Have a quick question about Fundamental Analysis and Grid Trading | Forex Factory

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Have a quick question about Fundamental Analysis and Grid Trading

  • #1
  • First Post: Jun 28, 2023 5:05am Jun 28, 2023 5:05am
Hey.
I want your review on my strategy that I mainly use on grid trading backed with fundamental analysis.
So, lets say I opened a XAUUSD SELL 1910 and it went 1920 and I opened another SELL, and 1930 and so on, and then I red online that (for example) Russia invaded another Ukrainian city or Wall Street weakened, should I buy XAUUSD to hedge my losses? Or is the strength temporary and it depends on the strength of the news? I hate hedging because it can turn against me.

Your thoughts, please.
  • #2
  • Jun 28, 2023 12:49pm Jun 28, 2023 12:49pm
This sounds like a martingale strategy and won't work longer term.
  • #3
  • Jun 28, 2023 1:27pm Jun 28, 2023 1:27pm
It depends on the news probably. Russian invasion caused 100 dollar movement, strangely the day ended negative.

And ofcourse what you can do will depend on your margin.
  • #4
  • Jun 28, 2023 4:00pm Jun 28, 2023 4:00pm
Quoting ForexStats
This sounds like a martingale strategy and won't work longer term.
Its a modified martingale strat, but bear in mind that you will need $100 for every 0.01 so you can sustain the drawdowns incase the trend goes against you, and even if it does, you just hedge it and eventually it'll go back to the same place it was, even if it took 2 to 3 months. But like I said, this rarely happens. The markets don't trend a lot therefor we should use that to our advantage.
  • #5
  • Jun 28, 2023 4:01pm Jun 28, 2023 4:01pm
Quoting Eren10
It depends on the news probably. Russian invasion caused 100 dollar movement, strangely the day ended negative. And ofcourse what you can do will depend on your margin.
Indeed.

My calculation is that you need $100 for every 0.01 placed. Other than that, you risk blowing your account. Its all about risk management. And to those people that say you should cut your losses quickly, guess what, you can't predict where the market will go hence the risk management. You can't keep cutting losses or you'll bleed your account to death slowly.
  • #6
  • Jul 10, 2023 9:03am Jul 10, 2023 9:03am
Quoting ObadaAdel
Hey. I want your review on my strategy that I mainly use on grid trading backed with fundamental analysis. So, lets say I opened a XAUUSD SELL 1910 and it went 1920 and I opened another SELL, and 1930 and so on, and then I red online that (for example) Russia invaded another Ukrainian city or Wall Street weakened, should I buy XAUUSD to hedge my losses? Or is the strength temporary and it depends on the strength of the news? I hate hedging because it can turn against me. Your thoughts, please.
Grid trading with fundamental analysis, huh? Cool! Now, when crazy news hits like Russia invading Ukraine or Wall Street going down, think about the strength and impact. Hedging can be risky, so adapt your strategy if needed. Stay flexible and nimble in the trading game!
  • #7
  • Jul 11, 2023 10:53am Jul 11, 2023 10:53am
When using a grid trading strategy backed by fundamental analysis, hedging can be a consideration if the news suggests a potential reversal or temporary strength. However, the decision to hedge should depend on your risk tolerance and the strength of the news. It's important to carefully assess the impact and longevity of the news before taking any hedging actions.
  • #8
  • Last Post: Jul 12, 2023 5:05am Jul 12, 2023 5:05am
Quoting ObadaAdel
Hey. I want your review on my strategy that I mainly use on grid trading backed with fundamental analysis. So, lets say I opened a XAUUSD SELL 1910 and it went 1920 and I opened another SELL, and 1930 and so on, and then I red online that (for example) Russia invaded another Ukrainian city or Wall Street weakened, should I buy XAUUSD to hedge my losses? Or is the strength temporary and it depends on the strength of the news? I hate hedging because it can turn against me. Your thoughts, please.
When you do hedging with the same asset you just lock the difference between entry price of your original trade and entry price of the hedge trade. Basically it is same as closing position with loss because CFD contract is cash settled and later when you'd like to unlock that position you would still realize the amount of loss same as when you was about to enter the hedge position. So I consider it pretty useless. Better to close position and wait for better conditions for entry according to your system
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