidation risk? Use reasonable leverage, sufficient grid width, reserve unrealized loss buffers, and monitor estimated liquidation prices. No absolute guarantee, but these tools significantly reduce risk.

In simple terms, when is manual mode best? When you understand market structure, know your robot’s limits, and can review and adjust regularly. Treat it as a disciplined trading framework, not a set-and-forget automatic profit machine.