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Risk assessment leveraged grid trading

Binance

Cryptocoins Exchanges / Binance 272 Views

Hi there,

for about 2 months I am using grind trading on Binance and Kucoin. On Kucoin I use a very wide range without leverage for the long term, on Binance I create rather narrow grids for the short term when I expect a time of sideways action, especially after strong price action. For these short-term Grids, I use "high" leverage, usually an x10.

Now I was wondering what would happen in case of leveraging a wide grid for the long term (let's say BTC Grid range 22000 - 100.000, 149 steps, x10 leverage). How high would be the risk of liquidation in a grid with x10 leverage? I was playing around in excel and I am normally mathematical experienced but couldn't figure out how the risk of liquidation changes while running a grid. Is there a risk of liquidation at all due to the constant averaging down in the grid? And if there is a risk of liquidation, how could I calculate the amount of margin to avoid liquidation of my x10 futures?

Would be happy to get some ideas from you. Or maybe someone already has experience in this approach.

submitted by /u/Lagiol
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