Do most people actually understand this about Spot Grid bots?

I've a good friend utilizing Binance Spot Grid, and this is surprisingly exhausting to elucidate to him.

Imagine equal grid levels:

$100 - $95 - $90 - $85 - $80

Throughout a decline, the bot keeps buying and accumulates stock. After shopping for at $80, its subsequent grid sell could be at $85.

Regionally, that's right:

purchase $80 - sell $85 = profitable grid cycle

But if equal amounts have been collected at $100, $95, $90, $85 and $80, the typical worth of the whole stock is round $90.

So at $85 you'll be able to have:

Grid commerce: profit

General collected place: nonetheless under average

The bot isn't necessarily doing anything mistaken — it's simply managing grid pairs, which isn't the same thing as managing the price basis of the whole place.

I observed this virtually immediately once I first tried a grid bot, but my pal still assumes that each profitable grid sell must also be worthwhile for the whole collected position.

Did you understand this earlier than utilizing grid bots, or only after operating one?