Who has tried grid trading EAs?
You know what happens, it starts out great until your margin gets used up with too many open trades when the pair trends.
Vote in the poll!
Now, how many of you have tried to think out of the box on the grid trading idea?
Here’s one idea that I have never heard anybody try:
You know that a grid has TP the same distance as the trade entries, so for a 20 pip grid, you have 20 pip TP with entries both ways opening every 20 pips.
Now, what if you had entries every 10 pips, but had the TP at 20 (or 30) pips AND a 10 pip SL?
If the price trends 100 pips, using 20 pip TP, but 10 pip entries then at 100 pips, we have 15 total open entries, 8 hit 20 pip TP for 160 pips gross profit, 9 sells hit 10 pip SL for -90 pip gross loss, floating P/L would be net +10 pips, so we netted 70 pips, right? And the only open positions are the last buy\sell at the 100 pip level, and the floating buy from the 90 pip level at +10 pips. Once the price goes down 100 pips in this perfect example, then another gross 160 pips comes from 8 wins, -90 pips with 9 losses, and netting another 70 pips, with 10 pips floating profit from the 90 pip level, (which was the first 10 pip level when the price had first gone up). Are you still tracking with me here? Now, I said all that to ask this…what I want to know and find out is what happens when you stick this out on the real market, when the price ranges here and there and everywhere, will so many shorter SLs be taken out, to outweight the benefits of a larger TP?
I can imagine ranging situations where the 10 pip stop is constantly getting hit, with a rare 20 pip win here and there for overall loss. Now if you’re catching a trend, 10 pip pullbacks result in loss? That’s a tiny pull back, happens way to often to keep you in the trending move. I dunno, hope that helps. I got lost somewhere along the way in the first post lol.
10 pip stop, 20 pip TP. Probability says your stop will get hit twice as much and more due to spread, resulting in loss. That’s all I got lol.
let’s say price goes 100 pips up. And you have trades opening both ways every 10 pips with a 10 pip SL
with 25 pip TP you net 98 pips, with some additional floating profit.
with 30 pip TP you net 110 pips, with some additional floating profit.
with 60 pip TP you net 140 pips, with some additional floating profit.
This isn’t practical on a retracing pair like the EUR\USD, but may be practical on GBP\NZD, which doesn’t really retrace in only small amounts very much.
Yep, it’s cherry picking a bit, but just to illustrate the point of throwing conventionalism out the door, and seeing what happens. I have no idea if this would continue to work well, but this pair does respect 100 pip round numbers…(and 50 pip numbers, if you notice one the chart, too).
