Can a grid trader survive?

Can grid trader win survive .

Can a grid trader survive?
Can a trader survive? Failure rate about 95%.....but can a trader survive....5% will....YES traders can survive....

Now from those 5% of the successful traders if you ask them can a grid trader survive...most will jump and say no? most of them.....
Cause they have not found a way to survive from grid trading. Being in the 5% does not necessarily make you a "know all" in trading....and even if you trade for over 20 years still does not make you a "know all"......
Of course you know more than a newbie...cause you have done more mistakes....tried more methods...etc...etc......but very far from knowing all....

Cause a trader is only successful "an expert" in his way of trading.....there are millions off ways ......millions of combinations.....no 2 traders trade the same system the same way.....so you can imagine.....

Grid trading.....what type of grid trading? One direction grid trading? Bi- directional grid trading? ......using marti or not......all kinds of combinations.....

Ok...to make a long story short.....YES grid trading can be very successful (my opinion) with very small risk also.....but then again you have to find the way to trade it that way.....and someone may never find it.....

I believe there is no impossible in trading just because someone cannot do it..or says it cannot be done....the is always someone that does do it in the end.....

Find a method that you feel comfortable with and try to perfect it....make it yours....

Good Luck!

4x

the issue with grid trading is it cant be back tested.
single trade destiny is based on itself. but when trading grid the destiny of single trade is based on the next executed ones. here the endless combinations comes into play.

so any strategy created can not be back tested. only slow/boring forward test is possible.

good luck

any one know today market will open or not being ester

If you use run-of-the-mill public raped grid strategy then you can expect almost 100% fail. To make it workable you need to eliminate the flaws and adapt it for your money management strategy.

I once toyed with a hedged grid where BUY and SELL pending orders were placed at 20 pips intervals from a reference price level. Over time, the price demonstrated bias towards one over the other and the net sum was the profit. I experimented with different exit strategies including trailing stops ranging from 40 to 100 pips and closing the trade basket on a pair when the net profit reached a target (say 1%). I saw the balance move up and down. The demo account was up about 10% before I got bored and pulled the plug after 3 months.

In retrospect, I think that this kind of strategy can be profitable in the long run if risk per trade is kept very small (I used 0.1% of the balance) and more importantly start the center of the grid at a "watershed" price level, i.e. a level from where the price will have a strong tendency to move in only one direction over a reasonable distance before reversing. These are not difficult to find, e.g. price tends to breakout of a consolidation area with a lot of momentum before slowing down to reverse. One can use a squeeze of Bollinger Bands or contracted Guppy EMAs to find out areas of consolidation if naked charts are not your thing.

The great thing about such a system is that it doesn't require predicting the direction of price move (provided the reference price level has been selected carefully). Moreover, it is more forgiving of a botched entry as ultimately the profitable trades exert their weight to overtake the losses. It does require patience, discipline and strict position sizing.

With respect, it's easy to have an opinion. Everybody who posts here has one. The question is: is it just a wild guess, or do you have a logical argument to support it?

By your logic it should be possible to beat roulette, i.e. nothing is impossible just because somebody says it can't be done; if there are enough different ways of approaching a problem then at least one must surely work; etc.

Well I believe that the answer to the OP's question is no, and here's my supporting rationale:

Unless you find a physically damaged wheel, you can't beat roulette in the long term. No matter what playing strategy, or money management strategy you apply, the house edge is always 2.70% (or 5.26% on wheels with 00). No matter how many different possible strategies there are, or how many people say roulette can or can't be beaten, it doesn't change the house edge.

Using the same premise, if price moves exactly 50/50 at all times (i.e. exactly 50% probability that the next tick will be an uptick, and 50% a downtick), then ALL trading systems have an expectancy of zero, and the 'house edge' against you is always equal to the transaction costs you pay your br0ker.

If forex is beatable, it's because price (unlike the roulette wheel) doesn't always move 50/50, aka there are 'inefficiencies' or 'non-randomness', and you're able to construct a system to exploit these. So the answer to the OP's question becomes: Can a grid system in itself identify market inefficiencies? Grid systems in themselves perform no analysis, therefore the answer is clearly no.

Now there are zones (supply/demand; support/resistance; call them what you will) where price is more likely to stall, and possibly bounce, than it would 'normally' otherwise do so. If the grid levels were placed at these zones, then it might be possible to gain some kind of edge. There are plenty of other potential inefficiencies (e.g. taru gives an example in his second paragraph) but it would be possible to trade these without using a grid; the grid is effectively doing nothing more than providing an average entry point into what is otherwise a TA-based system.

Another argument might be that, historically, price has never before moved more than X pips in a given direction without a Y pip retracement along the way, and construct a system around a premise like that. But you'd need some extremely comprehensive evidence to provide enough statistical confidence that these limits were bulletproof going forward. I would also use a argument that's vaguely similar to yours, namely that the longer you trade for, the more likely you are to eventually encounter a price pattern/scenario that defies the limits used in your testing, making risk management important. Systems that operate on the premise that "it will continue to work provided that a given scenario never happens" are not very robust IMO.

Hence my answer would be no, grids in themselves can't offer any kind of long-term edge. As for the thread topic of survival, an edge-less system will eventually cause ruin, and the more aggressive the MM, the more quickly ruin will occur.

Hello Hanover,

I agree with some that you are saying....like.....

"Now there are zones (supply/demand; support/resistance; call them what you will) where price is more likely to stall, and possibly bounce, than it would 'normally' otherwise do so. If the grid levels were placed at these zones, then it might be possible to gain some kind of edge. There are plenty of other potential inefficiencies (e.g. taru gives an example in his second paragraph) but it would be possible to trade these without using a grid; the grid is effectively doing nothing more than providing an average entry point into what is otherwise a TA-based system."

I have been trading for a very long time and the last 2 years have been trading grid with great success and limited draw down. I understand also that a lot of traders do use what they consider logic and the "it can't be done" (in theory) but my experience has proved me that this is all not correct...it is all only theory.
There will always be the one that will find a way (like the card counters in the casinos that they kick out). Now survive in long term.....well a lot of systems do not survive in long term.....markets change.....and maybe tomorrow my grid system will stop working....but since almost 2 years now I am very happy with grid trading and not the conventional way witch most traders and the way it looks you also are describing.

In my life I have created companies from 0.....and anyone that knows me here in Montreal knows that....when people told me it can't be done.....cause in there head it was unimaginable ....no it can't be done....if everything was based on theory then there would be no innovation, nothing new would be out there, people would still ride in horses and Ford would have never built the 6 cylinder engine when his engineers where telling him "it cannot be done"....people like this move everything to the next levels...not logic.....

So I am sorry I have to answer YES you can survive.....for how long....no one knows , only GOD.

With respect.
4x

any one suggest me a currency pair that is more swinging means some day up and some days down. not like eur usd. and also if possible more daily range

Hi David,

I agree with these comments 100% and want you to know that I always enjoy your posts. Even if forex is a 50/50 game(witch in a way it is...it is going up or down) I believe that we as traders try to tilt the odds in our favor, one way or another, even if it is a small percentage to get the edge.....this can be done with a lot of work in my opinion.
Roulette for sure you can't beat .....the longer you play the less the chances you will win anything, there is no way you can put the odds in your favor at that game. Thank you for the congratulations but if you knew how badly I have failed to get there you would take them back

I will say a couple of things about my method...

First of all the method has to be successful to start of with.....
The way I use the grid is I break down my trade in let's say 10 entries.....
This way my full position does not enter one shot.....if the entry is not timed correct maybe I have entered only 2/10 of the position....so when it goes against me my loss is small. When my full position is initiated all 10 levels I close it at a certain s\d point.

I never martingale .....
Never average down.....or trade opposite.....I trade one direction....very simple...

When the market gets choppy I can sit around till the trend continues or changes direction and close my position all this long term charts....no day trading on grid for me....

Good pips too you too!

4x

4x,

Thanks for your explanation. Sorry, I deleted my last post, because it was pretty much a repeat of my earlier one.

Anyway, keep up the great work.

David

Actually, you are quite wrong in what you are saying. If you can't backtest grid trading, I can only suggest that you find yourself a broker that can give you proper tick feed. I am currently backtesting a grid EA that is bidirectional with hedge. Although looking at my MT4 in visual mode, it is quite slow. It takes nearly 2-3 days for 1 year of data to run at tick mode, but I am doing it.

For anybody's information if it is useful, if you grid trade you would need approximately £500 per 0.01 lot traded so your account doesn't blow. This is based on a 10 pip bidirectiononal grid hedged at a TP of about 100 pips. Although it can be lengthy, it is my belief that grid trading bidirectional in a hedge on the GBPJPY or equally volatile pair is a no lose system. You just need deeper pockets to have your money ties down for a great length of time as some hedges don't close until 4-6 weeks after a hedge begins. If you are patient though, I think it is a path to financial freedom and a stress free way of trading rather than spending countless hours staring at the screen and also for a less academic that struggles with finding a strategy that works for them.

Just my 2 cents even though this thread is quite old.

Cheers!

Daniel

Agreed! Most Grid EAs are rubbish. I have seen some terrible ones. I am quite fortunate to have what I have at the moment and it seems to be working for me.

Cheers!

Daniel

Though it has nothing to do with the core topic in particular, i may add something here.

The calculation speed (within a given mode) during backtest is no indicator for the qualitiy of the tickdata or the qualitiy of the "calculation" itself. It is driven by the cpu consumption of the robot mostly. So either a rubbish code and/or a complex algorithm is the main cause for the backtesting speed.

I believe no. You've got to rely on your analysis only and be extremely sober-minded before you open a trade

Saw an EA for $30K..after scrupulous analysis found that it works on S/R levels 30M timeframe, just well backtests and thoroughly considered MM, LOL.
Same here on my Hotforex free of charge.

After that I don't know words " buy EA"

A grid trader will only survive if his capital base is $100 000 and starts gridding from 0.01lots on H1 charts...

return per month should be around 5-10% ...not bad...

of most importance is the grid technique and sequence..

huge capital is of utmost importance.

I guess it has stronger relation to EA users.

First thing I have to say is that I'm a terrible trader! I tried to learn but I just don't have the patience, discipline and probably the IQ to be a swing or trend trader. Basically I suck at anything to do with reading charts.

So I had to really think how could I be a part of the winning 5% and be a terrible trader at the same time!
My theory is, that if I had enough capital I could grid trade an instrument and capitalize on the back and forth price. Simple right. So last year I opened a demo account to see if my theory was right.

Here is a link to my results so far:
http://www.fxblue.com/users/951650
As you can see I have a large negative open P/L right now, I wanted to see what would happen if I got a little reckless with my risk management.
My tips:
Grid trading is more about money and risk management than trading.
Martingale grid systems will blow up your account.
Find a market that is at the top or the bottom and trade bottoms up and top down.
You need discretion for the following reasons:
To let your winners run when they're is a trend
To widen the grid intervals in a trend for your losing positions
To adjust the lot size, when in the high/low range, you can increase your size and when off, decrease the lot size.

I haven't seen a systematic grid EA, that does all the above so I believe systematic grid trading will fail but I think a limited managed EA will work.
Rollover fees will build up so find an instrument with zero rollover.
Have a demo for your grid system and another to test EAs!

I found that grid trading is less stressful and requires less time reading charts. I still feel I have a lot more to learn so sticking with the demo for now and waiting for an instrument to reach a new high or low.

I would say it's all depends on how the grid is placed. You all talking about grid that is expecting the trend to breakout. You all will need to wait for a trend in order to get profit.

But how about the reversed one?
I mean, you all know that there's a concept of price consolidation, price exhaustion, Fibonacci retracement, swing movement, Fibonacci Arc? So the bottom line is that every price movement is always trying to retract back. So when the price goes down, you have to keep buying instead of selling.
You'll be lost at first, but when the price retracts, you'll be in profit. Does that sounds logical?