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  • #1
  • First Post: Aug 23, 2010 6:53am Aug 23, 2010 6:53am
Hi to all.
This is a work in progress so I want to communicate only with people who can contribute to developing of this idea.

Since I do not have any knowledge in programming I will be glad if someone who does writes an EA.
The idea is simple and is based on on the fact that the market won`t stay where it is and will have a long term direction.You can refer to the pictures for easy understanding of the system.
On the 1 level we go long and short with 0.01 lots. On the next level we add 0.01 lots. The further the market goes from the 1 level the bigger our profit will be. On the picture I have showed only 7 levels but the levels are basically related to the available margin. If someone intends to write an EA he must include these basic options:
1. distance between levels
2. number of levels
3. level 1 lot size


Attached Image


Regards
  • #2
  • Aug 23, 2010 9:18am Aug 23, 2010 9:18am
something like this already programmed, you might

wanna check http://www.forexfactory.com/showthread.php?t=109589
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  • #3
  • Aug 23, 2010 9:48am Aug 23, 2010 9:48am
Something like it yes but the lot size calculation is totally different.
  • #4
  • Aug 23, 2010 10:44am Aug 23, 2010 10:44am
Quoting begfor$
The idea is simple and is based on on the fact that the market won`t stay where it is and will have a long term direction.
Regards
this FACT is NOT existing. sad but true.

well, u may see you have 1 million $ in account, but trading 0.01 lot and that'll be fine. but in reality, none with 1 million$ will do that.
  • #5
  • Aug 23, 2010 10:56am Aug 23, 2010 10:56am
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 [b][u]this FACT is NOT existing.  sad but true[/u][/b].

charvo, Show me on this daily chart EUR/USD where the market did not have a long term direction.

Regards
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  • #6
  • Aug 23, 2010 11:12am Aug 23, 2010 11:12am
I have been trading a similar strategy for the past month on GBP/USD.

I place buy orders every 20 pips above current price and sell orders every 20 pips below current price. I keep my lot size constant, however.

Prices tend to breakout, but during ranging periods we just need to be patient, and make sure we have enough margin.

Pyramiding like what you plan to do might be a good idea if the trend is strong and obvious, otherwise might be risky.
  • #7
  • Aug 23, 2010 11:28am Aug 23, 2010 11:28am
Quoting Darren Teo
I have been trading a similar strategy for the past month on GBP/USD.

I place buy orders every 20 pips above current price and sell orders every 20 pips below current price. I keep my lot size constant, however.

Prices tend to breakout, but during ranging periods we just need to be patient, and make sure we have enough margin.

Pyramiding like what you plan to do might be a good idea if the trend is strong and obvious, otherwise might be risky.
Darren,

How many levels do you place orders? When do you take your profits?

Thanks,
BC
  • #8
  • Aug 23, 2010 11:33am Aug 23, 2010 11:33am
Check this thread out.

http://www.forexfactory.com/showthread.php?t=226059
  • #9
  • Aug 23, 2010 11:42am Aug 23, 2010 11:42am
Quoting Bobcat2
Darren,

How many levels do you place orders? When do you take your profits?

Thanks,
BC
I trade the strategy manually on Oanda and use very very small lot size.

I place orders up to 200 pips above and below current price. Take profit is at your discretion. If price has hit resistance or support level better to take profit and start the grid all over again.

It has worked so far for me. Be patient and keep lot size small.
  • #10
  • Aug 23, 2010 12:15pm Aug 23, 2010 12:15pm
Quoting Darren Teo
I trade the strategy manually on Oanda and use very very small lot size.

I place orders up to 200 pips above and below current price. Take profit is at your discretion. If price has hit resistance or support level better to take profit and start the grid all over again.

It has worked so far for me. Be patient and keep lot size small.
Thanks, Darren. What is your SL? Does each level have its own SL point, or do all subsequent level trades have their SL at the same price point as the 1st trade?
  • #11
  • Aug 23, 2010 12:34pm Aug 23, 2010 12:34pm
Quoting Bobcat2
Thanks, Darren. What is your SL? Does each level have its own SL point, or do all subsequent level trades have their SL at the same price point as the 1st trade?
This strategy has no SL. It simply relies on the price to breakout in one direction so that your overall positions are in profit.

If you include SL they will keep getting hit during ranging periods.

I like this strategy as you do not have to predict price direction. Profit is not large but can be consistent.
  • #12
  • Aug 23, 2010 12:39pm Aug 23, 2010 12:39pm
Inserted Code
Pyramiding like what you plan to do might be a good idea if the trend is strong and obvious, otherwise might be risky.
Darren, I do not reenter if the market switches direction. At every level I put only 1 order. If the market turns arround these become danglers. So if the market ranges it doesn`t drain my margin I just have a fixed loss until the price breaks out in a direction. I hope it is clear what the strategy is.
  • #13
  • Aug 23, 2010 1:00pm Aug 23, 2010 1:00pm
Quoting begfor$
Inserted Code
Pyramiding like what you plan to do might be a good idea if the trend is strong and obvious, otherwise might be risky.
Darren, I do not reenter if the market switches direction. At every level I put only 1 order. If the market turns arround these become danglers. So if the market ranges it doesn`t drain my margin I just have a fixed loss until the price breaks out in a direction. I hope it is clear what the strategy is.
Yes, that is how I am trading the strategy too.

I have come across a few times when the range of the market increases. When this happens I find that my danglers grow so that my unrealized loss increases.

I am just afraid that if we keeping adding lots and the market ranges, and keeps on expanding its range, the unrealized loss from the danglers might be too much for the account to handle.

Perhaps we can add lots, but at some point we should stop adding. Yes, I might try it this way.
  • #14
  • Last Post: Aug 23, 2010 1:41pm Aug 23, 2010 1:41pm
Thats exactly why I want an EA so we can backtest with different increment sizes. I think 20 pips is too small and thats why you are afraid of increasing lot sizes. In long term picture we are not able to identify range bigger then 400 pips. With that in mind even 20 pips increment is good enough if your risk management is porper.

Regards
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