Arithmetic vs geometric grid spacing, and why it matters more than it sounds

Two ways to space the levels of a grid. Arithmetic, fixed dollar step. Levels at 100, 98, 96, 94. Simple, and the percentage move between levels grows as price falls: 98→96 is 2.0%, but 20→18 would be 10%. Geometric — fixed percentage step. Levels at 100, 98, 96.04, 94.12. Every level is the same percentage apart, which means every completed round trip earns the same percentage return. For anything that can move a long way from where you started. Most crypto, small caps. Geometric is the honest choice, because your profit per round trip stays consistent instead of quietly shrinking near the top and exploding near the bottom. The mistake I made: arithmetic spacing on something that fell 60%. Near the bottom my levels were 5% apart in percentage terms, so I was buying enormous relative dips with the same fixed size. That's not a grid anymore, that's averaging down with extra steps.