Knitting the grid

Hi there!

I've tried several approaches in the past with mixed success and want to create a journal here with a more or less automated method called grid trading. This is nothing new, absolutely not but it works if the leverage stays low.

Basically I will trade an unidirectional grid where I have a direction where I think the currencies will move to and trade in that direction only by placing buy orders above the current level in case of a long bias and sell orders below in case of a short bias.

I will start with $1,000, my order sizes will be 1/10 of my account balance using tps of 25 pips and a grid of 20 pips spacing.

Start will be tomorrow, bias and traded pairs for now:
AUD/JPY: long
EUR/CHF: long
GBP/CHF: long
USD/CHF: long
USD/JPY: long

See ya tomorrow guys!

I play the pairs EUR/CHF, USD/CHF and USD/JPY with double leverage at the moment, so 200 units each.

Hello knitter.
Good to see somebody trading grid.

You did not mention any SL but as I understand instead of SL will be opposit order with 40 pip distance.
And how gona behave strategy in ranging market?


Another stuff. Are you consider the idea trade in direction of positiv interest without TP.
This is interest calculator for oanda http://fxtrade.oanda.com/account/interest-calculator
You can notice that most beautiful pair is gbpaud - sell.
This pair gives you +1.5 pip interest every day including weekend.
Simple calculation gives you in 1 year 1.5*365= over 500pip.
That is consistent amount of pips without any trouble involved every day trade. It is like set and forget.
Sound good? No. And I agree with you.
Exist some underwater aisberg part.
We will get big trouble if pair start heading south 5000 or 10000 pip for during few years time.
Another part for consideration, what if you will invest pleanty money to your broker, but you have to invest much to get some profit from interest, and in some time broker will shut down his bussines?
Thanks.
I can delit this post by your request to not clutter the thread.

Any comments are welcome of course!

netant, I don't use SL, that's why I use very low leverage. And I use an UNIdirectional grid where my orders are in front of the price. I reload that grid everytime it moves against me. Ranging periods are a gold mine for that kind of grid.

Reload a bit:

I read again first post and got the starategy idea.
knitter, would you mind post the results of strategy in pips or in realised profit/loss or whatever you like to get the feel of performance.
Thanks.

Hi,

i love grid strategy and its so easy and works well long term

the upside:

lets say i bet long aud/yen every 100 pips grid space @1 unit each and the price range from 58.00 to 108.00(ten years).

the longer the price stay in that range the more i got and the safest my investment woul be. As the yield and volatility will look after the position(balance).


the down side:

it take long time and unused capital(margin).

what you do with FIFO rule thingy at oanda?

i must have clear reason and good plan(time and money) to run the operation

netant, something around 5% per month should be doable.

ben10, FIFO is not a problem at Oanda as this is only an issue for manually close of positions but not if you use tp/sl.

Week 1 is over. Made about 1.4% even though the NAV is down due the move against my direction. Nothing to worry about yet.

im watching and following

Interesting that you should bring this up as a grid system has shown me the most potential for long term trading.

http://i56.tinypic.com/2mqpzxh.gif

This is EU. :shock:

http://i54.tinypic.com/sl0mzc.gif

absolutely!

did you trade that EA 24/7 ? same trade size at every 20 pips grid space?

i trade aud/yen long only , small and slow

http://img689.imageshack.us/img689/6484/aussieyen.png

Yes 24/7. I am experimenting on the grid space. The one shown is 5 pips. I was up over 29k pips in 2-3 weeks (note extremely good conditions for EU and EG and GU has been absolutely putrid). Now up only 20k pips waiting for the next push in the direction of the trend.

But this is early in the forward testing phase. So conditions might be just ideal.

i believe you use stop loss, whats the need for a trend direction? can it be hedge to control the exposure? after all its a grid system , longterm play

I don't use TP or rather my TP is rather large. So if EU has 15k in accumulated pips, I would rather see it continue in the direction that helped accumulate the pips. I hope that helps clarify.

this is the secret and the holygrail of grid trading where only so few people had "credo" or trust and confident.

for some it will bail out after 100 or 1000 pips down, the mind not ready to handle though of losing, dont mind the heart wich is pumping fast 24/7.

when you see a tennis ball on the court played, it bounce from one side to other more often. Occasionally its fell out of the court.

if you can handle the danglers in grid system you will be ok and you will face many eureka moment

How about qualify this with the word "sometimes" and leave out "its so easy." Thanks.

Week two...

Account after week 3:

Why don't you trade as a daily trader, hunting 50 or 100 pips per day ... i believe will be more profitable for you ... during last 5 years did try all tricks in the book all money management ways all robots even i end up expert in mql programming for indicators and robots on mt4 platform yet nothing was enough to make my account grow without stress ... this is why i dived now investment strategy to 2 many goal :
1- i invest in my health, train good, sleep good, and never let the market go under my skin
2- i trade 1h chart as front line war zone, risking max 50 or 100 pips for my trade as stop lose ... to hunt 50 or 100 pips as take profits ...

looking to your performance above, i believe you are not controlling good losing trades ... just cut lose small and let profit grow till 50 and 100 pips and you will reach 2000$ level shortly

Also time is money, like 2 weeks passed and you still 1002$ ... meaning directly automatically change the setup you are using, trust me when i tell you master one or 2 charts and they will be more then enough to make you make good income from forex ... my favorites are the following
eurusd cos its the most traded
gbpusd cos its the most crazy
gold cos its the only one usd can't beat

wish you all the best in forex