Pending order Grid system

I am not sure whether this trading strategy has been discussed anywhere but the strategy is as follows:

(1) Open two pending orders one buy and one sell at the current price.
(2) When one pending order is triggered, the other order is canceled.
At the same time another two pending orders (one buy and one sell are opened) at the price at which the recent pending order has been triggered.
(3) The pending orders should be in equal lots.
(4) It would be appropriate to start opening the orders at the start of the
trading day and close them at the end of the trading day.
(5) If the day follows a particular trend then it will result in good profit else
the loss as i expect will be very less.
(6) This strategy is suitable for trending currency pairs.
(7) There should be no target profit or target loss for any order
(8) The strategy aims at accumulating orders in the direction of the trend till the trader closes it after the achievement of target profit.
It limits the number of orders to only one boy and one sell order within the price range during sideways movement.
The loss during the sideways movement is limited to the width of the grid + Spread.
There should be a target profit for a day.
You may decide to close all the orders when a certain profit is achieved for the day.

(8) This strategy can be applied to even NFA complaint brokers like IBFX where the same currency hedging is allowed intraday. We close all the orders at the end of the day.

I have not yet implemented this strategy. as I feel an EA would do the job better.

The variables which the EA should be having are
(1) the distance from the current price to set the pending orders.
(2) The time when the EA should be activated
(3) the time to close all the orders
(4) Target profit if the trader wants to set.

No indicators are needed for this system.

I have come across some pending order EAs , but none of them act as per the strategy laid above.

If readers have any idea of such an EA existing, I request them to guide me to the link.

Place the attached indicator on any currency chart with a 5 minute time frame.
Time frame is immaterial but on 5 min TF visibility will be good.

Set the candle size to 20 for a 4 digit broker.

This will help to get an idea of how the strategy works

Try using vgrid ea. Start it at the daily open.

http://www.forexfactory.com/showthread.php?t=109589

Thank you plasma,

I recollect i have gone through it some days back but let me see again.

My grid strategy opens trades in the direction of the trend. not against it.

I will check the ea you suggested once again


PS.

I have gone thru the EA now.

The EA accumulates orders when the market goes sideways. But as per my strategy ther is no accumulation of orders. JUst one buy an done sell order will be active during sideways movement till a breakout occurs. So no there are no death trades.

thanks for sharing....if you dont mind please explain with figure....because i still dont understrand....

just playing with this idea today... pretty tough doing manually. one thing you will have to watch for with an ea would be say you have a buy at 1.5 and price drops down to a sell criteria, then price goes back up to 1.5 where there should be another buy but you already have a buy at that price level so you shouldn't enter another one there.

this way you could only have 1 buy and 1 sell at each price level. this would help with accumulation of orders. is this what you are talking about?

or do you even see what i mean?

would have to have a pretty good run without retrace to profit

not at all worth doing manually. i tried

Yes there will be no accumulation of orders if the price ranges between the grid distance. Just one buy and one sell. If the prie breakouts and trends then the orders may accumulate depning upon the traders equity and money management.

As you said the strategy is difficult to implement manually if the grid distance is small, unless we have an EA for it. If we want to carry out manually then we have to increase the grid distance say above 50 pips or so.

But I am sure that the profits will be high and the losses will be very small for this strategy.

I will explain it with a figure soon.

Hm1799,

The explanation of the strategy is attached in pdf format.

In your .pdf scenario you have:
- buy level 5, sell level 4. OK, the loss is -20 pips.

You can extend your scenario analysis, and if I'm right, you can have further:

Scenario A. Price at level 3 = sell.
If the price go back to level 5, you have 0 - 20 - 40 = -60 pips loss.
(5 to 5 = 0; 4 to 5 = -20; 3 to 5 = -40)

Scenario B. Price at level 3 = sell, then price at level 2 = sell.
If the price go back to level 5, you have 0 - 20 - 40 - 60 = -120 pips loss.
(5 to 5 = 0; 4 to 5 = -20; 3 to 5 = -40; 2 to 5 = -60)

Is not easy to trade the grids...

When the price reverses back buy orders will be also opened which will negate the losses created by sell orders.

Yes it is not easy to trade. But is not impossible either. May be an EA would help or we should keep the distance between grids larger to give us enough time to place orders during quick price movement.

if price start from level 4, then go to level 5 (buy at level 5), then go to level 4 again (buy at level 5 & sell at level 4), then price go to level 3(buy at level 5 & sell at level 4,3), then price go to level 4(buy at level 5,4 & sell at level 4,3), then price go to level 3(no new order, buy at level 5,4 & sell at level 4,3), then price go to level 2(buy at level 5,4 & sell at level 4,3,2)
So total for buy ==> 5 to 2 = -60, 4 to 2 = -40
total for sell ==> 4 to 2 = 40, 3 to 2 = 20, 2 to 2 = 0

Finally grand total -60-40+40+20 = -40 + spreads for every orders..

there are bad scenario :
if price start at level 3, then go to level 2, then 3, then 4, then 3, then 5, then 4, then 6, then 5, then 7, then 6, then 8, then 7, then 9, then 8, it is about -140 pips plus spreads for every orders....

Will it be the extreme of either of the two bad scenarios:

(1) From level 1 to 10 all the sell orders will be executed and all the buy orders executed but one less than all the sell orders.

(2) From level 1 to 10 all the sell orders will be executed and all the buy orders executed but one less than all the buy orders.

Got to calculate the loss at this stage.

You can test Ronald Raygun or Keramikus EAs here: http://www.forexfactory.com/showthread.php?t=99592

@simplecoders
Just a question:
- we have buy on level 5,
- we have sell on level 4, do not set buy orders on level5
- we have sell on level 3. In this case is allowed to set a buy order on level 4?

With this rule you reduce a little bit the losses in my scenario A. from -60 to -40, and in B. from -120 to -60.
But you loss everytime in negative trends (Pips step * Level difference).

Thank you Swingman .I will go through them.

For each trade you have to pay 2,3, or 4 pips up front. So each time you get to your 20 pip gain, it would be minus your juice you paid your broker.
My broker is MBT and sometimes if the pair is not the main pair with a USD at the back or front, I could swear I'm paying 6 pips to start with to get into the trade. And I could swear my Stop Loss Watch Dog and my Swiss Army EA works, but they don't let kick in my other EAs if I use them. Where do I get a broker that will let me use my EAs? I'm using a Cloud Server also. I find this Grid Trading an exercise in chaos management. And chaos math is classified above top secret. I learned that from "Goodwill Hunting" movie about the CIA. I've been basically Jacko Trend Trading and I'm having a hard time staying with the program. I've been basically trading USDJPY and GBPJPY and I swear the BOJ, Bank of Japan, causes the pips to go 100 to 500 pips. If I could come up with a pending order system to put pending orders out there on a Friday or when it starts up Sunday night and hit some of those cash infusions from the BOJ. Right now with this Jacko Trend Trading System, the big counter trend takes me out by my TS on my SLWD. I feel like I'm playing chicken with the BOJ.

Hello,
time is going and this thread is 2 years old..
But, if other members still are interested, is possible to continue discussion.
I just prepared a piece of code. If I understand propose strategy , pendings inside frame should correspond to
mentioned requirements? (Look attachment, please). Two orders 0.1 lot at bottom.

Thanks
Hanzov