Hedge Grid Trading System

another way you could implement into an EA with entry/exits would be Dachelm’s idea of using Stoc and/or BB. I can’t think of a practical way of using BB in an EA - perhaps someone else has developed. :slight_smile:

hi xenios - I think we need to resurrect this thread - it’s interesting.

Cheers, Aaron

This sounds interesting to me,i will be demoing this coming week.will be using gbp/usd for now.

Boom!!!

That’s the sound of a “hedge grid system” blowing up because the market stopped ranging and went into a long trend. It’s all in the initials assumption as noted by the thread starter “The Hedge Grid System assumes that the market will move sideways, since this is true most of the time the system will work well.”

The only way a spot market trader can make money on net is to have a directional exposure. These grid systems are always on the edge of exploding because they keep building positions and if the market doesn’t come back as the system is built for, but instead goes into a sustained trend, the trader eventually gets margin called out of the whole thing.

i think i also trade your system. cheers… it makes money in ranges and as well as in trending market. just need a low spread (like 1.5-2 pips) liquid pair to trade. eur/usd and gbp/usd is best.

This strategy is futile, biyasc - have you noticed that nzpenny has not posted for going on 3 years, there could be any number of reasons for that but a likely one is like rhodytrader says - Boom!!

thnaks. i didn’t notice the post date. but i have something in my mind to make the strategy useful. lets see.

Did anyone put together an EA based on this strategy?

I am using the same system after i realized that all other systems do fail and very difficult to succeed eventually you will out all what you gained. I use 40 pips difference and start with only 2.5 usd/pip the problem is when things go wrong (very trending market) your account will be wipped off its my only month with green pips since i started. Its two way road you want profit you should lessen the amount of pull back required but this will increase the risk as when it moves to level 2 or 3 you will be aggressively against the market trend and this could turn bloody. One way i developed is to get satisfied with 40 or 80 pips maximum and not looking to capture the whole move and thats by maintaining a difference between the reversal trade and the trade with the trend.

I had mindblowing experiens with my hadged grid trading system too)))
Made 500% on my real acc fist week in low volatility EUR/USD with my breakout grid system and then failed slowly (haging)

It seems to be that they all fail sooner or later.

It seems to be nzpenny and topicstarter understood that too by this time. There are many similar threds worldwide and you just can’t imagine how good they were worked tru.

Are you still on.?? Whats your strategy to make it profitable.??

In rangy markets it can be profitable one but in trendy this strategy might not be good with small grid sizes.
In trendy markets, whatever we gain on +ive closed positions the same we will loose on -ve opened positions. Although our net equity will remain same but we might get a margin call since open positions will keep eating usable margin.
But by keeping grid size more (e.g. 80/100/120 pips), we can hope for a retracement and close the loosing positions at net average profit.
Another exit out can be to close all positions when usable margin drops certain level. Since our equity remains same, we are not looser(except the spread/comm) and we will start all over again…
let me give this strategy a serious thought and come up with something…in the mean time, you guys see any better exit strategy for loosing positions…??

i find it funny he posted this ranging system right before the trend/crash in 08 lol

Maybe this is the best system, it works, Just dont place reversal position until a cross over is verified.

Perhaps if the EA is coded to look for two envrionments using an indicator or set of rules

  1. Ranging
  2. Trending

Then once the EA is thinking i am trading in “ranging/trending” then we program the EA to act differently. It trades like normal in ranging as said above and when its trending we simply dont trade or use a different set of rules to enable the EA to be profitable ?

Just a thought

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: 301 Moved Permanently

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.

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.

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 :cool:

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.

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).