The grid trading is a trading system that uses multiple orders with which the trader averages the open price. Normally the trading grid adds new positions to already opened positions when they start to lose. With averaging the price with the new positions, the trader could exploit that there is certain normal volatility and betting the market in most of the time will be on range or when there is a trend, the market price will do a correction.
Grid Trading Expert Advisors
There are a lot of different types of trading grids and we choose three types that we find to be the most useful. These Expert Advisors can be used free with our partner brokers which you can see close to the Expert Advisors.
*Subscribers can use the EA's in every broker via their key.
How much profit would you expect from Grid Trading?
It is natural for market trends to push the price in one direction or another. If conditions are right, one or more forex pairs will trend and profits will pile up! One forex strategy that is working exceptionally well right now is grid trading. With this strategy, traders are able to take a theoretically lossless trade under certain conditions, and practically lossless if operated correctly.
A grid trading strategy is unique because it allows you to take a number of trades at the same time, in an attempt to make larger profits.
There are many types of trading systems, but this model has worked best for us. The drawbacks are that trades are not suited for big trends and may incur losses in downtrends. Our 3 EA's , on the other hand, copes well in both uptrend and downtrends.
The main advantages of trade grid system
- You don’t risk a whole time a big part of your capital. As you increase your position gradually, you start just with a small position and very rarely open a really big position.
- Trading with a trade grid system you could gain profit from range market, but also from trend market when the market price does a correction movement.
- Trading grid is a relatively simple system without a lot of borders or complicated cases for which the trader has to think.
- The simplicity of the grid system makes it easy to be automated.
- The probability of losses could be reduced if you use several trading grids simultaneously at different instruments.
- The trading grid system is very suitable for the Forex market as the range periods on market price are more often than on the equity/stock market.
Disadvantages of grid trading systems
- The losses when trade with the grid system are lower number than if you trade with the trend system, but the single losses are with a much bigger size.
- The size of the grid should not be too small and not too large. When opposing signals are given using this strategy, possible losses are closed in order to open a new trade. This results in relatively large draw-downs. Every grid has a start and an end.
Some people may consider the grid trade to be not so profitable and risky. And they may be right. But we can say that to every system that is not used in the proper way, to the proper instrument, and with the proper money management. So it is not so important what the trading system is, it is important how you approach it. So test, analyze, choose the right parameters, and don't hesitate to use manual action when it is required.