Arena Blog
Data-driven insights on trading strategies, backtests, and market analysis.
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Why your 5× grid bot rarely gets liquidated — and why that isn't safety
A leveraged long grid was liquidated in 1 of 70 ninety-day windows since 2017 — because a grid never deploys more than half its notional. What leverage does instead: it deepens every drawdown and pays funding in the down windows.
Your grid bot is not a hedge. It is half a portfolio in cash.
A grid bot had the flatter drawdown in 138 of 138 windows since 2017, ranges set in advance. Not because it trades well: because it never invests more than half the money. What that protection costs in rally windows, and what a hindsight range was worth.
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