an update for 3L 3S,
it can work well but not with normal grid. this strategy require:
1. same starting price for 3L and 3S
2. no upper/lower limit or predetermined limit.
3. 3 possible ratio to start
– 3.1. 100/0 – 0/100
– 3.2. 100/0 – 100/0
– 3.3. 50/50 50/50
4. stop/close bot when it goes out of range
3 1 – good when price is expected to move in 1 direction. if 3L is going to be bullish 3L will have 100/0 so it will sold its portion as it goes up while 3S will have 0/100 so it will buys as it goes down. vice versa if 3S is expected to bullish. however if 3L is expected to be bullish but it goes bear instead, the strategy will become loss and risky.
3 2 – almost similar with 3.1 but it holds 100/0 for both position. if 3L is bullish it should covers 3S loss but unfortunately, as 3L goes up it sells part of its position so the the profit/loss on both side become unbalanced.
3.3 – this hold a balanced ratio for both position. if 3L goes up it sells its portion and 3S goes down it buys the dip. but the fund would still be unbalanced but it is less risky than 3.1 and 3.2
however for 3.3, as long as price keeps fluctuating the grid profit earned would still be accumulating on both side so it will eventually brings the breakeven price down and in long terms, once the BE is low enough the strategy will make profit.
the only limitation or cons with 3.3 is about it goes out of range, there will be no grid trading happening hence no grid earning.
the only solution to this is to close the position if it goes out of range and start a new one. or, simply have a sufficient grid range for upper and lower limit (ultra wide grid) so despite any price movement, the trade would still be in range.