What is Leveraged Reverse Grid
First of all, let’s review the Reverse Grid. The principle of the Reverse Grid is to continuously buy low and sell high in a certain price range to achieve the purpose of increasing the number of tokens. The Leveraged Reverse Grid is a tool that enlarges the principal through leverage on the basis of the Reverse Grid to amplify the income of the grid. It provides 1.2X-5X leverage options, and you can use the tools to achieve higher returns.
For example, suppose you have 1 ETH in your hand, and you think the price of ETH is about to start to fall, then you can use the Leveraged Reverse Grid to amplify your earnings. At this time, you choose 2X leverage and invest 1 ETH into the Leveraged Reverse Grid strategy, and pionex will lend you 1 ETH, so that your Leveraged Reverse Grid strategy is the total investment of 2 ETH. But you actually only invested 1 ETH, but the grid revenue was generated from 2 ETH, so you realized twice the grid profit.
How to use Leveraged Reverse Grid
First, please open the pionex.com website, find the “Leveraged Reverse Grid” on the right side of the interface, and then click the “CREATE” button on the right to enter the bot parameter setting page.
- Lower price: When the currency price is lower than the lower price of the interval, the bot will no longer execute orders outside the price interval.
- Upper price: When the currency price is higher than the upper price of the interval, the bot will no longer execute orders outside the price interval.
- Grids: Divide the range between the upper price of the interval and the lower price of the interval into corresponding shares.
- Borrowable fund: The total amount of funds available for loan on the current platform.
- Current daily interest: The real-time lending rate in the current market.
- Estimated liquidation price: If the currency price drops to the estimated liquidation price, the bot will perform forced liquidation to control risks.
- Trigger price: When the currency price reaches this price, the bot order is triggered to be created.
- Stop loss: When the currency price rises to this price (the number of base currencies is decreasing), the bot order will be automatically closed and all the quoted currencies held by the bot will be converted into the base currency. (For example, when the Reverse Leveraged Grid trades the ETH/USDT trading pair, the order triggers a stop loss, and the bot will convert all USDT into ETH)
- Take profit: When the currency price drops to this price (the number of base currencies is increasing), the bot order will be automatically closed and all the quoted currencies held by the bot will be converted into the base currency. (For example, when the Reverse Leveraged Grid trades the ETH/USDT trading pair, the order triggers take profit, and the bot will convert all USDT into ETH)
- Slippage control: Through parameter setting to control the deviation of the initial open final trading average price and the price at the time of placing the order within a certain percentage range. (Due to the large volatility of the crypto market, when traders are trading, the final trading price is often inconsistent with the price when the order is placed. At this time, you can control the slippage by opening the order limit price)
- Grid mode-Arithmetic: when creating a grid strategy, the price interval of each grid of the arithmetic grid is equal (for example, 1, 2, 3, 4)
- Grid mode-Geometric: When creating a grid strategy, the price range of each grid of the geometric grid is proportional (for example, 1, 2, 4, 8)
Description of “Base Currency” and “Quote Currency“ : Take the most common trading pair “ETH/USDT” as an example. Here we generally refer to the token “USDT” on the right side of the trading pair as “Quote Currency”, and the token “ETH” on the left is called “Base Currency”.
Explanation of bot Order Terms
- Investment: The amount of currencies invested when the grid bot is created
- Total profit: Grid profit + Unrealized profit
- Grid profit: Bots buy low and sell high and profit from arbitrage
- Unrealized profit: (Current price-purchase cost) * number of currencies of bot held
- Grid annualized: [(Grid profit/Investment)/(Lasting time/365)]*100%
- Total annualized: [(Total profit/Investment)/(Lasting time/365)]*100%
- Current price:The current real-time price of the token
- Price Range:The price range in which the bot runs
- Liquidation price:Once the currency price reaches this price, the assets held by the bot will be liquidated and the borrowed assets will be returned
Set up the case
Select the ETH/USDT trading pair, set the lower limit of the grid interval price to 1000 USDT, set the upper limit of the interval price to 10000 USDT, set the number of grids to 50, choose the arithmetic mode of the grid order mode, the leverage of 3, and invest 1 ETH , Then the total investment composition of the bot will be “own 1 ETH + borrowed 2 ETH”, and 3 ETH will be used to run the bot.
The bot will operate in the price range of 1000USDT~10000USDT. The range is divided into 50 equal parts. Each block buys and sells 0.06 ETH, and constantly buys low and sells high and arbitrage in the price range, eventually allowing you to earn more ETH .
- Current daily interest: Because it is borrowing funds from the platform to create the bot, there will be interest on the borrowed money, which is calculated based on the current daily interest rate. After setting the order parameters, the interest to be paid can be calculated by the amount of borrowed funds and the current daily interest rate. Since the lending interest rate will dynamically change according to the supply and demand relationship between the borrower and the lender, the daily interest rate here is floating, and it will be updated every hour.
- Estimated liquidation price: Since the Leveraged Reverse Grid is used for trading through borrowed funds + own funds, you need to ensure that the margin under your position is sufficient to avoid the risk of liquidation caused by market fluctuations. After the estimated liquidation price is triggered, the bot order will be automatically closed, and you will lose your principal. Therefore, you must pay attention to the estimated liquidation price before opening an order.
- Before you fill in the investment amount, you need to set the leverage multiple. After setting, your maximum investable fund will be enlarged according to the leverage you set, which is equal to your own funds + borrowed funds. In other words, if you choose a triple leverage, one third of this is your own funds, and the other two thirds are borrowed funds.
- You can increase the liquidation price by adding a margin, and the grid profit generated by the bot will also be automatically added to the margin to increase the liquidation price.
- Leveraged Reverse Grid borrow assets from the platform for trading, so the borrowed assets will be automatically returned after the bot is closed.