"grid trading" How does it work? Does it really work?

[patrick_fx]

Hi,

I’ve recently heard about grid trading technique. I tried to google but didn’t find much information. Can someone guide me to the websites where I can I have more info? I want to be able to answer the following questions:

(1) which pair(s) should I trade
(2) how wide should the gaps between limit orders be
(3) what size of contract should I use
(4) what to do when I’m ready to move up to the bigger contract size
(5) how to get out of the trade completely with minimum lost

Maybe I would have more questions if I really understand how it works. Please share your opinions/experience.


Thanks,
Patrick

[MickMason]

Try a search for 'grid trading forex', it brings up loads of hits.

There are so many variations, none of which seem to consistently make money, I think there's a few MT4 EA's out there as well. The major problem with grid trading seems to be there's always a few positions left floating and a long way from market.


Mick

[Atomised]

Another small problem is how can u see the price with all them damn lines all over the place !!! Mind u i shouldn't talk, i started reading a thread last week on grid trading and gave up after page 2 !!!

[barrys]

take a look at http://automaticforex.invisionzone.com/ lots of grid EA's for meta 3 and 4

[11bruce]

Grids work well in theory but the money management causes them to blow out. You need to evaluate them over a along period of time at least 3-6 months before you will know the maximum exposure your account can handle before a margin call WILL occur. Many people have used grids from these forum sites and have lost buckets of cash to ibfx,fxdd and other mt3,mt4 brokers. The main reason I see for there downfall is the notion that profits should be taken between 5 - 20 pips each time. This causes the system to pay to much % of each trade in spread. Also the fact that lossing trades are kept open until market comes back or your account is margin called. Proceed with caution.

[MickMason]

Originally Posted by 11bruce

Also the fact that lossing trades are kept open until market comes back or your account is margin called. Proceed with caution.

That's the impression I got too, they look fine on the face of it but in practice there's always a few stray trades with big losses. I think the idea is to trade really small, like 10c per pip or something, but then it hardly seems worth the effort somehow!


Mick

[el cid]

There are far better methods of trading than grid trading...that is why there are no books written on grid trading.Just look for a t/a based system like the bunny cross and risk very little of your money

[MickMason]

Originally Posted by el cid

Just look for a t/a based system like the bunny cross

Not heard that name for a while, is it still going?