How Grid Spacing Works
Grid spacing is the distance between a grid's entries. How it sets the grid's span, how often baskets close and how fast losses build — with fixed, volatility-based and widening steps compared.
By the AURAX teamPublished 4 min read
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Grid spacing (the grid step) is the price distance between one grid entry and the next. Together with the number of levels it sets the grid's span — how far price can travel before the grid is full. A tight step fills the grid quickly and closes baskets on small retracements; a wide step gives more room but needs bigger moves back to close. Spacing does not change how big the positions are — it changes how fast price reaches them.
grid span = step × (levels − 1)
- 8 levels, $5 apart: the last entry is $35 from the first
- 8 levels, $2.50 apart: $17.50
- 8 levels, $10 apart: $70
Part of the Grid trading guide.
Same lots, different steps
Three grids with identical lots — 0.01 lot doubling over eight levels, 2.55 lots in total — differing only in spacing:
| Step | Span (level 8) | Loss as level 8 opens | Loss at a $35 move | Move that costs $2,000 |
|---|---|---|---|---|
| $2.50 | $17.50 | $617.50 | $5,080 | $22.92 |
| $5.00 | $35.00 | $1,235 | $1,235 | $38.00 |
| $10.00 | $70.00 | $2,470 | $185 | $66.30 |
Read the last two columns together. At a $35 move, the tight grid is already $5,080 down while the wide one is $185 down — because the wide grid has only opened four small levels. But the loss when each grid is full doubles with the step: the wide grid's positions are further apart, so the early ones are deeper under water by the time the big ones open.
Tight vs wide
| Tight step | Wide step | |
|---|---|---|
| Baskets close | Often, on small retracements | Less often; needs larger swings |
| Grid fills | Quickly — an ordinary move can fill it | Only on a large move |
| Worst case at full depth | Smaller span, reached sooner | Larger loss, reached later |
| Sensitive to | Normal volatility and spread | Trends and shocks |
There is no universally right step. It has to be judged against how far the market actually moves: a $2.50 step that suits a quiet session can be filled in a minute after a data release.
Fixed, volatility-based and widening steps
Fixed step
The same distance at every level. Simple and predictable, but blind to volatility: the same step is loose on a quiet day and tight on a violent one.
Volatility-based step
The step is a fraction of a volatility measure, commonly the Average True Range (ATR) — the average daily range over recent days. When gold is moving more, the grid automatically spaces further apart, so it does not fill on moves that are ordinary for that day.
step = daily ATR × fraction
- e.g. a daily ATR of $40 and a fraction of 0.08 gives a $3.20 step
Widening step
Each level is further from the last than the one before — for example +$1 per level up to a cap. Early levels stay close for quick recoveries; later, larger levels need a bigger move to trigger, which buys distance where the exposure is heaviest.
Spacing in points: check your broker's digits
EAs usually express the step in points. On a two-decimal gold quote a point is $0.01, so 500 points is $5.00; on a three-decimal quote, 500 points is $0.50 — a grid ten times tighter than intended. Always convert a step to dollars of price for your broker before running it. What is XAUUSD covers points and pips.
Choosing a step
- Start from the market's movement: the typical daily range and the size of moves on news days.
- Compute the span: step × (levels − 1). Ask how often gold has moved that far without coming back.
- Compute the loss at full depth and beyond, with your lots. The grid risk calculator does it for any combination.
- Check it against the account-level stop: if the stop fires before the last levels open, those levels are never used and only add risk.
Educational content, not financial advice. Trading gold and other leveraged products carries a high level of risk, including the possible loss of some or all of your capital. Automated strategies do not guarantee profit, and past or simulated performance is not indicative of future results. Risk disclosure.