Here's the direct answer: Use arithmetic grid for ranging markets and geometric grid for trending markets. The difference isn't about which is better, but about how wide your price range is and how much the price fluctuates.
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Step 1: Understand the price spacing logic of the two grid types
The most fundamental difference is how the price intervals between grid lines are calculated.
Arithmetic grid: Each grid line is spaced by a fixed price amount. For example, if you set the spacing to 100 USDT, the prices will be 10,000, 10,100, 10,200, and so on. No matter where the price goes, the difference between adjacent grid lines remains 100 USDT.
Geometric grid: Each grid line is spaced by a fixed percentage. For example, if you set a 5% change, the prices will be 10,000, 10,500, 11,025, and so on. In higher price zones, the price gaps become larger in absolute terms, but each grid's profit percentage stays at 5% consistently.
Step 2: Match the grid type to your expected volatility range
Case A: You expect the coin to trade in a narrow range (range less than 30%) – Use an arithmetic grid. Because the price range is small, fixed-amount spacing ensures orders are evenly distributed and trading frequency is stable. This suits mainstream coins like BTC and ETH where absolute price moves are relatively stable.
Case B: You expect a wide trading range or a clear trend (range over 50%) – Use a geometric grid. With a wide span, the geometric grid places orders more densely in the lower price area, making trades easier to trigger, while orders in the higher zone are spaced further apart, capturing larger profit per trade. This is ideal for coins like DOGE and SHIB that can move more than 10% in a day, or for BTC running between 50,000 and 100,000.
Common reason for failure: Many traders use a geometric grid for a narrow ranging market, causing grid lines to be too dense in the lower zone, where fees eat up most of the profits. Or they use an arithmetic grid for a wide trending market, and when the price rises, the grid lines become too sparse to catch any gains.
High risk: The biggest loss in grid trading comes from the price breaking out of your set range. With an arithmetic grid during a one-sided breakout, every grid line becomes a losing position. With a geometric grid, the wide spacing in the high zone offers some protection, but the dense orders in the low zone can trap you in deep drawdown.
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Step 3: Calculate with real parameters to confirm the per-grid profit
No matter which type you choose, check the system's estimated "profit per grid" before creating the bot. If the per-grid profit after fees is less than 0.3%, your bot might generate less profit than the trading fees. For arithmetic grids, the profit amount per grid is fixed; for geometric grids, the profit percentage per grid is constant. In practice, you'll need to adjust parameters based on fees and the number of grids you set.
Verification after setup: After creating the grid, check the order distribution under [Current Orders]. In arithmetic mode, the price spacing is even; in geometric mode, orders are denser in the low zone than in the high zone. If the order distribution looks the opposite of what you expected, you've chosen the wrong mode, so stop the bot and reconfigure it.
