Grid Trading is a clear and
straightforward trading system. In its pure form (classic grid) it
does not use nor need any indicators. It is designed to take
advantage of the natural back and forth market movements. You merely
open both a buy and a sell trade on every grid line and this allows
you to make profit regardless of the direction the market moves. It
is a simple and effective technique. If the market moves up, you close
up your long trades, when it goes back down (retraces) you close your
sell trades too. This is how you make profit, by accumulating winning
trades in both directions. You don't need to predict the trend, you
don't need to know where the market is heading because you have
trades opened in both directions (hedged positions).
Up
and down, wave after wave – you are making profit.
These hedged positions are exactly
what makes classic grid extremely effective during ranging markets
(when the price is moving sideways or in a range). According to
various estimations these type of markets occur during 70-80% of the
time. Which means that. you can rack up profits while others are
waiting on the sideline for a trend...
Related posts:
Top 10 Benefits in Using a Grid Trading System
Grid Trading System
Top 10 Myths about Forex Grid Trading System
Monday, September 2, 2013
Friday, August 16, 2013
"No Stop" Forex Grid Trading System 2
OK, continuing the discussion over the "No Stop" Forex Grid Trading
System from the previous post here.
Forex Grid Trading is a great strategy, but to be consistently profitable with it, in the long run, you must have a solid risk management in place as well. Actually this is true for any trading system out there – a good risk management is necessary to achieve long term profitability. However the so called "No Stop" Forex Grid Trading System doesn't have any. None. Zero. Zilch. Not even a simple StopLoss.
The "No Stop" Forex Grid Trading System states that it is designed to take advantage of the natural back and forth market movements – this is true. It then builds a hedge grid to capture them – and it does. It has buys and sells opened at the same time, on the same grid line and this allows it to make profit regardless of the market direction. It all sounds good. And works most of the time. Why? Because this kind of setup (a hedged grid) is suitable for ranging markets, when price is moving sideways, in a range. This is where the "No Stop" Forex Hedged Grid Trading System shines. It racks up profits on every up and down movement, on every market wave. And the good news is that markets are moving sideways during majority of the time – various estimates say 70 to 80% of the time. This means that the "No Stop" Forex Hedged Grid Trading System will be making money during 70-80% of the time too. It all sounds great, isn't it? Well, yes, it does, at a first glance at least.
The problem here is that trends happen. Outside these 70-80% of the time markets are trending. And when a strong trend occurs, lets say an upwards one, then your grid will close all the buy positions at profit, but the sell ones will stay. The sell trades will stay open at an ever increasing loss (because there's no StopLoss on any of them). The stronger the trend the more sell trades will be opened and the higher the loss they will accumulate. And there's nothing in the "No Stop" Forex Hedged Grid Trading System to stop that. There's no risk management, not even a simple StopLoss at place. The trader is supposed to sit and wait and hope that some magic will get him out of the bad position he got himself in. And the moment you start relying on hope, on magic, this is when you are no longer trading. You are gambling...
You should never ever use a trading system with no risk management. You should never ever use the No Stop Forex Hedged Grid Trading System. You should never ever trade without a StopLoss. It is that simple.
Related posts:
"No Stop" Forex Grid Trading System
Top 10 Myths About Forex Grid Trading System
Top 10 Benefits in Using a Grid Trading System
Forex Grid Trading is a great strategy, but to be consistently profitable with it, in the long run, you must have a solid risk management in place as well. Actually this is true for any trading system out there – a good risk management is necessary to achieve long term profitability. However the so called "No Stop" Forex Grid Trading System doesn't have any. None. Zero. Zilch. Not even a simple StopLoss.
The "No Stop" Forex Grid Trading System states that it is designed to take advantage of the natural back and forth market movements – this is true. It then builds a hedge grid to capture them – and it does. It has buys and sells opened at the same time, on the same grid line and this allows it to make profit regardless of the market direction. It all sounds good. And works most of the time. Why? Because this kind of setup (a hedged grid) is suitable for ranging markets, when price is moving sideways, in a range. This is where the "No Stop" Forex Hedged Grid Trading System shines. It racks up profits on every up and down movement, on every market wave. And the good news is that markets are moving sideways during majority of the time – various estimates say 70 to 80% of the time. This means that the "No Stop" Forex Hedged Grid Trading System will be making money during 70-80% of the time too. It all sounds great, isn't it? Well, yes, it does, at a first glance at least.
The problem here is that trends happen. Outside these 70-80% of the time markets are trending. And when a strong trend occurs, lets say an upwards one, then your grid will close all the buy positions at profit, but the sell ones will stay. The sell trades will stay open at an ever increasing loss (because there's no StopLoss on any of them). The stronger the trend the more sell trades will be opened and the higher the loss they will accumulate. And there's nothing in the "No Stop" Forex Hedged Grid Trading System to stop that. There's no risk management, not even a simple StopLoss at place. The trader is supposed to sit and wait and hope that some magic will get him out of the bad position he got himself in. And the moment you start relying on hope, on magic, this is when you are no longer trading. You are gambling...
You should never ever use a trading system with no risk management. You should never ever use the No Stop Forex Hedged Grid Trading System. You should never ever trade without a StopLoss. It is that simple.
Related posts:
"No Stop" Forex Grid Trading System
Top 10 Myths About Forex Grid Trading System
Top 10 Benefits in Using a Grid Trading System
Tuesday, August 13, 2013
"No Stop" Forex Grid Trading System
NO! Don’t fall for this!
The so called "No Stop" Forex Grid Trading System is a joke. Don’t use it. It will blow your account over time. For sure! The first big trend you encounter and you will lose all your money (or until you get a margin call). You may make some profit initially, in fact if markets are favorable you can make a substantial profit and this can continue for quite some time. But then, eventually, a strong trend will occur and it will wipe out your account.
Why? Because you don't have anything to protect your account, you don't have any risk management, you don't even have a Stop Loss. In fact do NOT use any trading system that does not have a Stop Loss. Do NOT ever trade without at least some type of Stop Loss.
This is an extremely important topic and I’ll continue with more details on it in my next post. For now I just would like to state one more time – do not use the so called "No Stop" Forex Grid Trading System, it is a waste of time...
Related posts:
"No Stop" Forex Grid Trading System 2
10 Reasons to Use an Expert Advisor aka a Trading Robot
The so called "No Stop" Forex Grid Trading System is a joke. Don’t use it. It will blow your account over time. For sure! The first big trend you encounter and you will lose all your money (or until you get a margin call). You may make some profit initially, in fact if markets are favorable you can make a substantial profit and this can continue for quite some time. But then, eventually, a strong trend will occur and it will wipe out your account.
Why? Because you don't have anything to protect your account, you don't have any risk management, you don't even have a Stop Loss. In fact do NOT use any trading system that does not have a Stop Loss. Do NOT ever trade without at least some type of Stop Loss.
This is an extremely important topic and I’ll continue with more details on it in my next post. For now I just would like to state one more time – do not use the so called "No Stop" Forex Grid Trading System, it is a waste of time...
Related posts:
"No Stop" Forex Grid Trading System 2
10 Reasons to Use an Expert Advisor aka a Trading Robot
Monday, August 5, 2013
Grid Trading System Can Be Adjusted to Your Trading Style
This is an important advantage of GridTrading. Different traders have different trading styles. One is more
conservative, not willing to take risks and aiming to make just a few
percentages of profit per month. While another is more aggressive,
aiming at much higher profits, often 10-20-30% (or more) per week.
Well, whatever your trading style is, a Grid Trading System can
accommodate it. You can adjust the settings of your trading grid, so
it matches your preferences. For example more aggressive trades can
have a smaller grid step. This puts out more trades, makes for faster
accumulating of profit...
And why is this important? Because this allows you to trade as you feel comfortable. Grid Trading does not impose on you someone else's trading style, someones else's risk tolerance. No, not at all. It enables you to trade in your comfort zone, according to your own risk tolerance and your own profit goals. Convenient, isn't it?
Related posts:
Grid Trading Advantage – It Can Profit from both Trending and Ranging Markets
Grid Trading Advantage – No Indicators, No Complex Charts
Top 10 Myths about Forex Grid Trading System
And why is this important? Because this allows you to trade as you feel comfortable. Grid Trading does not impose on you someone else's trading style, someones else's risk tolerance. No, not at all. It enables you to trade in your comfort zone, according to your own risk tolerance and your own profit goals. Convenient, isn't it?
Related posts:
Grid Trading Advantage – It Can Profit from both Trending and Ranging Markets
Grid Trading Advantage – No Indicators, No Complex Charts
Top 10 Myths about Forex Grid Trading System
Friday, July 26, 2013
Top 10 Myths about Forex Grid Trading System
Today I would like
to talk a bit about the most popular myths associated with Grid
Trading. For some reason there are a lot of them floating around and
despite the numerous refutations they still persist. Some of them are
so absurd that they even defy common sense (like the one that you
don't need a StopLoss). So, here it is, a top 10 list of the most
popular (in my opinion) myths about the Grid Trading System:
- It will blow up your account. Nope, it wont. In fact if used properly, it can generate a lot of profit for you.
- It will lose money during strong trends. Not true. In fact dynamically hedged or directional grids thrive on trends.
- You don’t need a StopLoss with it. False. You always need a StopLoss with virtually any strategy.
- Grid Trading requires lots of attention. Not at all. In fact it is best traded with an EA and needs very little supervision.
- There are always dangling losing trades. The truth is there might be in some cases, but none in others. It depends on the market conditions and the selected Grid Trading strategy.
You need high leverage to trade with a grid. Nope, Grid Trading is a versatile system, it can be optimized to trade using any leverage. - Grid Trading is an “always on” system. Not at all. You can adjust it to trade during certain days only, even during certain hours of the day. A great example of this is the News Grid Trading System – it trades during major news events only.
- Your account must be able to sustain huge drawdowns to accommodate Grid Trading. False. As you can see from the examples we've posted earlier you may have very little or even no drawdowns.
- The No Stop Grid Trading System is the only one you should use. Wrong. This is a disastrous strategy. You should never trade with it.
- You must hedge all your positions with a grid i.e. open both buy and sell orders on every grid line. Not true. A dynamically hedged grid may or may not have hedged positions. And a directional grid does not have hedged trades at all.
As you can see there are lots of myths
associated with Grid Trading. I hope the above list cleared at least
some of them!
Thursday, July 25, 2013
Top 10 Benefits in Using a Grid Trading System
There are lots of benefits in using a
Grid Trading System, here are the most important ones:
- It is profitable!
- Simple, easy to follow rules.
- Can be traded on any currency pair.
- No indicators, no complex charts.
- Can make profit on both trending and ranging markets.
- Can be adjusted to your trading style.
- Easily automated, see for an EA link below.
- Can be backtested and optimized for any market.
- Unique strategy, can be combined with others in a portfolio.
- Can be used with various money management systems.
- And did I mention, it is a profitable trading strategy? :)
Tuesday, July 23, 2013
Elements of a Grid
Grid Trading System works by creating
and maintaining trading grids. A trading grid is set of trades placed
on the chart. There are 2 basic
elements every grid has – a Base Line and a Grid Step:
- The Base Line is the initial grid line. It is often selected to be at the closest round price.
- The Grid Step is the distance (in pips) between the grid lines. For example if your Base Line is at 1.2550 and your Grid Step is 10 pips then you will execute a trade at 1.2550, 12560, 1.2570, 1.2580, etc. whenever the price gets there. All these price levels are the grid lines where you place your trades.
Here you can find an example of a grid trading chart.
Subscribe to:
Posts (Atom)