As I am working on the automated grid trading for 1 year, I want to open discussion about it!
Does anyone have any experience about this topic?
I give u a brief description of it:
Does anyone have any experience about this topic?
I give u a brief description of it:
- Use very small lotsize (nano trades = 0.01 lot size, 1000$ for standard, 100$ for mini accounts). This system runs tick based, not candle based. It opens maximum 1 trade per tick. All trades are opened at market, no stoploss, no limitorders.
- Start with 1 buy at market and 1 sell at market. They only differ with a currency spread.
- From that point, no other buys will be placed below first buy, no other sell above first sell.
- Recalculate profit for each tick, it there is negative profit, then place a trade at market (buy if above or sell if below) BUT only if there is still vacant pip position.
- You then have a group of buys on the upper part and a group of sells on the lower part. If there is finally positive profit, it stops with trading and leaves a group of trades. As long as the market moves away from them, the profit becomes larger.
But there are also risks with this trading method:
- When market changes direction, going back into grid, the profit becomes back negative: it continues to open trades on another vacant pip positions, making a grid larger until the profit finally becomes again positive.
- The number of trades can be very large, that the available margin could become zero.
- It can take hours, days or weeks time before the total profit target should be reached.
- Too many trades with too much margin can blow out accounts. So, it’s important to have big leverage (400:1 or 200:1).
- Also important: IT MUST HAVE FAST CONNECTION WITH THE FX SERVER! Because this system uses only trades at market.
- Some brokers allow only a LIMITED number of open trades.
In order to try to prevent these risks, I improved this system with starting conditions:
- Start immediately
- Start if ask has reached VALUE1
- Start if bid has reached VALUE2
- Start if ONE of BOTH condition is true
The VALUES are to be defined where it’s best to start from, after studying charts.
That’s all where I am currently developing a stand-alone robot with this system. Also I have backtested this system using MT4 terminal. I use both MT3 and MT4 demo accounts.
Any questions and suggestions are welcome!
Regards,
Jeff
For hiring me to program EA's, please PM me.