Forex Circle Grid

Here is the plan:

1. Select 3 pairs of majors out of the following to form a "zero exposure" forex circle, for example

Long EURUSD, short GBPUSD, short EURGBP.

2. The criteria for choosing the 3 pairs and long/buy decisions are:

a. each pair's daily trend - long if the trend is up, short if the trend is down (I zoom out the daily chart to see the "big picture").
b. if for instance the three pairs trends (therefore long/short) don't enable the forex circle to form a zero exposure, for instance, EURUSD down (therefore short), GBPUSD down, so should be short, EURGBP range down at the support level, then, choose two pairs following their trend and the 3rd pair's long/short is determined by the zero exposure need. Edit: when E/U down, E/G up and G/U down, then the rough conclusion is delta USD>delta Eur>delta GBP, and considering the pip value, then first select GBP follow the observed trend (down). So choose short G/U, then long E/U and short E/G.

3. Use Grid approach to open/exit trades for each pair. the grid settings are:

a. lot size = 0.1 (the minimum lot size allowed by the broker);
b. take profit target = 100pips, if take profit, the new position will be opened "right away" (note: this is just the current thinking, I will need to think through the t/p approach for this plan);
c. If market moves to opposite direction of the 1st lot, then open the 2nd lot size =0.1 (no increase of lot size), space from 1st lot is 100pips (changed from previous setting of 18pip, which is too tight and has no basis for doing so), the 3rd lot size =0.1 (space from the 1st lot is 200pips) and the 4th lot size =0.1, space from 1st lot will be 300pips. (again, I will need to do some statistics on grid spacing - such as opening a long position after the close moved xxxpip lower versus last y days low)

I will revise the exit rules later.

What is your point to close at 10 pips profit if you reopen the position right away ? You are adding the spread to your expense each time.

.01 is tool low lot size should we increase the lot size ??

FerruFx

Good question, and I would love to learn your perspectives on this.

I know there are many open ends in the plan.

Reopening immediately a position (same direction) after a take profit has no purpose except paying the spread. That's an unnecessary 'loss'.

I should change the circle to

long E/U, short E/G and short G/U based on current these three pairs trends.

It seems the expectancy could be positive by using hourly ATR for each pair. U>E>G means delta U>delta E>delta G,others follow the same expression.

Revised the positions to +E/U, -E/G, -G/U, and take profit to 100pips (for the time being, I need to think about what is more sensible for t/p method).

It would be great to update your post #1 if the initial rules are changed. That would avoid confusion ...

Unless you were talking about the current entry based on your trend analysis ...

I may have misunderstood!

FerruFx, good advice! I edited the 1st post.

Great! Thank you...

thanks for sharing. where could we get the table you post here? thanks for your info.

short G/U took 100pip profit yesterday, and re-open another short position. The three positions' P/L stay most of the time like following

long E/U loss
short E/G loss
short G/U gain

and the net 3 positions' P/L was a gain (including the closed 100pip from short G/U)

This is in line with what the table showed above U>G>E, which should have the higher probability among the 6 scenarios.

Now, what would be the criteria to say that the probability scenario of the three pairs is confirmed to change?

long U/J was opened following different system.