Hedge Grid Trading System

I have to say I agree with NZPenny that keeping your exact solution to yourself makes sense. Why risk something that is quietly making you money. The sharing of concepts and allowing others to shape these to their own personality is the way to go

Would anyone know of a broker who has the ability to do this type of trading, and who has fixed spreads for the majority of the time, and who is regulated?

I am currently using FXCM as a demo and find that there spreads vary. This may be a problem as when you enter a simultaneous buy/sell order one of the orders may not get executed leaving you in an un hedged position.

It has not happened yet but there is a possibility that it may occur.

Does anyone have any suggestions? Or does anyone know of a broker with the above characteristics?

Someone told me to use a broker that has fixed spreads and has MetaTrader 4 for this type of trading. The only reason that I can see to use this type of broker is because they have the ability to simultaneously buy/sell the same currency at the same time. I am not sure that they use fixed spreads though.

Would anyone have any ideas?

I use interbankfx and have traded this system live for 8 months and have never had a problem with them

Thanks for ur reply nzpenny

Does InterbankFX have fixed or variable spreads?

Variable but I have never had a problem

Hey Im trying a system almost cloned LOL. I profit In the rage and in the consolidation. I Started a week ago and Im still under backtest, the only diference is the way I get in. I use GBP/JPY only and I use Bollinger Bands (20) and Stochastics 14,3,3 to look for retracements signals and then as soon as a signal take place I buy and sell at the same time and wait for a wide amount of pips like 200 and then I start looking for an entry wich suggest a reverse. Then I close the position with profit, let the loss run, and open two new position (buy and sell) waiting for the market to retrace to the breakeven point of the runing losses. So I exit with profit. If the price keep going in one direction instead of reverse I do the same when I get the same range that I used before. (the gap change due to the entry signals). I hope this help a little bit with the srategy and keep doing researches. I will post my backtest results as soon as I finish.

Best regards
Dachel Miqueli

can you show me on a chart?

maybe this videos can help you understand better in the mean time Im working on the charts to send them to you

YouTube - Module1: Introduction to No Stop,Hedged, Forex Grid Trading

I don’t understand this part … I’ll watch the video you posted & see if that helps. Thanks.

First let me apologize for my english LOL. I’ll try to explain better.

Well I was saying that I take the the size leg of the grid by apreciation, calculation etc. To make money I need a retracement right? Well if that retracement does not come back yet and instead…the price keep moving in the the other direction…I wait to have the same amount of pips of my first trade to then…close the position with profit and BUY and SELL again to wait for the retracement.

I’ve been doing so good with this method. As you can see is not mechanical 100%. With more experience in the market you will be able to know better when to start and where to take profit etc. You must think out of the box.

anyway here is something I found and I guess it could be of help

The Opportunities of Trading the Forex Hedged Grid System
I have seen the hedged grid system been used successfully (and highly unsuccessfully) over the last few years. Unfortunately the failures tend to discourage traders from taking advantage of this great system. I have found that the failures are mainly due to ignorance, impatience and greed (common reasons for trading failure).

In a nutshell the grid system uses the following methodology. You start by buying and selling a currency. When the price moves a predetermined distance (grid leg) you cash in the positive leg, leave the negative leg and buy and sell again. Sooner or later the system goes positive and you would then cash in when it is positive.

This is a brief summary of the content of our free hedged grid trading course available on expert-4x.com. Please refer to this course for more details of how money is made. The attraction is that the system is reasonably mechanical, can be programmed and does not take much supervision as exclusively entry orders are used.

Money is made when the price retraces 100%, 50%, 33% at various levels. This starts looking like a strategy that supports the Fibonacci concept. The grid system is also based on the nature of the market to trade sideways 80% of the time and to trend 20% of the time.

The dangers are that what if the price does not retrace and continues to trend. The Grid system can not make money in a trending market � full stop. One has to realize that. You therefore need Strategies to minimize damage during these periods:-

Firstly I have found that the biggest mistake made by traders is that they select a very small grid leg sizes e.g. 20 to 30 pips. This is a recipe for disaster. The trick is to use big leg sizes between 150 and 300 pips. What this does is that it sometimes turns a trending phase into movement in a sideways market. I would typically use 300 pips for the GBPJPY and 150 pips for the EURUSD for instance.

Secondly there is no rule that says that the legs have to be the same size. So I change my leg sizes in trending markets to be even bigger. If I started with 150 for the 1st leg I would go to 200 for the 2nd leg and 250 for the 3rd leg etc. This makes sure that I am carrying less loss making transactions in a trend.

Thirdly � sometimes it is wise to increase the number of lots with the trend compared to the numbers against the trend in a good trend. However be aware of having the same number of sell and buy transactions. All you will have done was lock in your current status in a 100% hedge.

Fourthly � This is the biggest change and most important one that I personally have made in my grid trading strategy. Always cash in all your transactions when your system is positive and when the price reaches the end of one of your grid legs. By cashing in you are reducing the risk of carrying negative lots in a trending market. This also gives you an opportunity to re-assess the market conditions.

Fifthly:- Cash in a start again is always an option. One of my strategies is to cash in all my open positions when the 3rd leg of my grid is reached and start again. Experience has taught me that this is a short term pain that goes away very quickly and is soon forgotten.

People that have traded the grid system will immediately see how the above approaches will reduce the risks of exponential losses building up in a strongly trending market.

Hmm i have seen this article numerous times in the net… are you from expert4x.com?

Though it makes a lot of sense…

I Know. Im not from expert4x.com but that article is definitively from them. Still gives nice hints. Im just another hard worker trying to succed in the Forex.

Have a nice day

Thanks a lot dachelm for your comments… its true, the way you trade is similar but not equal, I like the grid because it needs less maintenance, less time infront of the PC. I would love to hear about your results though.

Well, resuming what has been happening with my life in the last few weeks, I’ve been very busy thats why I dont have so much time to update this post. Another reason is that this method is kinda slow, I wish I could make more money faster… but I’m a little reserved. I also was developing another method (doesnt have anything to do with the grid), but still is in pampers stage but very promising.

So, here is some updates from my Live Grid GBP/USD:

Initial Balance: 300
Balance: 604.43
Equity: 504.6
Margin used: 40
Floating P/L: -100
Account growth: 68%

Edit:
I forgot to mention that I increased the lot size from 0.1 to 0.3 a few days ago.

Im glad you respond to this threat. I’ve been busy too so don’t worry if you take your time. Well so far I’ve been using this method for 2 weeks now and had nice results. The past week I catch aroubd 400 pips only with GBP/JPY. I wish I could post my report here but my demo account expired las week LOL, That’s why I opened another one sunday night of this week. At the end of the week I will Upload the report. So far catch a clean 146 pips (Actually was more but im just posting here my actual earning and not a net gain) Im still inside an operation with the eur/usd so Im expecting to be 200+ when Im done. I know this could be a little slow but is soooooo effective. Maybe I start managing others peoples money in order to speed up my earnings.

Think about it…if you get 200 monthly and increase une lot for every 10000 you add to your account you will be very rich in less than 6 -7 years (not bad at all) Im 23 so in my 30 I can retire rich. MMMmmmm.

Sounds good huh? Do the math

Best Of Luck

http://forums.babypips.com/free-forex-trading-systems/14273-another-great-breakout-gbp-jpy-system-dachels-simple-system.html

Hello Traders,
I just found out about grid trading this weekend. I have watched some videos online, took a look at this forum, and played around a bit with this…I think this is finally the trading systems I have been looking for…no indicators, no fibs, just…math. LOL

I would like to throw out a couple ideas on this system that I have been looking at. I know some of this has been said, but I would like to share where my mind is at with the information I have look at thus far.

–Use larger legs, min of 150, I like 200…but up to 300 is fine for larger trending markets.
–100% retracement = Win, 50% retracement = Win, 33% retracement = Break Even…if your trade trends and triggers 4 legs in the same direction = Loss

If anybody has a suggestion about what to do if 4 legs are hit in the same direction…and still look to either break even, or turn a profit, please share :slight_smile:

Happy Hunting…and honestly, I am just about to spend the money on the Expert4x site and get their how to :)…but it would be nicer if I could run this system to make the money…that way I take the training for free LOL.

Well Well Well. The suggestion about what to do if 4 legs are hit in the same direction…Since I don’t use a fixed leg size I can’t tell you exactly what to do but as I choose the leg size by myself because I want to catch the retracement…then I use stochastics, fibonacci, S&R to have a clue for get the profit and then buy and sell again and let the loss run. If the market keep moving against you…just wait for another retracement signal and again get the profit and buy and sell. Make sure you leg size is more than 100 for normal volatile pairs such as USD/CHF USD/JPY GBP/USD EUR/USD. the amount of pips for each pair change due to volatility and signals but with this method you will be more profitable than choosing a fixed size grid.

I close the last week with 204 pips in profit (clean of spreads and rollover, ovenight fees, etc) so It was more before the deduction

I trade the gbp with this system and use 100pip take profits The secret is to keep the value of each leg small with is made up by the large number of banked profits

Hi nzpenny, I started by looking at 100 point moves, but I found a few places where the 4th leg was hit before a retracement, and I didnt see how to turn that around.

When you hit the 4th leg do you wait it out and hope for a 200 point retracement ? Or do you close the 1st leg as a loss leaving 3 legs open and hope for the single leg retracement ? I was also playing with the Idea of increasing the lot size (in the direction of the trend) if the 3rd leg were hit.

I would appericate any guidance for this situation.

Thank you.

You know I don’t recommend a fixed leg size but since you do…I can recommend you to exit in Breakeven after the 4th leg is hit. But never close in loss.

Good luck