Glossary (A-Z)

All grid trading, crypto derivatives, and bot terminology on a single page.

A

Ask (Sell Price): The lowest price at which a seller is willing to sell an asset. It is the best price on the sell side of the order book. When you want to buy, the price you pay is typically the ask price.

ATR (Average True Range): A volatility measure showing how much the price moves on average over a given period. Using ATR when determining your grid range helps you select a range suited to current market conditions.

B

Backtest: A method of simulating a strategy on historical price data to measure its performance. It is strongly recommended to backtest your grid strategy before committing real capital.

Bias: The bot's tendency to favor a particular direction (long or short). For example, with long bias the bot buys more aggressively, while with short bias it acts more cautiously.

Bid (Buy Price): The highest price a buyer is willing to pay for an asset. It is the best price on the buy side of the order book. When you sell, the price you receive is typically the bid price.

Bootstrap: The process by which the bot quickly fills missing grid levels based on the current market state when it first starts. For example, if the price is in the middle of the grid range, it sends immediate market orders to levels below the current price to open positions.

Break-even: The point at which there is neither profit nor loss. It is where total cost equals total revenue. The break-even price of a position is the level at which you would have zero profit/loss including all fees.

C

Clean Shutdown: The bot's controlled shutdown process. Open orders are cancelled in sequence, positions are closed, and all resources are cleaned up. Unlike a sudden crash, it leaves no orphaned orders or positions.

Cross Margin: A margin mode where your entire account balance is used as collateral for all open positions. Liquidation risk is lower, but a large loss can wipe out your entire balance.

Cycle: The bot's repeating main loop. Each cycle checks the price, detects missing orders, and performs necessary actions. The default cycle duration is typically 15 seconds.

D

DCA (Dollar Cost Averaging): A strategy of buying equal amounts at regular intervals to lower the average cost. Grid trading can be thought of as a form of automated DCA — it buys in stages as the price drops.

Drawdown: The percentage decline in value from an investment's highest point to its lowest point. For example, if your portfolio drops from $1,000 to $800, the drawdown is 20%.

Dry Run: Running the bot in a simulated environment without using real money. Ideal for testing your strategy — no real orders are sent and all trades are virtual.

E

Entry: The point of entering a position. In grid trading, each buy order placed at a grid level is an entry point. When the price drops to that level, the order is triggered and a position is opened.

Exchange: A platform where crypto assets are bought and sold. Can be centralized (CEX) or decentralized (DEX). Gridera operates on Pacifica DEX.

F

Fee (Trading Fee): The commission paid to the exchange on every buy or sell transaction. Split into maker and taker fees. Since grid trading involves many transactions, fees directly impact overall profitability.

Fill: The matching and execution of an order on the exchange. When your limit order matches with a counterparty order, it is "filled." Partial fills are also possible — only part of the order is executed.

Funding Rate: A periodic payment exchanged between long and short sides in perpetual futures markets. When the funding rate is positive, long position holders pay short holders; when negative, the reverse applies.

G

Grid: A network of buy and sell orders placed at equal or proportional intervals within a defined price range. Each level has a buy and a sell order; profits are made as the price moves between them.

Grid Break: The situation when the price moves outside the grid range. When the price drops below grid_low or rises above grid_high, the bot detects this and may initiate a clean shutdown.

Grid Level: Each individual price level on the grid. For example, in a grid from $100 to $110 with 10 levels, the starting point of each $1 interval is a grid level.

Grid Range: The price range covered by the grid — the zone between the lowest (grid_low) and highest (grid_high) prices. This range defines the operating area of your strategy.

Grid Spacing: The distance between two grid levels. Can be fixed (linear) or percentage-based (percent). Narrow spacing produces more frequent trades; wide spacing produces fewer but larger profit trades.

GTC (Good Till Cancel): An order that remains active until you cancel it. This is the standard order duration used in grid trading — orders wait in the market and execute automatically when the price reaches that level.

H

Hedge: A strategy of opening a position in the opposite direction to reduce the risk of an existing position. For example, opening a short position while running a long grid in anticipation of a short-term decline is a hedge.

I

IOC (Immediate or Cancel): Any portion of the order not filled immediately is automatically cancelled. Used when fast execution is required — partial fills are accepted but the order is not left pending.

Isolated Margin: A margin mode where separate collateral is allocated for each position. If a position is liquidated, only the margin allocated to that position is lost; the remaining account balance is protected.

K

Keypair: A pair of cryptographic keys (public and private) used for signing transactions on blockchain-based exchanges. The private key signs orders while the public key identifies your account.

L

Leverage: A borrowing mechanism that allows you to open positions larger than your capital. 10x leverage means you can open a $1,000 position with $100 in collateral. Both profit and loss are magnified equally.

Liquidation: The forced closure of your position by the exchange when your collateral can no longer cover the losses. You lose your entire margin. Liquidation risk increases with high leverage and narrow margins.

Limit Order: An order that executes at the price you specify or better. Buy orders in grid trading are typically limit orders — they wait until the price reaches that level.

Long: A position direction that aims to profit from price increases. You buy low and sell high to make a profit. In long mode, the grid bot buys as price drops and sells when it rises.

M

Maker: A participant who adds liquidity to the order book by placing limit orders. Maker fees are generally lower than taker fees. Grid bots mostly trade as makers, providing a fee advantage.

Margin: The collateral required to open a position. In leveraged trading, you only need margin rather than the full position value. If margin becomes insufficient, liquidation risk arises.

Mark Price: The reference price used by the exchange for position valuation and liquidation calculations. It is calculated from multiple sources to prevent manipulation and may differ from the last traded price.

Market Order: An order that executes immediately at the best available price. Guarantees fast execution but carries slippage risk. May be used during bootstrap to fill missed grid levels.

N

Notional: The total dollar value of a position. For example, if you use $100 margin with 10x leverage, your notional value is $1,000. Fee and funding calculations are based on notional value.

O

Open Interest: The total number of open positions in a market. High open interest indicates active interest in that market. Sudden changes can signal upcoming large price movements.

Order Book: A record of all open buy and sell orders listed by price and quantity on an exchange. Consists of bid (buy) and ask (sell) sides and shows market depth.

P

Paper Mode: See Dry Run. A mode for trading in a virtual environment without using real money. Allows you to test your strategy without taking any risk.

Perpetual (Perp): A futures contract with no expiration date. Unlike traditional futures, it can remain open indefinitely. It is kept close to the spot price through the funding rate mechanism. Grid bots typically operate in perp markets.

PnL (Profit and Loss): The fundamental metric showing how much a position or strategy has earned or lost. Divided into realized (closed positions) and unrealized (open positions).

Position: An open long or short trade on the exchange. In grid trading, each filled grid level creates a position that is closed with a take profit order.

R

Range: The price interval in which the asset moves. In grid trading, the range refers to the zone between grid_low and grid_high. The bot actively trades as long as the price stays within this range.

Realized PnL: The actual profit or loss from closed positions. PnL is not "realized" until the position is closed. The grid bot generates realized PnL with each take profit fill.

Reconciliation: The process of comparing the bot's local state with actual order status on the exchange and correcting discrepancies. Automatically detects and repairs missing grid orders or lost take profits.

Reduce Only: A special order type that can only reduce an existing position and cannot open a new one. Take profit orders are sent as reduce-only to prevent accidentally opening a position in the wrong direction.

ROI (Return on Investment): The percentage return relative to your invested capital. Shows how much profit you made compared to your investment. Calculation: (Net Profit / Investment) x 100.

S

Short: A position direction that aims to profit from price decreases. You sell high first and buy back low to make a profit. A short grid bot sells on the way up and buys back on the way down.

Slippage: When your order executes at a different price than expected. Slippage can be high especially with market orders and in low-liquidity environments. Grid bots minimize slippage by using limit orders.

Spread: The difference between the best buy (bid) and best sell (ask) prices of an asset. A narrow spread indicates high liquidity; a wide spread indicates low liquidity. The spread directly affects your trading cost.

Stop Loss: An automatic closing level set to limit losses. When the price reaches this level, the position is automatically closed. In grid bots, a global stop loss can be defined; when triggered, all positions are closed.

T

Take Profit (TP): An order that automatically closes a position when the target profit level is reached. In grid trading, the next grid level above each entry is set as the TP; when the price rises, profit is realized.

Taker: A participant who removes liquidity from the order book by placing market orders or instantly-matching limit orders. Taker fees are generally higher than maker fees. You become a taker when immediate execution is needed.

TP: See Take Profit. An order type that automatically closes a position when it reaches the profit target.

Trailing Stop: A stop order that automatically adjusts as the price moves in your favor. For example, as the price rises, the trailing stop also rises, but if the price falls, it stays fixed and may trigger.

Trend: The tendency of the price to move consistently in a particular direction. Can be an uptrend, downtrend, or sideways. Grid trading is most efficient in sideways and mildly trending markets.

U

Unrealized PnL: The current profit or loss status of still-open positions. This value changes continuously until the position is closed. It is calculated based on the difference between the current price and the entry price.

V

Volatility: A measure of how much the price fluctuates over a given period. High volatility is ideal for grid trading because the price moves more frequently between grid levels and generates more trades.

W

WebSocket: A persistent two-way communication channel between server and client. The exchange delivers price changes, order status updates, and trade history in real-time via WebSocket.

Win Rate: The percentage of profitable trades out of total trades. For example, if 70 out of 100 trades are profitable, the win rate is 70%. Grid trading generally produces a high win rate, but it alone is not a profitability indicator.