Subject: Proposal for Introducing a Spot Grid Trading Bot on Jupiter Exchange

Jupiter Products
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Subject: Proposal for Introducing a Spot Grid Trading Bot on Jupiter Exchange

Dear, Jupiter

I would like to propose the introduction of a new product on Jupiter Exchange – a grid trading bot, similar to the ones available on platforms like PancakeSwap or Binance.

Unfortunately, currently, there is no such functionality available on Jupiter or any other platform on Solana, and I believe that developing this feature would bring significant benefits not only to Jupiter Exchange but also to the entire Solana ecosystem. By introducing a grid trading bot, the platform could attract new users and increase liquidity, further contributing to the growth and development of the Solana community.

I kindly ask you to consider this proposal, as I believe that implementing this functionality would greatly enhance the user experience and increase the competitiveness of Jupiter Exchange in the market.

Thank you in advance for your time, and I look forward to your positive response.

Best regards

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so from my understanding, its basically a limit order on a curve?

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Not exactly. While both grid trading and limit orders involve setting predefined price levels for trades, they function differently.

Limit Order:

A limit order is a single order to buy or sell an asset at a specific price or better. For example, if you place a buy limit order for a stock at $10, the order will only execute if the price drops to $10 or below. Once the order is filled, it’s done; no further action is taken unless you manually place another order.

Grid Trading:

Grid trading, on the other hand, involves placing multiple limit orders at various price levels within a predefined range (the “grid”). It automates a series of buy and sell orders that are triggered as the price moves up and down within the set range. For instance, if you set up a grid with price levels at $10, $12, and $14, the system might automatically buy at $10 and sell at $12, then buy again if the price drops back to $10, and so on. This continues as long as the price stays within your grid.

Key Differences:

  • Automation: Grid trading automates a series of limit orders across multiple price levels, while a limit order is a one-time action.
  • Profit from Volatility: Grid trading is designed to capitalize on market fluctuations within a range, making profits from small price movements, whereas a limit order is generally aimed at entering or exiting a position at a specific price.

So, while a limit order is a component of grid trading, grid trading is a more complex and automated strategy that involves multiple limit orders working together within a defined range.

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Perfect! Thanks for your reply. I appreciate it

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Beyond increased liquidity what benefits does it bring?

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Hi, thank you for question.

Beyond increased liquidity, grid trading offers several additional benefits:

1. Profit from Market Volatility:

Grid trading is particularly effective in volatile markets where prices fluctuate within a range. The strategy allows traders to profit from these small price movements by repeatedly buying low and selling high at different levels within the grid.

2. Automated Trading:

Grid trading automates the trading process, which reduces the need for constant market monitoring. This is especially beneficial for traders who cannot or do not want to actively manage their positions all the time. It also eliminates emotional decision-making, helping traders stick to their strategy.

3. Risk Management:

By spreading trades across different price levels, grid trading helps diversify risk. Instead of placing a large bet on a single entry point, the strategy allows for gradual accumulation or distribution of an asset, which can reduce the impact of adverse market movements.

4. Flexibility:

Grid trading can be customized to suit different market conditions and trader preferences. For example, traders can adjust the grid spacing (distance between price levels) and the number of grids to match their risk tolerance and market outlook.

5. Steady Income Stream:

For traders who prefer a steady income rather than relying on large, infrequent profits, grid trading can provide consistent, smaller gains over time. This can be particularly attractive in sideways or range-bound markets where larger trends are not easily identifiable.

6. No Need for Market Prediction:

Unlike trend-following strategies, grid trading doesn’t require accurate predictions of market direction. Instead, it capitalizes on price movements within a range, making it effective even when the market lacks a clear trend.

###7. Better Utilization of Capital:
Grid trading allows for better capital utilization by placing small orders at various levels, ensuring that capital is working at different price points rather than being tied up in a single position. This can help improve overall return on investment.

In summary, grid trading is beneficial for traders who want to automate their strategies, manage risk more effectively, and profit from market volatility without needing to predict the direction of price movements.

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What i would be most interested in would be historical back-testing, a simulation of the bot on different assets across the crypto ecosystem and how does this perform vs spot buy, DCA or VA over a certain period. We would not want to offer to JUP users something that will create a loss.

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Hadn’t thought about more profit from market volatility, i guess if JUP oscillates more between 2 points then you logically make more profit lol.

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