Grid Trading can profit from both trending and ranging markets!
Yes, this is correct. By using a grid
trading system (or a grid portfolio) you can make profit from both
trends and sideways movements. For example using a directional grid
you can profit while the market is trending. And using a classic grid
(fully hedged grid) you can make pips during sideways movements too.
So we have grids to handle every type of market.
Ok, but wait, how do we know what grid
to apply and when? Well, this is a bit of a problem. And as with any
problem there are various solutions. For example you can use an
external indicator to tell you if you are in a trend or not. Or you
can pre-select times that are highly likely to have trends (like when
the news announcements come) or sideways movements (quiet hours of
the day or right after a big trend). Then another way to approach
this is to trade with a grid portfolio of both directional and
classic grid(s). Let the one handle trends and the other ranging
markets.
And finally there’s another type of
grid that you can use to solve the above problem too. We call it
“dynamically hedged grid”. Why? Because it hedges only if
necessary i.e. dynamically. By default it is a directional grid, but
if the price reverses then it will start hedging. It combines the
strong sides of both directional and classic grids. It thrives on
trends but it is capable of handling sideways markets too. And
because of these it is our favorite type of grid to use.
So, yes, you can use Grid Trading to
make profit from both tending and ranging markets. It is truly a
versatile trading system.
Related posts:
Grid Trading Advantage – No Indicators, No Complex Charts
Grid Trading System Can Be Adjusted to Your Trading Style
