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 didnât 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 canât 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 againâŚ
let me give this strategy a serious thought and come up with somethingâŚin the mean time, you guys see any better exit strategy for loosing positionsâŚ??
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
- Ranging
- Trending
Then once the EA is thinking i am trading in âranging/trendingâ 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, thatâs ok, I wonât 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 âhedgedâ 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 
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.
UmmmâŚDonât 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 itâs 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).
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
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 âhedge-gridâ too.
I completely agree with you Alex. In particular for the state âCurrency selection is very important.â.
I trade only in EUR/USD because for the Smalfi system it is the best suitable!
And I agree too with ârequires patience so I regard it as an investment systemâ
In Italy we say: Il trader che guadagna è il trader che dura! 
cheers
hello friend,
have you made an EA for this grid + hedging system? Are you interested into sell or share?
How is working it?
Letâs 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. . . :21:
Letâs put it in numbers. Youâre 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 youâve 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 youâd 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.
Iâm not sure where the âSell entryâ bit comes in since you were already short to begin with.
Every grid system Iâve 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 âhedgeâ positions.