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Grid Trading

Categories: Metrics, Accounting

Grid trading involves setting a series of positions. You put in place buy and sell orders at specific price intervals...like setting up a grid on a price chart. The goal is to take advantage of price volatility.

The technique is often used in currency trading. It works well in the forex context ("forex" being short for "foreign exchange"), because the market is almost always open (during the work week, it goes 24 hours). It allows for a constant bouncing around in currency pricing...the kind of volatility well suited for grid trading.

Find other enlightening terms in Shmoop Finance Genius Bar(f)