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Geometric Long Only Strategy

The Geometric Long Only strategy is an advanced DCA (Dollar Cost Averaging) grid system designed for accumulating long positions during market dips. It combines geometric price spacing with intelligent martingale sizing.

Overview

Geometric Long Only is ideal for traders who:

  • Want to accumulate assets during pullbacks
  • Prefer long-only exposure (no shorting)
  • Like automated DCA with smart capital allocation
  • Want hands-off operation after setup

How It Works

1. Geometric Price Distribution

Orders are placed at geometrically increasing distances from the current price:

Current Price: $100
Level 1: $99.90  (0.1% below)
Level 2: $99.40  (0.5% spacing × 1.05)
Level 3: $98.85  (spacing × 1.05²)
Level 4: $98.25  (spacing × 1.05³)
...and so on

The geometric ratio (default 1.05 or 5%) ensures deeper levels are spaced further apart, capturing larger dips.

2. Martingale Sizing

Order sizes increase progressively:

Level Size Multiplier Example
1-3 Base × 2 (martingale) $100 → $200
4+ Previous × 2 $200 → $400
Last 2 Sum × 3 Heavy accumulation

This ensures: - Small buys near current price - Larger buys at deeper discounts - Biggest positions at best prices

3. Single Timer Operation

Unlike other strategies that constantly refresh, Geometric Long Only only triggers a refresh when:

  • A take-profit order executes
  • Position is fully closed
  • Manual intervention is needed

This reduces API calls and slippage.

Configuration Parameters

Core Settings

Parameter Default Description
wallet_exposure 1.0 (100%) Maximum portfolio allocation
first_entry_offset 0.001 (0.1%) First order distance from price
grid_spacing 0.005 (0.5%) Base spacing between levels
geometric_ratio 1.05 Spacing growth per level
minimum_levels 5 Minimum grid levels
maximum_levels 10 Maximum grid levels

Take Profit

Parameter Default Description
tp_percentage 0.005 (0.5%) Take profit distance

Sizing

Parameter Default Description
base_order_size 0.05 (5%) Base order as % of exposure
martingale_multiplier 2.0 Size multiplier per level
final_orders_multiplier 3.0 Multiplier for last 2 orders

Example Setup

For a $10,000 wallet with 50% wallet exposure ($5,000):

Level 1: $250 at -0.1%   (base × 2)
Level 2: $250 at -0.5%   (base × 2)
Level 3: $250 at -1.0%   (base × 2)
Level 4: $500 at -1.6%   (martingale)
Level 5: $1000 at -2.3%  (martingale)
Level 6: $1250 at -3.1%  (partial final)
Level 7: $1500 at -4.0%  (final × 3)
---
Total:  $5000 allocated

When to Use

Good For:

  • Trending markets: Accumulate during pullbacks in an uptrend
  • Range-bound markets: Buy dips, sell bounces
  • Long-term holders: DCA into positions over time
  • Low-maintenance: Set and forget approach

Not Ideal For:

  • Severe downtrends: Can accumulate at bad prices
  • High volatility: May fill all levels quickly
  • Short exposure: This strategy is long-only

Comparison with Other Strategies

Feature Geometric Long Only Market Making Xgrid
Direction Long only Both or single Both or single
Refresh On TP execution Continuous Continuous
Sizing Geometric martingale Dynamic distribution Fixed or dynamic
Best For Accumulation Liquidity provision Active trading

Risk Management

Built-in Protections:

  1. Deposit Responsive: Auto-scales with wallet balance
  2. Geometric Spacing: Deeper levels = better prices
  3. Capital Limits: Maximum exposure is capped
  4. Take Profit: Each position has an exit target

Risks to Consider:

  • Drawdown: All levels can fill in a crash
  • Timing: May buy too early in a downtrend
  • Opportunity Cost: Capital tied up in unfilled orders

Tips for Success

  1. Set appropriate exposure: Don't use 100% on a single symbol
  2. Choose your asset wisely: Use on assets you're bullish on long-term
  3. Monitor macro conditions: Reduce exposure in uncertain markets
  4. Let it work: Don't panic when levels fill - that's the strategy
  5. Take profits: Let TP orders execute, don't hold forever