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Attachments: The grid hedge - the core version
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The grid hedge - the core version

  • #41
  • Mar 31, 2008 10:59am Mar 31, 2008 10:59am
Quoting Xaron
Hmm... if you reload the grid on both sides, you will end up with some danglers on one side. These danglers will be higher losses than the other side where you take profit every 10 pips. The only way I can imagine this could work is if you don't take profit but simply add to the winning side...

Regards - Xaron
Haven't mentioned anyhting about adding to a position Xaron and yes the system stipulates, NO SL and NO TP, this is very important in order to hedge your position at all times.

I almost always end up with losers on one side the idea is to end up with more winners than losers so you can come out profitable in the end.
  • #42
  • Mar 31, 2008 11:07am Mar 31, 2008 11:07am
Quoting fewhills
So if you reach this DD you never can change these trades to the better. You'll just have to close all trades and start over again. Am I right?
Yes, that's right. But remember that I am only giving you this info so you know what the worst case scenario is, the idea is never to let it get to that. But at least you know that your account wont be wiped out during an unforeseen event.

If you see your charts and look for the big moves, you see a big red or big green candle, except for news days is not common to find a candle that goes over 100 pips to one side, and then 200 to the other side and then 100 to come back to where you started, maybe in the GBPJPY and this is why I trade the EURUSD.

So even in a situation where the price moves 400 pips in a crazy fashion during one day there are techniques to keep your head above water and minimize your loss or even make a good profit.
  • #43
  • Mar 31, 2008 11:14am Mar 31, 2008 11:14am
Quoting Dreamliner
What criteria do you use for closing out in profit? In other words, I was up $25.00 today on my demo account (using $1,000.00 on both accounts) so I closed, and then reopened.
Dreamliner, this is where your criteria and your personality comes into play, I personally think you did well on closing your position and banking a 2.5% ROI for the day, and staying in the market in case any other big movements might arise.

In this case, you did not wait for the day to close, thus meddling with the set and forget approach but in this system as in any other it is a lot more profitable if you have the time to babysit.
  • #44
  • Mar 31, 2008 11:51am Mar 31, 2008 11:51am
Quoting isydeb
Dreamliner, this is where your criteria and your personality comes into play, I personally think you did well on closing your position and banking a 2.5% ROI for the day, and staying in the market in case any other big movements might arise.

In this case, you did not wait for the day to close, thus meddling with the set and forget approach but in this system as in any other it is a lot more profitable if you have the time to babysit.
Thanks isydeb, but I believe it is actually 1.25%, given both $1,000.00 accounts were "at risk."
  • #45
  • Mar 31, 2008 12:36pm Mar 31, 2008 12:36pm
Quoting Dreamliner
Thanks isydeb, but I believe it is actually 1.25%, given both $1,000.00 accounts were "at risk."
Yeah, right if there $2,000 at risk then it'd be 1.25%.

Something important that I forgot to mention is that after taking a profit or a loss you must divide your profit or loss among the two accounts so as to always have a mirrored margin available, you don't wan to have a fat account hedged against a smaller one. So you should transfer whatever amount is necessary (after interest and all) to maintain both accounts mirrored before opening a new set of orders.
  • #46
  • Mar 31, 2008 1:03pm Mar 31, 2008 1:03pm
The good thing about grid systems is that they are easy to back test with 90% accuracy since there are no indicators involved (usually).

The bad thing about traditional (non-dynamic) grids is that for every one position you open against the trend (whatever it ends up being), you need at least 2.5 trades open in the direction of the trend in order to break even that 1 position you opened against the trend.

Example:

EURUSD starts at 1.5800 and eventually goes to 1.5900

1st entry: Short 1.5800
2nd entry: Long 1.5820
3rd entry: Short 1.5780
4th entry: Long 1.5840
5th entry: Long 1.5860
6th entry: Long 1.5880
7th entry: Long 1.5900

If the price stayed around 1.5900, you would be in the negative, but close to break even.

If there is a retracement to say around 1.5870 or something, than those1.5880 and 1.5900 so you are again in the negative...

In my opinion the only grid trading system that may work is carry trade gridding on one side; long positive swap. With proper money management it may work. Hedge funds, investment banks, companies etc do carry trades to hedge other investments. Problem is, they have the man power to monitor markets 24/7, so when shit hits the fan they can manage their positions right away... and they don't over leverage because for them a few % return means millions, we poor folk need at least a 3:1 system (100% return / 33% max DD) in order to make it through the year... at least until we have a few millions ourselves.
  • #47
  • Mar 31, 2008 1:15pm Mar 31, 2008 1:15pm
Hi,

this is a backtest of the system starting from July 1st 2007 to March 27th 2008 where it yielded 4,351 pips on the set and forget scenario, that is closing all positions the following day, be it in profit or loss, and opening new ones.

Market character changes ever so often so I backtested a period which IMHO has rather prevailed under similar conditions.
Attached File(s)
File Type: xls The_Grid_Hedge 2007-2008.xls   293 KB | 1,202 downloads
  • #48
  • Mar 31, 2008 1:23pm Mar 31, 2008 1:23pm
So, during that period there was not One day that had the full 500 pip loss? I find that remarkable.
  • #49
  • Mar 31, 2008 1:58pm Mar 31, 2008 1:58pm

Here is a visual of the winning v.s. losing trades.

Attached Image (click to enlarge)
Click to Enlarge Name: graph.jpg Size: 65 KB
  • #50
  • Mar 31, 2008 2:18pm Mar 31, 2008 2:18pm
Quoting isydeb
Yeah, right if there $2,000 at risk then it'd be 1.25%.

Something important that I forgot to mention is that after taking a profit or a loss you must divide your profit or loss among the two accounts so as to always have a mirrored margin available, you don't wan to have a fat account hedged against a smaller one. So you should transfer whatever amount is necessary (after interest and all) to maintain both accounts mirrored before opening a new set of orders.
Ah, makes perfect sense, thanks for the information.
  • #51
  • Mar 31, 2008 3:37pm Mar 31, 2008 3:37pm
Well, I am giving it a live try for the heck of it.... currently 1.5791...I have enterred on both sides of that number, see you tomorrow...

I will be checking one time this evening (in US). If any one side has been fully executed I will exit all but the highest entry (most recent entry). I will consider exiting at that time under some other scenarios.
  • #52
  • Mar 31, 2008 4:03pm Mar 31, 2008 4:03pm
You see how much more responsive a thread is and how much more attention it gets when the creator actually bothers to post some results?

Something similar should be done for much more ranging time period.

All else is a waste of time (OzFX, hint hint).

Thank you very much isydeb.
  • #53
  • Mar 31, 2008 8:20pm Mar 31, 2008 8:20pm
Update --- 2 shorts executed....currently -19, +1...so we will wait
  • #54
  • Apr 1, 2008 3:26am Apr 1, 2008 3:26am
Thanks for sharing your system. I really like the Metatrader environment so I'm staying with it(despite the higher spread) . My goal is about 50 pips a day. Yesterday it was +66 pips and i then proceeded with closing down all orders. Nice!

One thing i would like is to have an EA watch the open profit/loss of the current trades and then shut everything down automatically once a certain pip count has been reached. I tried to to this with the Swiss Army EA but when the profit goal was reached there was no action from the EA. I guess i must have set it wrong or something. Does anyone know of a similar EA that can do this?
Liberate me ex inferis
  • #55
  • Apr 1, 2008 6:16am Apr 1, 2008 6:16am
Whata nice way to wake up. All shorts executed, no longs. Up almost 500 pips. Exited first 4 shorts plus 440 (140,120,100,800). moving last one to BE SL.
  • #56
  • Apr 1, 2008 6:40am Apr 1, 2008 6:40am
Try this EA, which allows you to close all orders in profit once a set amount of pip or dollar amount is reached.

Note: v1.11 is not the latest version, but this is the only version I could find.

TimeFreedom

Quoting Ronyn76
Thanks for sharing your system. I really like the Metatrader environment so I'm staying with it(despite the higher spread) . My goal is about 50 pips a day. Yesterday it was +66 pips and i then proceeded with closing down all orders. Nice!

One thing i would like is to have an EA watch the open profit/loss of the current trades and then shut everything down automatically once a certain pip count has been reached. I tried to to this with the Swiss Army EA but when the profit goal was reached there was no action from the EA. I guess i must have set it wrong or something. Does anyone know of a similar EA that can do this?
Attached File(s)
File Type: mq4 MultiPositionExpert_v1.11.mq4   7 KB | 993 downloads
  • #57
  • Apr 1, 2008 8:43am Apr 1, 2008 8:43am
Quoting Ronyn76
Thanks for sharing your system. I really like the Metatrader environment so I'm staying with it(despite the higher spread) . My goal is about 50 pips a day. Yesterday it was +66 pips and i then proceeded with closing down all orders. Nice!

One thing i would like is to have an EA watch the open profit/loss of the current trades and then shut everything down automatically once a certain pip count has been reached. I tried to to this with the Swiss Army EA but when the profit goal was reached there was no action from the EA. I guess i must have set it wrong or something. Does anyone know of a similar EA that can do this?
Hey Ronyn, I'm glad you reached your target but remember that there will be days in which long and short positions get triggered and you will need of days like this to even out a loss and be profitable at the end of the month. So it is important to follow rules, they are there for a reason.

Regarding the EA, there is one at this site called the Pseudo Hedge Expert, you can use it for hedging any number of positions and it closes your positions once a target is reached, you can set it to open new orders after closed. It is not free but it is very reasonably priced. Check it out. They do have a demo version.

http://www.sprtn.com/products.html
  • #58
  • Apr 1, 2008 8:46am Apr 1, 2008 8:46am
Quoting scottyb159
Whata nice way to wake up. All shorts executed, no longs. Up almost 500 pips. Exited first 4 shorts plus 440 (140,120,100,800). moving last one to BE SL.
NICE, Hu!

Could share your ROI with us??

Thanks, scotty.
  • #59
  • Apr 1, 2008 9:08am Apr 1, 2008 9:08am
Closed last lot at +102. ROI was about 5%
  • #60
  • Apr 1, 2008 9:15am Apr 1, 2008 9:15am
Quoting scottyb159
Closed last lot at +102. ROI was about 5%
Great scotty, thanks for sharing!
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