Para 6. Say you have a buy position and it starts to go bad and the price pulls back to the entry point of that buy, you estimate the price to pullback further… You open 2 sell positions at the original entry point and of equal lot size to the buy (Say buy is 0.05) you now have two sells at 0.05.
So as price moves downward against your original buy position, you have one position which is hedging the trade (locking the loss) and the second position attempting to make a profit.
So if both sell trades move say 10 - 20 pips down, when you -close all- at a set point (lets say 12 pips). You have negated the losing buy position (minus commision/spread) with one of the sell positions and have made a 12 pip profit (minus commision/spread) with the second.
It’s a technique that is used so you don’t require a tight stop loss (use a long catastrophe stop) and to convert a losing position into a profit.
Hence in the US hedging like this is banned because if the trade goes against you… well… they want your money…
The OP’s details are more comprehensive than my explanation, allowing you to continue to stay in the market. I have shown a simplified version of part of the strategy.
Can it work?.. a skilful trader can make it work… I have used it before and it does work… highly stressful and can turn a small loss into a bigger loss quite easily… I notice this is a very old thread, so maybe search other sites like ForexFactory or Youtube for maybe a demonstrated version… The FX elite on BP will vomit all over this… just watch.
As the OP says, give it a go on a demo… try everything on a demo… don’t let muppets on BP hold you back…
[quote=“Trendswithbenefits, post:5, topic:51003”]Can it work?.. a skilful trader can make it work… I have used it before and it does work…
The FX elite on BP will vomit all over this… just watch.[/quote]
Of course they work, providing, as you correctly note, they’re being developed & managed by sufficiently skilled & experienced operators. One such practitioner (an ex-retail & institutional algo developer) rocked up on here a couple years ago answering a few questions & explaining how they could enhance a risk portfolio but was shouted down by the very folk you mention above.
If they’d just peeled back the cover & conducted even the minimal basic due diligence on him they’d have discovered precisely how very different a successful grid/hedge operation differs from the sub-par rubbish bandied around by amateur chancers looking to fleece naïve grail chasers.
He was even offering the chance for those with limited cash to get aboard via a copy arrengement via a choice of his 2 most successful engines before transferring the profits across to the higher minimum threshold managed fund/s.
Sometimes folks just can’t spot a gift horse even when it kicks them hard between the legs.
Trouble is, they’re so conditioned in these joints to getting legged by pseudo-experts & jaw flapping fantasy guru’s they automatically drop the genuine articles into the spoofers, trolls or spammers camp.
How do you cash your money if you don’t have TP ?
is this gonna be an EA ?
also what is your market entry ? do you check for some event or you begin at some hour of the day ?
you close the trade manually when it is in profit? there are several EA’s that do something quite similar, but key is if you dont understand the process and logic of trading this way using an EA may not help at all and may end up costing you $ in the long run, the key is in the understanding, and the testing in demo.
I am a grid trader, the hedging is great and does work, it is effectively a soft stop, the more trades you put on the better, but the key is in the managing of the exits, if you use no SL, and set TPT’s of 50 pips each way on shorts and longs and wait, I bet they all close in profit. key is your entry point, the center, this should be very near or at equilibrium in a longer term than you are currently trading. if 50 doesnt work, try 25, or 15 or 5 or 2.5 or 1.7 or 1.2 (EVIL GRIN)
I find it far better to stick to buy side or sell side only even if running both sides of the buy or both sides of the sell. and going +swap only, manage the positons wider and smaller until you get better, and nothing wrong with shooting for 100% winners, failing and getting 98% will be fine.
Hey rrram2, do you mean equilibrium between bid and ask, or something else? Seems like an interesting strategy but would require constant monitoring. What’s the highest time frame you would try this on?
You also mention you’re a grid trader. Are there other grid strategies out there you’ve used with any success. I’m a newb, but willing to learn. First time I’m hearing of this. Thanks!
Hey friends,
I know this is quite an old thread back in 2013 and the OP wasn’t active anymore in BP…
Usually I’m very interested in grid or mathematical strategies… but what makes me more interested is the Risk Reward Ratio as per the Thread OP say:
On a Bad day = -20 pips
On a Good Day = 100 - 150 (as go high, depends on volatility)
But i can’t get how this possible… (maybe not understand the strategy correctly) ?
1 buy @ 1.4040
1 sell @ 1.4020 makes hedge = -20
Can’t figured out How this scenario always applied to other pending orders… ???
This makes a way for -40pips if price goes wrong (maybe I’m not understood the strategy really well.)
So it makes the above para statement controversial…!!
Thanks for your response brother. Like the diagram you’ve quoted.
Isn’t a range grid rather than OP’s method trend grid.(strategy that works best for trending market not for ranging)
Maybe if combine both will lessen the draw-down ??
Grid trading that works both condition except the High Impact volatility times.
key is your entry point, the center, this should be very near or at equilibrium in a longer term than you are currently trading. if 50 doesnt work, try 25, or 15 or 5 or 2.5 or 1.7 or 1.2 (EVIL GRIN)
for the simplicity… 
