Estimate the Profitability of BTC/USDT Grid Trading based on 2023 data

Grid basics idea are explained simply

Grid trading algorithm could be applied to anything you can buy and sell. The only requirement to trade is to access the items with volatile prices, either sales, special offers, discounts at the real economy, or exchange rate fluctuations. The simplest example is when you buy something at a reduced price and then wait for its price to get higher to sell it and get a profit, then you buy again at the reduced price and sell again at the raised price.

Applying this very basic example to crypto trading we are talking about buying, let's say, bitcoin (BTC) at a lower tokenized dollar (USDT) price and then later selling it at a higher USDT price.

An step-by-step explanation of how you trade within one grid:

1. Let's assume that you have some USDT in your exchange account.
2. Chose the crypto pair you'd like to trade (in our case BTC/USDT).
3. Choose the price you'd buy (Lower Price) and the price you'd sell (Upper Price).
4. Wait until the market price be equal or lower than Lower Price.
5. Buy at the Lower Price.
6. Then you wait until the price rises up to equal or greater than Upper Price.
7. Sell at the chosen Upper Price.
8. Collect Profit.
9. Repeat steps 4 and 8 multiple times.

Let's add numbers.

1. Reserve 100 USDT in your exchange account.
2. Choose the crypto pair Bitcoin (BTC) and Tether (USDT).
3. Choose Lower Price = 32000 USDT/BTC and Upper Price = 42000 USDT/BTC.
4. Wait until the price drops to 32000 USDT/BTC.
5. Buy at the Lower Price, 100 USDT / 32000 USDT/BTC = 0.003125 BTC.
6. Then wait until price grows to 42000 BTC.
7. Sell at the Upper Price, so we have 0.003125 BTC * 42000 USDT/BTC = 131.25 USDT.
8. So we collect Profit 131.25 USDT - 100 USDT = 31.25 USDT.
9. Evry next repeat of steps 4 ... 8 will give us the same Profit amount of 31.25 USDT.

A detailed, step-by-step description of how the Grid Trading strategy works will be published soon.