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Grids Without Greed

  • #21
  • Aug 9, 2015 9:57am Aug 9, 2015 9:57am
Successful currency trading is easier than cooking: price action acts as fuel for indicators and heats up the carefully traded strategy to give us those green pips
Only in dictionary success come before work, so here is the smart work we need to do: Observation! Patience to observe price action from a distance (i.e. on a higher time frame chart) is the key to make more money in this business. Simply because this best practice avoid us from taking an impulsive trade which might be ready for a quick reversal against us! Thus we filter out approx. 20% of the failures that create 80% of our biggest losses. Above all, we get to enter trades just before price move happens, saving us from emotional the toll of waiting after entering a trade.

did you add trend identification module to ea?
  • #22
  • Aug 9, 2015 5:58pm Aug 9, 2015 5:58pm
Quoting colyske
{quote} Hi Yonnie, I think that's a great way of trading grids, especially the diversification part. Just trade with small lots but across many unrelated pairs. When one pair is on your neck, another pair compensates with some green figures, all you need is patience and an exit plan if things threaten to run out of hand I will look up Xaron and pick points from him, thanks so much for your contribution.
yep, you got it!

in ranging or low momentum conditions (A/C Nasdaq100 aus200 etc) I have a bi-directional grid; on strong momentum a directional grid only with the trend (oil = down only).

I think the China saga will play out in the next year and expect the uptrending stuff to go down a lot in the near future, think GBP SGD and equity indices like Nasdaq100 etc. Strong buying of JPY as a safe haven.
You can see that G/J can`t reach their former high and I`m short this pair, but I might be wrong or too early.

my grid focus of Nasdaq100 has now changed from bi-directional to directional = short only.

I would advise anybody trading grids not to add at intervals, but only when price is turning back into your direction.
adding at intervals might work out very well in low momentum times for quite a while, but you WILL blow your account eventually when strong trends return.
  • #23
  • Aug 9, 2015 6:05pm Aug 9, 2015 6:05pm
Quoting yadgayan
Successful currency trading is easier than cooking: price action acts as fuel for indicators and heats up the carefully traded strategy to give us those green pips Only in dictionary success come before work, so here is the smart work we need to do: Observation! Patience to observe price action from a distance (i.e. on a higher time frame chart) is the key to make more money in this business. Simply because this best practice avoid us from taking an impulsive trade which might be ready for a quick reversal against us! Thus we filter out approx....
Hey yadgayan,

I am yet to implement the module on the EA. Problem is am not good at coding, I wish we could have some coders who could implement the suggestions aired about this EA.

However, I have gone through the thread by iamgotzaa and I think it has much of the ideas and concepts I was talking about and I think this EA can be merged into iamgotzaa's EA successfully, so we could probably just switch to that thread..

Thanks so much for the advise you have included in your post, that's the kind of thinking we all need to embrace to succeed!
BitByBit..
  • #24
  • Aug 9, 2015 6:15pm Aug 9, 2015 6:15pm
Quoting yonnie
{quote} yep, you got it! in ranging or low momentum conditions (A/C Nasdaq100 aus200 etc) I have a bi-directional grid; on strong momentum a directional grid only with the trend (oil = down only). I think the China saga will play out in the next year and expect the uptrending stuff to go down a lot in the near future, think GBP SGD and equity indices like Nasdaq100 etc. Strong buying of JPY as a safe haven. You can see that G/J can`t reach their former high and I`m short this pair, but I might be wrong or too early. my grid focus of Nasdaq100 has...
Hello Yonnie,

The greatest trick in grid trading is knowing where/ when to add a trade, and also the point at which to concede defeat. We must find a good formula for that.
China could play a big role soon, and I also think JPY is on the verge of a turnaround, better a short for now or probably just staying away altogether..
BitByBit..
  • #25
  • Aug 9, 2015 8:39pm Aug 9, 2015 8:39pm
this is self-destruction


what is entry/exit rule anyway? or it's just blindly place order.
Attached Image (click to enlarge)
Click to Enlarge Name: self destruction.PNG Size: 37 KB
Holy grail, pls pm
  • #26
  • Aug 9, 2015 10:53pm Aug 9, 2015 10:53pm
[quote=colyske;8425899]{quote} Hello Yonnie, The greatest trick in grid trading is knowing where/ when to add a trade, and also the point at which to concede defeat.[/quote/]

I can only speak for the daily TF.
I will not add trades randomly at intervals in a losing trade.
Like I said before: if I`m long and price goes down against me, I will wait until price turns back up in my direction and add another trade for a better average price.
Price might escape down through the grid, but most times price will return to the bottom of the grid and you can close out your position (2 trades now) at a small profit.
If price goes down again for a couple of days, the trend has obviously changed and now we go short and follow the new trend.

Basicly I never concede defeat and as my account grows over the years, that one trade that got away will be smaller and smaller until I close it out in the future.
  • #27
  • Aug 10, 2015 6:15am Aug 10, 2015 6:15am
Quoting iamgotzaa
this is self-destruction what is entry/exit rule anyway? or it's just blindly place order. {image}
Hi iamgotzaa,
Currently there is no entry filter, its just enter a buy if there is no buy, and vice versa, on new bar.. As for the exit, it adds recovery orders and averages their takeprofit, then closes them out as a basket, or they are all closed when the account equity grows by a certain percentage from its previous high. Only problem is managing drawdown but remember even when for instance the buys are in drawdown, the sells are still operating and contributing to equity growth.

I actually think that in the above case, if we can play around with the lotsize of the sells, we can protect the buys very successfully until the return to hit their takeprofit..

Kindly think about that.

Cheers and thanks for checking this out.
BitByBit..
  • #28
  • Aug 10, 2015 6:26am Aug 10, 2015 6:26am
Quoting yonnie
Quoting colyske
{quote} Hello Yonnie, The greatest trick in grid trading is knowing where/ when to add a trade, and also the point at which to concede defeat.[/quote/] I can only speak for the daily TF. I will not add trades randomly at intervals in a losing trade. Like I said before: if I`m long and price goes down against me, I will wait until price turns back up in my direction and add another trade for a better average price. Price might escape down through the grid, but most times price will return to the bottom of the grid and you can
...
That is cool. Do you do it manually or you use an EA for that? I think that's what we would like this EA to do. Actually that's what iamgotzaa's EA is doing, its not just adding trades randomly just because the gap has been exceeded.. waits till the price is moving back.
BitByBit..
  • #29
  • Aug 10, 2015 5:59pm Aug 10, 2015 5:59pm
I`m glad that adding on more trades is not done randomly, but only after price is coming back in your direction.

imagine price going against your trade for 500-1000 pips without much retracing........

I trade the daily TF on 10-12 "unrelated" instruments and I wont even place a trade every day, so I have no use for an EA. the human brain is so much better than an EA anyway.
very relaxed way of trading as I check my trades only twice a day, but can still at least double my account every year.

good luck with your search.
  • #30
  • Aug 12, 2015 6:35pm Aug 12, 2015 6:35pm
Quoting colyske
{quote} Hi Antonsatu, Thanks for the advice. In your own opinion, what would you call trading, and where do you think am going wrong? I think it would be good to enlighten me and the other people reading this thread. After all, we are here to help each other and to succeed with each other. Thanks in advance.
Hi Colyske,

Nobody is able to enlight the other people. one can only inspire and show the path/way. One should do oneself to be enlighted.

Regards,
  • #31
  • Aug 12, 2015 6:38pm Aug 12, 2015 6:38pm
Quoting yonnie
I`m glad that adding on more trades is not done randomly, but only after price is coming back in your direction. imagine price going against your trade for 500-1000 pips without much retracing........ I trade the daily TF on 10-12 "unrelated" instruments and I wont even place a trade every day, so I have no use for an EA. the human brain is so much better than an EA anyway. very relaxed way of trading as I check my trades only twice a day, but can still at least double my account every year. good luck with your search.

hi Yonnie,

you are right. trader should have his own aim and plan to reach the aim.

regards,
  • #32
  • Aug 13, 2015 5:23am Aug 13, 2015 5:23am
Quoting yonnie
I`m glad that adding on more trades is not done randomly, but only after price is coming back in your direction. imagine price going against your trade for 500-1000 pips without much retracing........ I trade the daily TF on 10-12 "unrelated" instruments and I wont even place a trade every day, so I have no use for an EA. the human brain is so much better than an EA anyway. very relaxed way of trading as I check my trades only twice a day, but can still at least double my account every year. good luck with your search.
Thank you Yonnie,
The search continues.

All the best!
BitByBit..
  • #33
  • Aug 13, 2015 5:27am Aug 13, 2015 5:27am
Quoting antonsatu
{quote} Hi Colyske, Nobody is able to enlight the other people. one can only inspire and show the path/way. One should do oneself to be enlighted. Regards,
Hello Antonsatu,

I guess am different then because whatever I know so far, I learnt almost all of it from other people. And I think that's why there are forums, for people to learn from each other.. to enlighten and inspire each other..

All in all, thanks for your contribution.
BitByBit..
  • #34
  • Aug 13, 2015 5:43am Aug 13, 2015 5:43am
Just to recap or clarify on what my idea is..

It is definite that in the forex market, there is no way that price will move in one direction without retracing even one pip or point. At least not in the major pairs. There is always some retracing here and there. Question is how to 'survive' until that retracing opportunity comes. So, as long as you can reasonable control the drawdown in your account, you can definitely afford to wait till the price retraces a bit and you either get out with a small profit, or just break even, or concede a smaller loss.

As the price is moving to one direction and you keep managing the drawdown, another part of your EA is busy hitting takeprofits on that direction (if the price is going downwards and you are managing the drawdown from the Buy orders, the Sell orders will be very much at work taking profits, and vice versa). That is in the case where the price is trending (which is the worst case scenario for grid trading) and you will successfully walk out of it.

If the price is on a range, then both the buys and the sells will be busy taking profits as the price bounces inside its tunnel.

It is this concept that I would like us to give a thought to, and make a nice system that would simply do the above. The main trick is simply managing the drawdown and if we can do just that, then the EA can thrive in any pair in any market condition (apart from the obvious catastrophes and 'de-pegging' of currencies) especially in the major pairs.

If you are good at coding or you know someone who could give this a shot, please get involved, its worth the while.

Cheers all.
BitByBit..
  • #35
  • Aug 13, 2015 1:28pm Aug 13, 2015 1:28pm
I have made some modifications to test how it can manage recovery of drawdown situations as attached. It is however generating some errors during backtesting and its not calculating lot sizes the way it should. Could someone please help me to polish it up and remove the errors?
Attached File(s)
File Type: mq4 Double_Edged_Beta.mq4   47 KB | 517 downloads
BitByBit..
  • #36
  • Aug 16, 2015 4:21pm Aug 16, 2015 4:21pm
Please don't re-invent hot water! Use the skills of experienced programmers to deliver you the program instead, or find an existing one of high quality. Problem is you'll write a program (probably of inferior quality and ugly hacks) with a lack of programming skills and 300 modifications by 50 different people and you'll end up with a mess full of bugs.

Also, please don't take this as an insult, I'd rather propose this instead: a very successful grid EA with reverse hedge capabilities (exactly what you are looking for) is "super money grid". Look it up on Google, it's exactly that name, and bonus points: it's free and the coding is quite good!

To be completely honest, I have tried it myself and... it works great! It was a couple of years ago and had great results. Still in the end I ended up with large drawdowns that were sickening. Very stressless system, until those times of huge drawdown, then it's endless worrying. Also check this thread on another forum where this member "ElectricSavant" ran some experiments: http://www.elitetrader.com/et/index....bp-usd.234756/

Very interesting, with smart money management (and taking the assumption that a black swan event will not happen) you can make 35-70% yearly. Interestingly, after 160 days+ The account grew already +- 200% (because of a positive black swan) and didn't blow up. It came close a couple of times though, so it's still a super dangerous trading system but if the markets are ranging, it can be a massive moneymaker. Unfortunately the thread is already a couple of years old so the screenshots have "eroded" and are no longer available... the thread starter also stopped posting because he felt the thread had served its purpose, but still a great read, text and statistics are still available and have been logged in a journal kind of way.

Use this info at your own risk, but I guess we're all grown-ups here and we are capable of taking responsibility so no need to worry.

PS since it's a couple of years old, with the changes of MT4 you might need some minor adjustments to get it running, or it might just run perfectly fine out of the box anyway, it's a while since I ran it so let us know how it goes.
  • #37
  • Aug 17, 2015 6:35am Aug 17, 2015 6:35am
Quoting ExForX
Please don't re-invent hot water! Use the skills of experienced programmers to deliver you the program instead, or find an existing one of high quality. Problem is you'll write a program (probably of inferior quality and ugly hacks) with a lack of programming skills and 300 modifications by 50 different people and you'll end up with a mess full of bugs. Also, please don't take this as an insult, I'd rather propose this instead: a very successful grid EA with reverse hedge capabilities (exactly what you are looking for) is "super money grid". Look...
Hi ExForX,
I have checked the 'super money grid' out and I think it is a pretty good grid EA, thanks for pointing us to it. It is encouraging to know that you have confidence in it and you have even used it successfully in the past. However, it is missing the key features which am looking for in this thread. I have noticed that in a trendy situation, it keeps adding orders and increasing lotsizes infinitely, without giving consideration to the accumulating drawdown. Also, it seems to have fixed distances between grids such that as long as the price is X pips away from the previous order, it just adds another order rather 'blindly'..

I am looking to have a system where the EA actively manages drawdown by adjusting the opposite trade lotsizes relative to the orders in the other direction, to effectively hedge out the 'bad trades' and protect equity. It should also limit the lotsizes as we don't want an EA opening 5.0 lots orders in a $1000 account for instance.. and much more. I am yet to find an EA that does this, and would be very happy to find an already existing one, but I believe we have guys who are very much able to come up with such, or even better, through brainstorming and good coordination.

We may definitely not reinvent hot water, we can still invent yet another way of heating the water in a safer manner.

We will check it more closely to see what we can borrow from it, and from others too, and come up with a more refined system which am sure you and everyone else will love once done.

Thanks so much.
BitByBit..
  • #38
  • Aug 17, 2015 7:02am Aug 17, 2015 7:02am
Quoting colyske
{quote} Hi ExForX, I have checked the 'super money grid' out and I think it is a pretty good grid EA, thanks for pointing us to it. It is encouraging to know that you have confidence in it and you have even used it successfully in the past. However, it is missing the key features which am looking for in this thread. I have noticed that in a trendy situation, it keeps adding orders and increasing lotsizes infinitely, without giving consideration to the accumulating drawdown. Also, it seems to have fixed distances between grids such that as long as...
Lotsizes can be limited via this EA by choosing a linear approach (don't choose d'alembert or martingale recovery and you'll be fine). Also, I urge you to think about the hedging in the way you propose.

What this EA does: open 0,01 sell + buy. One of both will be closed in profit (let's say the buy is closed in profit) and a new sell+buy will be opened.
Open positions: 0,02 lots sell (2 pos, 0,01 each) and 0,01 lots buy.

What you want (I presume): 0,01 sell + buy. One of both will be closed in profit (let's say the buy is closed in profit) and a new sell+buy will be opened with one that has a bigger position (what you call a balanced hedge).
Open positions: 0,02 lots sell (2 pos, 0,01 each) and 0,02 buy (the balanced hedge).

Problem with your proposed setup, is that lotsizes will spiral out of control. Imagine price goes down and the 2 sells of 0,01 are closed, a new buy & sell will have to be opened. You're still left with your 0,02 lot buys in drawdawn, that would need to be hedged, so a new buy of 0,01 (or 0,02) result in 0,03 or 0,04 total buys, that have to be offset with 0,03 or 0,04 shorts.

Trust me I've thouroughly tested all kinds of variations, even wrote a couple of EA's myself with various similar trade ideas and still the "super money grid" was superior: it has a solid strategy and also simplicity. Still a very risky approach that's bound to blow up one day. Still a lot of fun to experiment with. Good luck whatever you come up with, hope this helps. I'll pop in now and then to check your progress. Good luck.
  • #39
  • Aug 17, 2015 1:52pm Aug 17, 2015 1:52pm
Quoting ExForX
{quote} Lotsizes can be limited via this EA by choosing a linear approach (don't choose d'alembert or martingale recovery and you'll be fine). Also, I urge you to think about the hedging in the way you propose. What this EA does: open 0,01 sell + buy. One of both will be closed in profit (let's say the buy is closed in profit) and a new sell+buy will be opened. Open positions: 0,02 lots sell (2 pos, 0,01 each) and 0,01 lots buy. What you want (I presume): 0,01 sell + buy. One of both will be closed in profit (let's say the buy is closed in profit)...
Yeah, I think we are on the same page as far as the balancing is concerned. However, I don't want a situation where the hedging orders are equal to the 'bad trades', I just want them to be a certain percentage of the 'bad trades' so that once we finally get a retracement, we run into profit (overall pair profit) faster than we would without the hedging concept, and once we achieve a certain amount of profit, we close all the buys and sells for that pair and start all over again. So, for instance if we have 3 buys open, and the only sell hits its takeprofit, the next sell should hedge out the 2 smaller buys such that we are only left with one sell (the biggest one) to play with. If the price retraces, then we close all orders after profit is achieved, otherwise, we add another sell and continue hedging out the rest until we get a retracement.

So once we have a number of orders stacked together, we know from there onwards, all the orders will only be closed together after we achieve a certain profit.

Good thing about this is that it will give us the ability to survive longer trends as we keep check/ minimizing on the drawdown even if not fully eliminating it, because the fact remains that we will at last get a retracement and the only question is how long/ far we have to wait.

I think if we try this model on the majors we really have a good chance.

Hope this makes a bit of sense, and I know you have probably tried this concept before..
BitByBit..
  • #40
  • Aug 17, 2015 1:58pm Aug 17, 2015 1:58pm
Quoting colyske
{quote} Yeah, I think we are on the same page as far as the balancing is concerned. However, I don't want a situation where the hedging orders are equal to the 'bad trades', I just want them to be a certain percentage of the 'bad trades' so that once we finally get a retracement, we run into profit (overall pair profit) faster than we would without the hedging concept, and once we achieve a certain amount of profit, we close all the buys and sells for that pair and start all over again. So, for instance if we have 3 buys open, and the only sell...

Sorry to burst your dream. But I tried this before you tried it . in 2 years ago.
I did exactly the same as you do, and that was when a currency move like over 1000 pips in a direction. making things hard to control.

Grid can only really work if you are not greedy, and you got a lot of money.

Like $10000 trying make $1 per trade. but eventually grid will fail. unless you entry is really solid. with a win rate > 60% less the spread.
Learn to Trade is Important. Keep your bias & ego aside.
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