Ok Olu,
I will post a constructive comment. Although it is challenging your theory, but it is a constructive and valid question that traders will want to know.
I will assume that you are genuinely not selling any service or product and I will assume that the main topic of discussion in this thread is the money management system that you are proposing.
1)*Most Important* Do we assume that all the traders have a solid edge? As I understand, any method, even if it is riskier will prove profitable as long as your edge over the market if unquestionably solid AND you are nowhere near a risk of ruin. In that case, regardless of what you do, you will be profitable. You don't need this grid money management (or any stop loss style money mangement)
2)If we assume that not all traders have a solid unquestionable edge (which is most likely the case in most situations for most market participants), we are relying solely on the fact that money management (in this case a grid like system) will provide us with that missing edge. For now to make the discussion easy, let us assume that we do not have an edge over the market. Herein lies the biggest issue. Allow me to explain.
Firstly, in hindsight, any chart is as clear as day. It is easy to say that my system works because you already know the outcome of the trade to a certain extent. When you backtest, all the candles have already been drawn out.
In real time, when candles are drawn on the fly, nobody knows where price is going to go next. For example:
a)you buy 1 lot on trade 1 and you were wrong,
b)you want to enter trade 2 with sell 2 lots.
-How do you know at trade 2, it will not reverse?
-How do you know that every trade you place will be at the extreme ends of the range?
-How do you know that each trade you place will follow with a breakout? -How do you know that your trade will reverse strongly enough to cover your original positions?
The answer is simple. You do not know. I do not know. Even George Soros would not know. Nobody can predict the future. This is the biggest problem on solely relying on money management to provide an edge.
In summary:
-In real time, it is difficult to determine the point of entry that will conform to our money management strategy and give us that "sure win" effect.
-Backtesting in hindsight always seems perfect. It is not so perfect in real time because we don't have crystal balls.
-If you were so good at picking directions, you don't even need the grid management system to begin with. Think about this last comment.
I will post a constructive comment. Although it is challenging your theory, but it is a constructive and valid question that traders will want to know.
I will assume that you are genuinely not selling any service or product and I will assume that the main topic of discussion in this thread is the money management system that you are proposing.
1)*Most Important* Do we assume that all the traders have a solid edge? As I understand, any method, even if it is riskier will prove profitable as long as your edge over the market if unquestionably solid AND you are nowhere near a risk of ruin. In that case, regardless of what you do, you will be profitable. You don't need this grid money management (or any stop loss style money mangement)
2)If we assume that not all traders have a solid unquestionable edge (which is most likely the case in most situations for most market participants), we are relying solely on the fact that money management (in this case a grid like system) will provide us with that missing edge. For now to make the discussion easy, let us assume that we do not have an edge over the market. Herein lies the biggest issue. Allow me to explain.
Firstly, in hindsight, any chart is as clear as day. It is easy to say that my system works because you already know the outcome of the trade to a certain extent. When you backtest, all the candles have already been drawn out.
In real time, when candles are drawn on the fly, nobody knows where price is going to go next. For example:
a)you buy 1 lot on trade 1 and you were wrong,
b)you want to enter trade 2 with sell 2 lots.
-How do you know at trade 2, it will not reverse?
-How do you know that every trade you place will be at the extreme ends of the range?
-How do you know that each trade you place will follow with a breakout? -How do you know that your trade will reverse strongly enough to cover your original positions?
The answer is simple. You do not know. I do not know. Even George Soros would not know. Nobody can predict the future. This is the biggest problem on solely relying on money management to provide an edge.
In summary:
-In real time, it is difficult to determine the point of entry that will conform to our money management strategy and give us that "sure win" effect.
-Backtesting in hindsight always seems perfect. It is not so perfect in real time because we don't have crystal balls.
-If you were so good at picking directions, you don't even need the grid management system to begin with. Think about this last comment.