Hedge Grid Trading System - Page 10
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  1. #91
    Hi Rhody !

    What is meant by Directional Exposure ?

    You said: "The only way a spot market trader can make money on net is to have a directional exposure.

    Read more: Hedge Grid Trading System

    Can you suggest (not advise, that's ok, I won't blame you for losses :P) any strategy on directional exposure ?

    Thanks for your kind help.

  2. #92
    Join Date
    Dec 2006
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    Wichita Falls, TX
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    Quote Originally Posted by Shawn Michaels View Post
    What is meant by Directional Exposure ?
    It means being net long or net short. When someone is "hedged" holding opposing positions they are net flat, and thus can neither gain nor lose.

  3. #93
    Thanks for your kind reply.

    OK, to be net long, there must be then 2 buy positions (positive) against 1 short (negative).

    So in Grid Trading, there must be 3 trades, either 2 positive longs or 2 positive shorts, to be profitable.

    Thanks for shedding light on this.

    You are the best

  4. #94
    Join Date
    Nov 2011
    Location
    United Arab Emirates
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    13
    Quote Originally Posted by Shawn Michaels View Post
    Thanks for your kind reply.

    OK, to be net long, there must be then 2 buy positions (positive) against 1 short (negative).

    So in Grid Trading, there must be 3 trades, either 2 positive longs or 2 positive shorts, to be profitable.

    Thanks for shedding light on this.

    You are the best
    I jus:t cannot let go with this system, here are my final thoughts and i will apply it in demo for at least one year

    1- You need a considerable balance >100K
    2- You need to use an adjacent step by step trend following system. starting from level 2 onward.
    4- You need not to close the winning untile a reversal is secured, keep winnings open and once the reversal is secured, close all. yes you would wait a lot more but you will win a lot more as well.and will reduce margin requirements.
    5- be reasonable. target daily 300-400, dont forget that making 5000-8000 on your 100k monthly is a great trading.

  5. #95
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    Dec 2006
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    Wichita Falls, TX
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    Quote Originally Posted by Shawn Michaels View Post
    OK, to be net long, there must be then 2 buy positions (positive) against 1 short (negative).
    Ummm....Don't you think it would be simpler to just be long 1 position and short none? There is no reason at all to do the other long and the short as it's not going to give you any directional exposure and will cost you the spread.

    So in Grid Trading, there must be 3 trades, either 2 positive longs or 2 positive shorts, to be profitable.
    In ALL spot forex trading there must either be a long exposure to a short exposure to have any chance to be profitable (or take a loss).

  6. #96
    Join Date
    Jan 2013
    Location
    South Africa
    Posts
    5
    Hi

    Just some input on my own personal experience trading the grid system in the last 6 years. I use the following rules:

    Grid gaps or sizes must be 250 to 500 pips
    My stop is when the price has travelled to the 4th grid level - normally a loss of 6 times the grid size.
    Currency selection is very important.

    These basic rules have made this simple system profitable for me. With these big grid sizes the system is very boring and requires patience so I regard it as an investment system and trade other systems as well.

    I hope this helps

  7. #97
    Join Date
    Feb 2013
    Location
    Italy / USA
    Posts
    19
    My personal experience:
    I trade with Smalfi trading strategy. It is a mathematical non-discretional strategy.
    It has only a few things in common with the strategy presented in this post, but it is a sort of "hedge-grid" too.

    Quote Originally Posted by AlexduPlooy View Post
    Hi
    Just some input on my own personal experience trading the grid system in the last 6 years. I use the following rules:
    [...]
    Currency selection is very important.

    These basic rules have made this simple system profitable for me. With these big grid sizes the system is very boring and requires patience so I regard it as an investment system and trade other systems as well.
    I hope this helps
    I completely agree with you Alex. In particular for the state "Currency selection is very important.".
    I trade only in EUR/USD because for the Smalfi system it is the best suitable!

    And I agree too with "requires patience so I regard it as an investment system"

    In Italy we say: Il trader che guadagna è il trader che dura!

    cheers

  8. #98
    Join Date
    May 2013
    Posts
    1
    hello friend,
    have you made an EA for this grid + hedging system? Are you interested into sell or share?

    How is working it?

  9. #99
    Join Date
    Feb 2013
    Location
    Scotland
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    5,345

    Default Hedging

    Quote Originally Posted by rhodytrader View Post
    Ummm....Don't you think it would be simpler to just be long 1 position and short none? There is no reason at all to do the other long and the short as it's not going to give you any directional exposure and will cost you the spread.



    In ALL spot forex trading there must either be a long exposure to a short exposure to have any chance to be profitable (or take a loss).
    Let's say that you have two open positions: one long and one short; the R/R is 1:2; the positions are open either side of the market (Buy entry order is above price, and Sell entry order is below it). If the price moved up first, hit your limit, and then moved down enough to trigger your Sell entry but without hitting the limit and moved back up to hit your stop, you would still be profitable, because your loss is half your profit.

    If you keep getting triggered entries and never hit your net limit before price moves the opposite way, then it is not a case of binning the grid system but rather adjusting it to the behaviour of that currency at the close of each day (e.g. widening or shortening net limit, checking for spread fluctuations, etc.)

    I am new to the grid system so it is not for me to speak with authority, but for ranging markets it can work, so let us see if anyone has positive thoughts about it.

    Of course there is no holy grail, so it is down to the intelligence of the trader to see the changing environment and adapt the strategy. The only issue here is differentiating between being patient with your losing streaks and being blind to a clearly failing system: that, in the end, is only up to the account holder to determine. . .
    Last edited by PipMeHappy; 08-24-2013 at 09:56 AM.

  10. #100
    Join Date
    Dec 2006
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    Wichita Falls, TX
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    Quote Originally Posted by PipMeHappy View Post
    Let's say that you have two open positions: one long and one short; the R/R is 1:2; the positions are open either side of the market (Buy entry order is above price, and Sell entry order is below it). If the price moved up first, hit your limit, and then moved down enough to trigger your Sell entry but without hitting the limit and moved back up to hit your stop, you would still be profitable, because your loss is half your profit.
    Let's put it in numbers. You're both long and short EUR/USD from 1.30. You have a 100 pip take profit limit for each and a 50 pip stop loss limit for each. This is in line with what you've described, right?

    If the market moves up to your long TP at 1.3100 it will have triggered your short stop at 1.3050 along the way, so you'd have a 50 pip loss on the short and a 100 pip gain on the long - excluding the spread cost incurred by initially putting the trades on in the first place. This is the same as if you just waited and put a long position on at the 1.3050 level, without the initial spread cost.

    I'm not sure where the "Sell entry" bit comes in since you were already short to begin with.

    Every grid system I've seen is a mean reversion strategy. They will do fine in ranging markets but have serious - potentially financially fatal - problems when the market is trending. They can also be more efficiently executed using simple counter trend single trade entries (e.g. long when the market goes up 100 pips) than with these long/short straddle type "hedge" positions.

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